Shut up and write the check!

So, I've told you before that liberals are brain damaged. Here's another example.

Liberals claim to be tolerant, right? I think their favorite Bible verse is, “Judge not lest ye be judged.” It's probably the only verse some of them know. If a person wants to have sex without being married, with multiple partners, or even with same sex partners, it's none of my business. What happens between consenting adults is a private matter and my opinion of the behavior is not welcome. I even hear similar things from Christians: how, if a young, single woman gets pregnant, we need to support her as a church and not judge her. Does any of this sound familiar?

Here's where the brain damaged part comes in. Liberals are champions of the “right to privacy” but what happens when these people contract a sexually transmitted disease or a young girl gets pregnant? Often they seek out public assistance!

How many millions are we spending on AIDS research? How about welfare, food stamps, and rent subsidies to single mothers? And don't forget the tax payer money going to Planned Parenthood to pay for abortions! When these people were engaging in their reckless behavior, it was a private matter; now that they have to face the consequences of their bad decisions, it's suddenly not so private anymore. Now they expect to be supported by the public.

It's not just the people who engage in this type of behavior that bother me; it's also the enablers, those who defend them. The same people who are telling me not to judge those who do these things are also telling me I have to pay more in taxes to help them.

It's rather pathetic. Liberal elitists view themselves as tolerant (by not judging others) and compassionate (by wanting to support them). What they don't understand is that this kind of tolerance and compassion only exacerbates the problem. People need to be told that bad decisions have consequences. They need to hear that having a child before being married virtually guarantees a lifetime of poverty. They need to be told that abstinence is 100% effective at preventing pregnancy and STDs. They need to understand that “safe and legal” abortions can have severe and lasting physical and psychological side effects. We also need to stop subsidizing poor choices with government programs that only perpetuate poverty.

If the public is paying the bills, then shouldn't the public have a say in the matter? What is wrong with telling young men and women it's a bad idea to have sex or to live together without being married? Yet if I say this, then I'm the one accused of being “intolerant” or that I'm trying to force my religion on everyone else.

Liberals are 100% backward in their thinking. The compassionate thing to do is to tell people it's wrong to engage in certain behaviors. If we truly care for these people, we need to set them on the right track. The liberal solution is that I should shut up and write a check!

The Minimum Wage

A recent visitor to my blog, who posted under the name, Carvin, shared some sharp opinions about his view of corporations, the wealthy, and the minimum wage. Here's a sample of what Carvin said:

Many of our biggest corporations pay little to no taxes due to their corporate welfare. This money does not go to anyone who works, but the richest people in the company that merely own it, often through nepotism. Meanwhile, they pay their employees so little that they will either starve and/or fall ill because of it. Since the rich control almost all areas of occupation, they can agree that no one should be payed enough, and do. Our minimum wage is criminally low, a point of utter shame. Our healthcare system is set up so only the rich can be healthy.

Carvin is certainly passionate, but his points lack any substance. He paints a picture where America resembles the caste system of medieval Europe. The world he describes is completely foreign to the real world that I live and work in every day. I'm sure most would agree. Where you work, do you see emaciated people chained to their desks? Are there wooden carts being pulled through your neighborhood with a crier ringing a bell saying, “bring out your dead”? How can Carvin say that workers “starve” or “fall ill” and “only the rich can be healthy”? I'm certainly not rich and neither am I ill or starving. This plague on workers he describes exists only in his imagination.

There are a lot of points I could address, but in this post, I'm going to specifically address the minimum wage issue he raised. Considering, too, that an increase in the minimum wage was just defeated in Congress, the topic is rather timely.

I've always wondered how a minimum wage ever became acceptable in the first place. OK, I do see how. It's an example of that old adage that when you rob Peter to pay Paul, you can count on the support of Paul. Some people don't mind when others are being robbed of their property if they know they will be the beneficiaries of it. I see no justice in it at all. On what grounds does the government have the right to set the wage an employer can pay his employee? It seems to me that it should be up to the employer and worker (as in Matthew 20). The employer decides how much a particular task is worth and offers someone that much or less to do it. The worker then decides if the job is worth the pay and might decide to accept. The sounds like the epitome of fairness. What sounds unfair is to demand an employer paid $10 per hour for a job that is only worth $7.

Now, some people might say, “But $7 per hour is not enough to live on.” Well, maybe it's not – but that still doesn't justify paying someone $10 to produce $7 worth of work! This is supposed to be a business, not a charity. Liberals seem to think that the purpose of a business is to provide jobs, promote diversity, and create social equality. I hate to break the news to them but the purpose of a business is to produce goods/services for a profit. Creating jobs is a fortunate consequence of the business's pursuit of profit. Companies that cannot produce a profit eventually go out of business and then there will be not only be no goods and services produced, there will be no jobs either.

Most jobs that pay minimum wage do not require much skill or education. These are often high turn-over jobs (such as in the fast food industry) or temporary, seasonal jobs (like department stores). Many are filled by teenagers or adults who only work part-time. It's also an introductory wage. People who stay with the same employer for any length of time begin receiving raises and/or promotions. According to the US Census Bureau, the average income for an individual in the US is $28,051 – well above the minimum wage. So an increase in the minimum wage won't do anything to help the overwhelming majority of people who work. It will only mean employers will have to pay more for teenagers to flip hamburgers during the summer.

Beyond that, though, increasing the minimum wage will actually hurt many of the people it's intended to help. Let me give you an example that everyone can understand: If you eat at a fast food place that only charges $1 for a burger, but then they suddenly raise their price to $2 for a burger, do you think you'll buy more burgers or fewer burgers in the future? It's obvious that you would probably buy fewer burgers. Most people would. Now, suppose it currently costs an employer $15K to higher a worker but suddenly it costs $20K. Do you think that employer will higher more people or fewer people? Labor is an expense to a business just like food is an expense to an individual. Labor is an expense just like rent or utilities is an expense. People try to save on expenses. You do it and businesses do it. And if labor costs more, businesses will try to reduce their labor costs somehow. It might mean they higher fewer people. The end result is that there will be less jobs available for low skilled workers.  So instead of making more money, many low skilled workers will simply be out of work.

A higher minimum wager also means employers might replace labor with technology.  Think about that for a minute. If a labor saving machine is very expensive, I might continue using cheap labor indefinitely. For example, I might pay a crew $7.25/hr to dig with shovels but if I had to pay them $15/hr, then I might choose to replace the crew with an excavator. Then I only have to pay one man $15/hr to work the machine and the rest are out of work. Once again, a higher costs of labor has cost jobs.

We should also consider the consequence to everyone else if the minimum wage is increased. Suppose a business has 50 employees and its annual labor cost is $1 million. Some of the workers make minimum wage and some make more. If the business suddenly had to pay higher wages to the lowest wage earners, it doesn't magically have more than $1 million to pay. Some workers could be laid off but what else will happen is that the workers who are making more than the minimum wage already will likely get smaller raises or no raises on their incomes. So a raise on the minimum wage actually suppresses the wages of everyone.

Finally, when forced to pay a higher amount for labor, many businesses will be forced to raise the prices on the goods and services they produce. This affects everyone since the value of a dollar is eroded by higher prices on everything. Inflation usually hits poor people the hardest. Do you think McDonald's will still sell burgers for $1 if they have to pay its part-time, teenage workers $15 per hour to cook them? Who eats at McDonald's? Only rich people?

So let's sum up. Increasing the minimum wage will:

• give employers an incentive to cut their labor costs
• cause employers to higher fewer people
• cause some businesses to replace workers with machines
• suppress the wages of everyone
• raise the prices on everything

Did I miss anything? Some people would cut off their nose to spite their face. Raising the minimum wage doesn't mean more prosperity for the poor. It would mean fewer jobs and higher prices. More poor people will be out of work and it will be harder for them to buy food, clothes, and housing. Oh, and by the way, the rich will still be rich.

My New Taxes Under Obama

I'm not one of the 1% that has been maligned by the left. I do pay taxes so I guess I'm not in the bottom 47% either. I'm what you would call “middle class” in every sense of the word. Why then are my taxes going up? I'll tell you why – It's the Affordable Care Act AKA Obamacare. Just recently, my employer published a little pamphlet that detailed how the new healthcare laws would effect our coverage at work. I don't like the changes. Here are a few of the changes that effect me the most.

First, Health Savings Accounts (HSA) can no longer be used to buy over the counter drugs. It used to be that I could use my HSA to buy allergy pills for my son or naproxen for my wife's arthritis. By using my HSA, it meant that I was spending “before tax” dollars to pay for these over the counter drugs so if I spent $20 per month on these pills, I essentially took $240 off my taxable income each year. I still have to buy these pills, but thanks to Obamacare, I now use “after tax” dollars which means I'm now taxed on that $240. In a 20% tax bracket, that's $48 more in taxes just on my over the counter drug costs!

Another big change is in the tax deductible portion of medical costs. Currently, a person or family can deduct the actual cost of their medical expenses that exceed 7.5% of his/their income. Under Obamacare, that is increasing to 10%. Here's an example of how that costs more money: Suppose a struggling family makes $50,000 per year and has $5,000 in out of pocket medical costs. 7.5% of $50K is $3,750 so under the currently plan, they could deduct $1,250 from their taxable income ($5,000 in expenses minus the $3,750 threshold). Again assuming a 20% tax bracket, that would reduce this family's taxes by $250. Under the new plan, the new threshold is 10%. 10% of $50K is $5,000 so this same family under the same circumstances cannot deduct anything!

Still another change impacts those people (like me) who have high deductible insurance plans. Under my current insurance plan, I have a $3000/person or $6,000/family deductible per year. It sounds high but with my HSA, it's not bad. Under high deductible plans, the insurance companies are not paying for every little trip to the doctor (my HSA covers most of these) but I am insured against a catastrophic illness. I like this plan. It keeps my premiums low yet I still have peace of mind knowing that I'm covered if something terrible should happen. In the last 3 years with my employer, I haven't once reached the $3000 individual deductible.

Under the new plan, the maximum allowable deductible is only $2,000/person. Even though I've never actually had to pay $3,000 out of my pocket, I'm going to start having higher costs in the form of higher premiums. I haven't yet gotten the new rates but, on a family plan, I am certain my premiums will increase at least $100 per month. That may not be a new tax, but it's still more money out of my pocket each month because of Obamacare.

Yet the biggest tax increase will be in the employer paid portion of medical insurance. Under Obamacare, employers will start including the employer's cost for the employee's medical insurance on the employee's W2! So, if my employer is paying $400 per month for my insurance, I can expect to see a $4,800 item on my W2. Again, if we assume a 20% tax bracket, that's $960 more in taxes I'll have to pay. But mine is not even the worst. It's those employees who have the so-called “Cadillac” plans (like many union workers) who will get hurt the most by this. If a high paid, union worker has a real sweet, low deductible, family plan where his employer is paying $700, $800, or even more each month, that employee is going to face an increased tax burden of thousands of dollars! It's no wonder Obama has been writing waivers for many of his union buddies. I wonder how long that's going to last once this part of Obamacare takes effect?

Do you remember when Obama said if we liked our currently plans then we could keep them? That was a lie. Do you remember when Obama said that his new plan would lower healthcare costs? That was a lie. Do you remember when Obama said he wouldn't raise taxes on the middle class? That was a lie. Do you remember when Obama said he wouldn't support healthcare reform if it added one dime to the deficit? That was a lie too because the CBO says Obamacare will add $1.2 trillion to the deficit over the next ten years. Even the name, The Affordable Care Act, is a lie because I can't afford it and neither can the nation.

Obama was right about one thing; he had promised change. How sad it is that we just blew our chance to change it back.

I Guess Obama Would Rather Have Big Bird

I didn't hear it in the VP debate last night – the funny line about Big Bird. I was a little surprised because ever since the Presidential debate, it's been a favorite “gotcha” of the Democrats: “thank goodness someone is finally getting tough on Big Bird.” Yes, Mr. President, that's funny. Ha ha.

Perhaps I should remind the administration that we have a $1 trillion annual deficit. That means that each year, we're adding 1 trillion more dollars to the $16 trillion debt we already owe. I've talked about budgets on my blog before (here) but let me remind you a little of what I said then. A budget is a sort of list of priorities. We can't afford everything we want so we have to decide which things we're going to spend our money on.

Proverbs 22:7 says that the borrower is the servant of the lender. When we borrow money, we are giving away our liberty. In the case of our national debt, much of what we're borrowing is loaned to us from China. It's sad. What's worse is that we owe far more than can be repaid in our lifetimes so we are literally making our children, grandchildren, and even our great grandchildren slaves who will spend all of their lives and most of their paychecks paying back what we're spending today. And what do we have to show for it? Sesame Street? Curious George? We're turning our kids into slaves so that our kids can watch Barney! Oh yeah, that makes a lot of sense.

We're financing PBS to the tune of $400 million per year. That's almost half a billion dollars. It's a lot of money but it's only about 10% of PBS's annual revenue. If we stopped funding PBS, they might miss the money but they will continue. They'll just have to learn do it without tax payer subsidies like companies have to do it in the real world.

For the next four years, we need a President who can make the tough decisions. President Obama can't seem to find anything to cut. How strange. We can't afford to keep borrowing so some things have to go. We need a President who is able to decide what our priorities are. We need to provide employers incentives to hire more people. We need a strong military and good intelligence to fight the war on terror. There are dozens other things that I think would come before funding PBS but I guess Mr. Obama would rather have Big Bird.

Keep laughing, Mr. President. We'll see who's laughing in November.

Some People Aren't Paying Their Fair Share

After months of listening to Democrats whine about Romney not releasing all of his tax returns, we now get to listen to Democrats whine about Romney's tax return. There's really no surprise about what was in his return, was there? I mean, we all knew he's very rich and that most of what he makes now is income from the investments he's made in the past. He paid an effective tax rate of around 14% ($2MM taxes on $14MM income) which is typical for investment income. What is also not a surprise is how liberals are using Romney's returns as a prop in their class-warfare rhetoric.

I've never learned to sympathize with the liberal idea of fairness. Obama has talked ad nausuem about making the rich “pay their fair share” as though the rich haven't been paying their fair share already. According to Heritage.org, “The top 10 percent of income earners paid 71 percent of all federal income taxes in 2009 though they earned 43 percent of all income. The bottom 50 percent paid 2 percent of income taxes but earned 13 percent of total income. About half of tax filers paid no federal income tax at all.” I just can't get my head around the idea that it's “fair” for 10% of the people to pay 3/4 of all the taxes while 1/2 of the people aren't paying any.

One “fix” Obama has suggested is the so-called “Buffet Rule” where millionaires would be required to pay the same tax rate as “everyone else.” That's rather laughable since we've already seen that 1/2 of the people already don't pay any taxes. But besides that, why must “fairness” be accomplished by increasing the tax rate on millionaires' investments? Why not reduce the rate on working people's income to 14%? Better yet, why not make EVERYONE pay a flat tax of 14% of their income? That would certainly be the most fair thing.

The purpose of the tax code is supposed to be providing revenue to the federal government. However, the Feds see the tax code as an opportunity to engage in social engineering. The want to bludgeon the rich with abusive taxes and then hold themselves up as champions of the poor. Liberal Democrats are bringing back the caste system and want to create a perpetually poor voting base which is totally dependent on the charity of the political aristocracy. Tyrants!! Every one of them is a tyrant.

There's an old saying that when you rob Peter to pay Paul, you can count on the support of Paul. The current level of class-warfare goes well beyond that. Democrats are telling Paul to hate Peter.

Happy Labor Day 2012

To many people, Labor Day seems to be one of those holidays that means little more than a day off work. I'm sure I'm not the first one to notice the irony in celebrating working people by having a day without work but it is what it is.

Anyway, I've come to view Labor Day as a day to assess our freedom. The freedom to work for money is a sign of liberty. To choose how to invest your time and effort , to earn a paycheck, and to spend the money as you wish are things that free people do. Conversely, to be forced to work and then turn over your earnings to someone else is the very definition of slavery. I fear we're becoming a nation of slaves.

As I write this, our nation is $16 trillion in debt and we're adding more than a trillion more dollars every year. The only way the debt will ever be paid is by taxing future generations. A child born today will bear a portion of that debt that totals more than the child will earn in his entire lifetime so the debt is generational and will be an immediate liability owed by our children, and their children, and even their children. Every dime we're spending now will be taken from our great grand children's paychecks. They will be working for our benefit. By definition, they will be our slaves and will have to work to pay our bills even though we'll be dead and gone.

We should view Labor Day as a type of Independence Day. Let's make a vow to stop deficit spending and stop feeding the leviathan that is our federal government. Let each person enjoy the fruit of his own labor instead of turning over a larger and larger part of his paycheck in the form of taxes. More importantly, let our grandchildren do the same.

A “Fair” Alternative to the Buffett Rule

With Obama having very little to show for his first term in office, his strategy for reelection seems to be promoting tax “fairness.” The one and only plank in his tax fairness platform is the so-called “Buffett Rule” which is new type of alternative minimum tax that will require people who earn more than $1,000,000 per year to pay the same tax rate as “everyone else.” It's a nice sounding soundbite but it's a strategy that would be hard to execute.

First off, nearly ½ of the people in the US pay NO federal income taxes at all. So why should I take seriously any claim that it's millionaires who aren't paying their fair share? After all, even 10% of $1,000,000 is infinitely more than 100% of nothing. If we're aiming for fairness, it's those people who pay nothing who aren't paying their fair share. The millionaires are paying for many of the benefits that the free-loaders are using. The Occupy Movement should be happy they have it so good. Instead, they whine about needing more. They now want the 1% to pay for their college, their health care, and even their homes. I guess by “fair” they mean someone else should pay their bills.

When the President talks about fairness, he's not talking about the 50% that pay no taxes. He's talking about the rate that millionaires pay compared to the rate that middle class workers pay. According to the President, if someone makes $1,000,000 per year, he should pay at least 30% of his income in taxes. Hmmm. What about people who make $900,000 per year? Is is OK if they only pay, say, 20% when millionaires are paying 30%?

When Mr. Obama released his tax returns for 2011, we saw that he actually paid a lower rate than his secretary (source). White House spokesperson Amy Brundage said of Obama's return, “[this] is exactly why we need to reform our tax code and ask the wealthiest to pay their fair share.” That's odd. The Buffett rule would not have made a difference for the President since his income was less than $1,000,000.

In the US, we use marginal tax rates. Otherwise, a person who makes exactly $1,000,000 in one year would net less after taxes than someone who made $995,000. The way marginal tax rates work is that as people make more and more money, they enter progressively higher tax brackets and pay a larger percentage of taxes only on the amount they earn in the higher brackets. It's a rather cumbersome system but that's the way it works.

Liberals have taken advantage of the tax code to engage in social engineering. This way, they can entice people into buying an electric car, for example, by giving tax subsidies to people who buy them. With so many pages in the tax code, numerous tax credits, tax deductions, and loop holes, people in the higher tax brackets never pay taxes on their entire income.

The purpose of taxes is to raise money for the government but liberals don't give a whit about revenue. Even if passed, the Buffett Rule would only raise about .43% (less than half of one percent) of our current deficit. Democrats are trumpeting the Buffett Rule only out of some absurd sense of “fairness.” It will not address out of control spending. It will not create jobs. It doesn't do anything except punish millionaires and give the President something to run on besides his failed domestic policies. It's class warfare at its worst.

If tax fairness is the objective, then I have an even more “fair” alternative to the Buffett Rule. Let's do away with all tax deductions, tax credits, and tax loop holes, then go to a flat tax of 15%. This way, millionaires and billionaires pay the same as their secretaries; middle class workers will pay less taxes; and all those people who don't pay any taxes will finally end up paying their fair share.

What could be more fair than that?

Rights Belong to Individuals

In my last post, I talked about how Obama-care has mandated employers to provide things like contraceptives and other services which might conflict with the employers' religious beliefs. In an effort to defend this dangerous idea, liberals have raised many weak arguments. One example of a weak argument is the idea that, since pregnancies and babies are expensive, paying for contraceptives actually reduces the overall cost of health care.

The wisdom of this argument (if any) rests on the premise that it's better to sacrifice individual liberties for the betterment of society as a whole. In this case, by forcing employers to pay for contraceptives, everyone enjoys lower health care costs. This same argument has been used for years regarding seat belt laws: since seat belts saves lives and reduce injuries, forcing individuals to wear seat belts reduces health care costs to society.

First, let me ask: Is this really the precedent liberals want to set? Do they really want the benefit to society to be greater than the rights of the individual? In this case, they probably do which is why they raise the argument. However, this opens the door to tyranny. According to this logic, what would stop congress from passing a law mandating that everyone use contraceptives? Some might say, “Well, congress wouldn't do that” but the question still remains if congress has the power to do it. If we buy into the argument that congress can decide what's best for society – even at the cost of individual liberty – then yes, we've given them the power to do it!


In case there are liberals who still don't see the danger, let me ask this: what happens if next year, congress decides there aren't enough babies being born?  For the good of society, congress decides that no women may use contraceptives.  If the benefit to society is the objective, then what argument will liberals use then?

Second, there's a glaring flaw in the liberals' arguments: You see, the very notion that society incurs a cost for individuals' health care decisions stems from the liberal idea that society should pay the costs individuals' health care. Here's a suggestion: if someone makes a poor decision, let him suffer the consequences of it. When people don't have any consequences for bad decisions, it's a license to sin.

Since we've been talking about contraceptives, let's talk about a related issue – out of wedlock births. Today, more than half of all births to women under 30 are out of wedlock. In almost every area examined, children born to unwed mothers suffer for it. They are more likely to live in poverty, to drop out of school, and to commit crimes. What is the liberal solution to the problem? It's to give money to women who have children out of wedlock! Unmarried mothers often get food stamps, free health care (Medicaid), rent subsidies, daycare subsidies, etc. What if they have still another child? Why, they get more money, of course! Here's the weirdest part – if the women consider marrying the fathers of their children, they understand they will likely loose their government benefits. So women have babies and get benefits – they marry and loose benefits. By the way, with contraceptives so readily available, why is the illegitimacy rate so high anyway? Given the fact that illegitimacy rates are so high, do you think that at least some women might have an incentive to make bad decisions?

Consider the alternative. What if women who have children don't receive more government benefits but are simply burdened with another mouth to feed? What if they knew they would be saddled with higher and higher daycare costs for every child they have (while they have to work two or three jobs to pay for it)? If a woman knew how much of a burden a child would be, might she make better decisions about birth control or premarital sex?

Compelling all people to share the burden of those few who make bad decisions is another road to tyranny. When individuals have no consequence for making bad decisions, they have no incentive to make better decisions. This leads to higher and higher costs for the rest of us. It's the exact opposite of what liberals are trying to argue now. There is no savings. If something seems “free,” then more people will abuse it which leads to higher costs. If women believe they can have children with no consequence, then the overall cost to society is greater: higher poverty, higher taxes, higher crime, higher dropout rates, and higher everything.

Rights belong to individuals. So do responsibilities. When the government tries to protect the rights of society at the expense of the rights of the individual, it's not liberty. It's despotism.

They Don't Care Because It's Not Theirs

In responding to my last post, “Why do they Occupy in Tents?”, an anonymous visitor said, “[E]ven if we want equality in a lot of ways is it really okay with us for people to invade and take over our personal belongings? If I bought a Park and told every body they could come use it as a park, I wouldn't expect them to use it as a free camp ground. I didn't say it was a camp ground.” This visitor has struck upon the very reason why liberalism never works. These people don't care about the park because it's not theirs.

It has always been the case that people tend to take better care of things that they own. Landlords will certainly attest to this fact once they've had renter after renter trash their house. People who own the home and pay for its maintenance would never treat the home as poorly as many renters would. And neighborhoods with lots of federally subsidized housing are usually the worst.

We often see this attitude in teenagers. Parents work hard to buy nice things for their kids. Sometimes the kids don't even care as much about their own stuff as the parents do. Have you ever heard your kid say something like, “Oh, mom, I spilled nail polish on those new jeans so I'll need another pair before Friday”? It's not until they work, earn their own money, and pay for their own things that they begin to appreciate the fact that money is a limited resource.

This disregard for the property of others permeates throughout the entire Occupy movement. For example, one thing I've heard them demand is student loan forgiveness. Never mind that the lenders who made the loans and the tax payers who subsidized them will be out millions of dollars. The protestors don't think it's fair that they have to pay back tens of thousands when all they got out of it was a college education! So you see, they don't care that other people will lose money as long as they get to keep their money.

We see this attitude the most in the movement's “class warfare” rhetoric. The “tax the rich” mantra is simply a demand to take something away from other people so the protestors can have it. They want free college, free health care, free housing, and even free banking but they certainly don't want to pay more taxes to get any of it. Just let the rich people pay for it.

Newt Gingrich had it right when he said:

“All the Occupy movement starts with the premise that we owe them everything. They take over a public park they didn't pay for, to go nearby to use bathrooms they didn't pay for, to beg for food from places they don't want to pay for, to obstruct those who are going to work to pay the taxes to sustain the bathrooms and to sustain the park, so they can self-righteously explain they are the paragons of virtue to which we owe everything.”

What more can I say? Amen!

Why Do They Occupy in Tents?

Just a quick post today.

I heard on the news today that the Occupy protesters were evicted from Zuccotti Park in New York where they basically have lived since mid-September. After a short legal battle, the protesters were allowed to return – but without the tents. Several of the protesters I heard were very vocal about their dissatisfaction with the ruling. You would think the courts had taken Linus' blanket away from him.

Many pundits are saying that, without being allowed to have tents, the protest movement will begin to wane. That was inevitable. It's mid-November and soon there will be snow on the ground. When you're living in a tent, I'm sure it's easier to be principled on a crisp, fall evening rather than on a freezing night under a foot of snow.

What exactly is it about the tents? I ask in earnest because I really don't see why they can't protest like everyone else. Many people have tried to compare the Occupy protests with the Tea Party protests. There's nothing to compare. The Tea Party was all about less government spending and regulation and Occupy wants more government regulation and spending. And the Tea Party was able to make their statement without pitching tents.

I think the difference might lie in the demographic of who was protesting. The Tea Party protestors were primarily hard working, middle class, TAX PAYERS! They couldn't sleep in the parks because they had jobs to be at in the morning. On the other hand, the Occupy protestors, while claiming to represent the “99%,” seem to be largely made up of college students and other “non-working” folks. How else would anyone be able to sleep in a park for two months? Obviously, the Occupy protestors can't represent the 99%. Most working folks have responsibilities which require bathing, shaving, and having laundered clothes.

How Not to Create Jobs

Part of the President's job speech last night proposed increasing taxes on wealthy Americans & CEO's (i.e. “employers”) and extending benefits to unemployed people. It sounds a little strange to me. Once again I suggest it might benefit our elected officials in Washington to brush up on economics. Let me give a thumbnail:

We work to make money, right? It's nice if we enjoy our jobs but if we don't get paid then it's not a job – it's a hobby. We work for a paycheck. When we get paid, we pay our bills. We pay our rent or mortgage, our car payments, we buy gas, we buy groceries, etc. We also have disposable income that we use for our enjoyment: we go out to dinner, we buy video games, we go to the movies, we take vacations, or whatever. When we spend our paychecks, we're helping to pay other peoples' paychecks. We pay for the salaries of people who work at the gas stations, the grocery stores, the restaurants, the theaters, etc. When they get paid, they spend the money much the same way as everybody else. In short, I work to produce goods or services so that I can buy goods and services that other people work to produce. This IS the economy!

With unemployment so high, we have a lot of people who aren't producing goods or services. They are removed from an important part of the equation. There is “less economy” when more people aren't working. The economy is only sustained by the people who are still working and producing. So what is the President's solution? It seems that part of his solution is to take more money from the people who are working and sustaining the economy and give to the people who are aren't contributing to the economy!

It would almost be laughable that Democrats think this way but the effect of their policies is so tragic. I've heard Democrats, more than once, claim that paying unemployment benefits to non-producing individuals is the most “bang for the buck” in stimulating the economy. With staggeringly high unemployment and people already receiving benefits for 99 weeks, we should have climbed out of this pit a long time ago but we're still limping along. Now the President has suggested extending unemployment benefits another year? I'm telling you that is part of the problem. People aren't working because they don't have to and the economy isn't growing because so many people aren't producing.

If you want to make the claim that we need a safety net for people suddenly out of work then make that argument. It might be reasonable to help people but it should only be for a few months. If you enable people to remain unemployed then we're merely sustaining their poverty. I've written before how the Bible suggested we handle the problem: if an able bodied man doesn't work, then neither let him eat! When people aren't getting a government check each week for not working, and they have to decide between ANY job and starving, I guarantee you they'll take ANY job.

My advice to the President and all other Democrats out there is to drop the idea that taxing producers to pay non-producers can create jobs. It was a joke in 2009 and it's an old joke now.

No Surprises There

I would like to brag and say that I called it in advance. Instead, I'll say that the reports I heard in advance of Obama's speech had it right. There weren't any surprises in tonight's speech. Just to be clear – there weren't any surprises in the “job creating” proposals Obama gave and neither were there any surprises in the political rhetoric we've come to expect.

The payroll tax cut was there as expected. Did anyone pay attention to the careful wording the President used to describe it? To wit, “Pass this jobs bill, and the typical working family will get a fifteen hundred dollar tax cut next year. Fifteen hundred dollars that would have been taken out of your paycheck will go right into your pocket. This expands on the tax cut that Democrats and Republicans already passed for this year.” Wow! Talk about spin. Let me translate that for those of you who don't understand Obama-speak. Congress has already passed a payroll tax “holiday” that has been in effect all this year. The average worker will save about $1,500 this year. Let me ask, what has this done to help create jobs? Unemployment still towers at around 9.5%. Anyway, the “holiday” is about to expire and next year our taxes were going back to normal – that is, we would have to pay an extra $1,500 in taxes next year. Obama's proposal is to simply extend the “holiday” another year. The so called “tax cut” next year is that you won't have to spend $1,500 more in taxes after all! See? It's spin. And this $1,500 “tax cut” that hasn't created jobs this year is supposed to create jobs next year. Yeah, right.

Another “non-surprise” was the temporary nature of the plan. Again, a one time tax incentive given to an employer to hire is not going to help the employer pay the employee's salary next year. Instead, employers worry about the other parts of Obama's speech. They are concerned, for example, when Obama talks disparagingly about how “affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets.” In other words, “we going to give you a small tax break now but we're going to stick you with higher taxes later.” Obama said this overtly when he said, “And I believe the vast majority of wealthy Americans and CEOs are willing to do just that [pay higher taxes], if it helps the economy grow and gets our fiscal house in order.” The simple fact of the matter is that raising taxes on anyone doesn't help grow the economy or create jobs. Anytime you hear a Democrat talk about “wealthy Americans and CEOs”, just remind yourself they are talking about “employers.” It is absurd to think that taxing job creators creates jobs.

Consider this quote from the speech: “Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers?” In logic, this is known as a false dichotomy. Has it not occurred to Mr. Obama that oil companies also hire workers? Obama believes he can create jobs by giving one time tax breaks to small (and sometimes struggling) businesses and imposing permanent tax burdens on more established businesses like oil companies.

The President also said, “We need a tax code where everyone gets a fair shake, and everybody pays their fair share.” Let me say again: taxes do not create jobs. Never. It's counter productive to talk about raising taxes in a speech aimed at creating jobs. But besides that, please explain to me how everybody pays their fair share when nearly 1/2 of the people pay no income tax at all. There's a common expression that talks about having skin in the game. More Americans might be concerned about the out of control spending going on in Washington if more Americans had to pay for it. As it stands now, 1/2 of the country is enjoying the tune while the other 1/2 is paying the piper.

Finally, Mr. Obama played to his base on more than a few occasions. He mentioned spending more money for teachers no fewer than six times. He talked about modernizing or renovating public school buildings four times. He mentioned a favorite, liberal pet project – namely public transit. He even mentioned how his plan to renovate schools is supported by “America's largest labor organization.”

Oh, I almost forgot – Mr. Obama also proposed extending unemployment benefits for another year. On top of the 99 weeks already available, that means people can get paid nearly three years for not working. I'm going to be talking about unemployment benefits again in an upcoming post.

Like I said, no surprises here. It's all more of the same. Class warfare. Taxing the rich. Increased spending. More government handouts. It's all present and accounted for. The only surprise I could confess to is that he didn't blame Bush for it all.

A Preview of President Obama's Job Speech

All day on the radio today I've been hearing news briefs previewing Obama's big job speech tomorrow. According to Bloomberg, “The main components of Obama’s jobs plan... have been largely telegraphed by the administration. For weeks, people familiar with deliberations have said the White House is considering tax incentives, infrastructure and assistance to local governments.” Excuse me? Are they serious? It sounds like more of the same to me.

The “center piece” of the plan is supposed to involve extending the cuts in the payroll tax. Hmmm. Let's see. Obama offers a “payroll tax holiday” to spur job growth, it hasn't worked thus far, so the center piece of his new plan is to extend them? Yep, that sounds like Democrat economics all right.

What's new is that in this plan, he's supposed to include a reduction in the employer paid portion of the tax. I don't see how that's going to make a difference. Temporary incentives never work. Why would they? If you give a temporary incentive to an employer to hire someone, the employer knows that next year he will no longer receive the incentive yet he's still stuck paying the employee.

The second point, according to Bloomberg, is spending on infrastructure. I suppose this is like those “shovel ready” projects that were just waiting to be funded with the last stimulus package. As Obama has laughingly admitted, they “were not as shovel ready as we expected.” I'm sure he's a lot more optimistic about these new projects.

One news report suggested some of the money for infrastructure would be used to repair and update public school buildings. Once again, this is a temporary fix. If I own a construction company and I hire a few workers to help repair an old building, once the building is done the workers will go.

And did I read that correctly? Did Bloomberg really suggest that part of the jobs plan includes “assistance to local governments”? I don't see how funding teachers' unions and bloated government workers' pension plans will create jobs but I'm sure it will result in a lot of grateful voters next November.

The funniest thing I heard on the radio all day was how Obama intends to pay for all this. The report said he will offset the programs with “future deficit reductions.” That is a riot. That would be like me personally saying, “I'm going to borrow $200,000 now and I'm going to pay it back by borrowing less later.” You can see how that doesn't quite work.

I'm sure somewhere in the speech he'll also be blaming Bush and the Republicans. Right after the election, I predicted that Obama would continue for a while to blame Bush. I had no idea, though, that he would continue blaming him 3 years later.

Maybe I'm putting the cart before the horse. Maybe I should wait until I hear the President's plan before I comment on it. Maybe the President has some good ideas about how to create jobs. I just wonder why he's waited until now to present them. I guess he wanted to try placing a moratorium on offshore oil drilling and promoting “green jobs” first.

Liberals Have it All Backwards

In my last post, I talked about how liberals think that when the government cuts spending it costs you money. The reality is that since it's our money they're spending, we're truly saving money when they spend less. This got me to thinking; liberals have a backward way of thinking about a lot of issues. Here are a few other examples.

• Nancy Pelosi seems to think that paying people who aren't working will somehow create jobs.

• Louise Slaughter claims that if we don't allow women to kill their babies then we want to kill women.

• Hillary Clinton says that we can't let parents have school vouchers because some parents might send their kids to a white supremacy school but mothers should have the choice to abort their children.

• Liberals want to legalize marijuana and ban salt.

• Liberals want to ban toys from happy meals but give out condoms in schools.

• Liberals think that giving tax breaks to businesses doesn't create jobs but giving them billion dollar bailouts will.

• Politically conservative Mel Gibson made some vulgar comments to his girlfriend while drunk and was fired by his talent agency for being a misogynist. The liberal Roman Polanski drugged and raped a 13-year-old girl yet went on to receive three Academy Awards.

• Republican Trent Lott makes a complimentary comment during Strom Thurman's 100^th birthday and loses his leadership position for being a racist. Democrat Robert Byrd was a recruiter for the KKK and receives a 100% rating from the NAACP.

I could go on but there's no need. These few examples more than prove my point. I'm not a psychiatrist or anything but liberalism seems to be a mental disorder. I'm reminded of Isaiah 5:20, “Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter!” I guess Isaiah had liberals even back in his time.

How Liberals Think that Deficit Reduction Costs Us Money

So, I'm in McDonald's yesterday eating a $3 breakfast from their value menu because I can't afford a breakfast buffet anywhere because gas is almost $4/gallon... Anyway, McDonald's usually has their TV tuned in to CNN Headline News or some other liberal, morning show. This day, they were talking about the debate going on in Washington over the budget. As they cut away to a commercial, the reportette teased the upcoming segment by saying something like, “Medicare. When we return, find out what the deficit reduction plans will cost you.”

I sat there for a minute chewing on my sausage biscuit and thinking about what I just heard. Let me get this straight: are they saying that Washington spending less money is going to “cost” us something? Perhaps someone needs to be reminded that it is our money that is being spent! If the Feds spend less of it, then we are saving money! If I'm spending $90K/year but am only making $50K per year, I would obviously save money if I cut out the $40K/year excess. Duh! Maybe I was doing some really fun things with that extra $40K. but doesn't matter. I can't afford to forever spend nearly twice what I make.

I believe the liberal attitude that a savings is really a cost turns over the understanding of the word “our.” Is this “our” money? When a liberal says, “our” he means, “us liberals.” This isn't everyone's money; it belongs only to the elite folks in Washington and the people to whom they choose to dole it out. This is why they always invoke class jealousy. Most of the people who receive government benefits don't pay any taxes so it isn't “their” money being spent. Instead, if we reduce our spending, they might receive less in benefits. This is why liberals say that a reduction in spending “costs” them.

Along those same lines, when Obama talks about “everyone” having to sacrifice, he really means that rich people have to pay more in taxes. Never mind that only 50% of the people are already paying almost 100% of the taxes; to him, they (that is, “we”) are not paying enough. If liberals are forced to spend less on their favorite causes, then the “rich” (which means anyone who pays taxes) have to pay more in order to be “fair.”

It's been said already that the federal government doesn't have an income problem. It has a spending problem. We need to cut spending. Saying that it's going to “cost us” to have deficit reduction is a shameful attempt by liberals to stir up the support of the recipients of wealth redistribution to fight back against conservative calls for fiscal discipline in Washington. Hopefully, enough people have grown tired of these class-warfare arguments by now that they won't listen anymore.

Rising College Tuition Rates: Economics 101

My daughter graduates high school this year and is making plans to go to college. She will begin studying anthropology which I believe is fantastic since we need more scientists who are also young-earth creationists but that's the subject of another post. Anyway, she did well in high school (3.97 GPA) and is currently 19^th in her class of over 400 students so she will qualify for some scholarships. Even so, we're still going to probably have to help with some of the costs and she may even have to take out some student loans.

In case you haven't heard, college is becoming more expensive every year. In a Wikipedia article that includes a break down of inflation rates between 1978 and 2008, we find the following information:

Cost of living increased roughly 2.5-fold during this time; medical costs inflated roughly 6-fold; but college tuition and fees inflation approached 10-fold. Another way to say this is that whereas medical costs inflated at twice the rate of cost-of-living, college tuition and fees inflated at four times the rate of cost-of-living inflation. Thus, even after controlling for the effects of general inflation, 2008 college tuition and fees posed three times the burden as in 1978.

So how does a middle class family like mine afford to send a kid to college? It seems more and more impossible every year and so there are constant calls for increased government assistance to help students pay for college. In the 2009-2010 school year, more that $154 billion in financial aid was awarded to undergraduate students. Yet the cost of college is rising as fast as the money comes available. Any guesses why?

It just so happens that I too am a college graduate only my major was in business. In my opinion, most politicians in Washington would benefit from a refresher course in economics. There's a very simple principle they teach in Econ101 – see if you remember it: When there is a surplus in the money supply, the cost of goods rises. Hello!! It's called inflation. Ring any bells?

I know it's been a while but we have had some recent periods of economic boom. Every time the economy starts to heat up, the Federal Reserve tries to put the brakes on by raising the Federal discount rate. Why? Because too much money in the economy drives up costs. Even in our current, economic woes, you might have heard that inflation is becoming a concern because the US is simply printing money. More money equals higher prices. Always! Like I said, it's Econ101. Every time the government opens it checkbook (actually, it's our checkbook) to help pay for rising college tuition, they are actually helping to drive up the cost! I don't care if the Feds made $50K per year available for every kid to go to college; in no time at all the cost of 1 year of college will rise to $60K.

If any elected official heeds my advice to brush up on economics, he might also remind himself of the meaning of the term “free market.” If we let the free market do its job, college costs will stabilize at a rate most people can afford. Not only do government subsidies artificially inflate the cost of college, we are doing it at a time when the nation can least afford it. We're leaving a huge public debt that the next generation will have to repay plus we're burdening them with higher tuition costs that many kids have to finance as well. Future graduates will not only have to start repaying huge student loans but will also face enormous tax rates. It's inevitable.

Proverbs 13:22 says that a good man leaves an inheritance to his children's children. What do you call a nation that leaves it's children $20 trillion in debt?

Taking a Look at Invisible Taxes

I've worked in banking and financial services for over 20 years. During that time, I've loaned tens of millions of dollars to literally thousands of people. Perhaps my opinion might still be considered anecdotal but let me tell you something that I've noticed in my experience. There are many people out there who don't know how much they make. When asked about their income, they only answer with how much they take home. They know there are taxes being taken out of their check but they really have no idea how much. They can tell you to the penny how much their paycheck is; they just don't know how much it was before the government took it's share.

How exactly did it come about that the government has first dibs on our income? I really don't know. I must say, though, that it's very clever. By taking their cut before we get our check, it's like we never miss the money. How can we miss something we never had? I think that's the intended effect. The government believes it has a right to the first fruits of our labor and if they take it before we even see it, we're less likely to make a fuss.

I've noticed a similar practice in the gasoline tax. Have you noticed gas prices lately? They've gone up a little since Obama took office. The prices displayed on the pump already include the taxes. The average tax (federal & state) on a gallon of gas is 48.1 cents (source) but since it's already included in the price, you don't know how much you're paying for gas and how much you're paying in taxes.

Do you think we need tax reform? Here's one place to start: the government needs to stop taking out taxes before we get out check. Instead, the government should send us a bill each month and we have to write a check to pay our taxes. What do you think would be the result if that happened? I believe people would begin rioting in the streets. I believe that when people see their tax bill is more than their car payment, they'll storm the capital.

The same could be done about the hidden gasoline tax. In KY, our sales tax is 6%. When I buy a cheeseburger for $1.00, I have to pay $1.06. Likewise, the gas pumps could display the cost of just the gas and after we pump 10 gallons, they charge us for the gas and add another $4.81 cents for the tax. If you want to get people outraged about taxes, this would do the trick.

The government hides taxes everywhere. They're in your phone bill, your utility bill, even your cable bill. Do you know how much you pay for cable? You probably do. How much of it is taxes? Do you know? I'll bet you don't. These are stealth taxes. It's the modus operandi of the of big brother. People aren't passionate about the government intrusion into their lives because they can't see the intrusion. The feds like it that way.

It's April 15th and the Feds want to know where your taxes are!

It's a beautiful day here in Louisville: spring is in full bloom, it's unseasonably warm (thank you global warming), and there's not a cloud in sight. Nevertheless, a shadow hangs over this day every year; it is the tax filing deadline. After midnight, any of you hardworking Americans who have not filed your taxes will suddenly become criminals.

Most people know what today is and Tea Parties have been scheduled all over the country to protest the out of control spending. However, a few people aren't aware what happened just a few days ago: April 9th was “Tax Freedom” day this year. Every penny Americans earned between January 1st and April 9th is what is needed to pay our federal, state, and local tax liability. It's kind of mind boggling when you think about it: if you had to pay your taxes first, only now would you get to start enjoying your paycheck.

Not so fast!

There's also this part of the federal budget called the deficit. You see, even though the government has theoretically collected all it's taxes, it's continuing to spend money. If you factor in the cost of the deficit, you would have to work until May 17th – another 38 days – to pay for Congress's runaway spending. According to the Tax Foundation, if you factor in the deficit, May 17th is the second latest Tax Freedom day since WWII. “When was the longest,” you might ask? That would be 2009, the first year of the Obama Presidency!

It's gone far enough. For the last two years, government spending has ballooned and it cannot continue. Proverbs 13:22 says, “A good man leaveth an inheritance to his children's children.” I guess that also means it would be an evil man who would leave his grandchildren a crippling national debt.

I would ask when we're going to wake up; hopefully, some people already have. Now go out, file your taxes, then call your congressman to protest!