More Taxes Coming Soon

I warned you about the consequences of voting for Obama and the liberals last November. I told you about the big government they wanted and how that would translate into higher taxes, but you went for Obama's no tax increases on anybody making less than $200k. The problem is we need to pay for national health care and the stimulus plan and all the other spending he wants. Even the President said we are out of money, after proposing a budget with a $3+ trillion deficit.

So now to pay for all of this excess in government spending, some are floating the idea of a national value added tax. Of course this would add to the cost of everything we buy, it's like instant inflation. Imagine you have $100 in the bank, after the VAT is imposed that $100 instantly buys less than it did the day before.

What would this do to the economy? All of a sudden the government is taking a bigger chunk of money out of the pockets of consumers and consumers have less buying power. Seems like they will buy less stuff, leading to more layoffs and dependence on the government for unemployment benefits. Finally isn't this a double tax? You are taxed on your income and then when you try to spend i,t you are taxed again? This is what you get when we elect tax and spend liberals. Their solution to everything is to increase the size of government and the tax levels to pay for it. We must remember what President Reagan said: Government is not the solution to our problems, government is the problem. They are once again demonstrating that.

We can only hope that small government conservatives can reign in the size of government and stop increased taxes. I sure don't trust the President to keep his promises about taxes.

Auto Bankruptcies

I guess I'm not smart enough to understand the whole auto bailout thing. I remember back in December the two of the big three went I'm front of Congress and begged for loans so that they could avoid bankruptcy. Bankruptcy was made out to be a disaster, so the government threw good money after bad and gave them billions in loans. Why did they do this if after a few months Chrysler declared bankruptcy and GM is almost there. They could have gone bankrupt without government loans back in December. I believe that the government gave them the loans so they could influence these companies, much the same way they used the TARP to pressure banks, and after they go bankrupt the government gets an equity stake.

That's just what we need the government controlling the means of production. I wonder what the government designed car will look like, probably the same as those old East German cars. I'm sure this can't miss. Just another step down the path to socialism, when we can't let the market work.

Fight for States' Rights

If you haven't read this, take a minute and do so. After 80 years of the federal government imposing their will on the states, the states are starting to fight back.

The problem that this is going to run into, is that the Constitution says that the federal government is to promote the general welfare, which some believe gives the federal government the right to do almost anything as long as they believe it promotes the general welfare. While this is not often used in court arguments, it does influence what politicians try to do. In order to expand the reach of the federal government, politicians have turned to the commerce clause, which has become so broad that the government can make an argument for regulating almost anything, and the Supreme Court has usually upheld their arguments.

In addition to supporting the reach of the commerce clause, the Supreme Court has repeatedly ruled against states who tried to used the Tenth Amendment to argue that the federal government did not have the authority to pass certain laws. There are of course rare exceptions to this, but the precedent is there to the benefit of the federal government.

As much as I would like to see the power of the federal government limited in favor of states' rights, I am doubtful that anything will come of this.

Memorial Day

I hope you took a moment today to remember those soldiers who fell protecting this country and our freedom. For the last century the United States has been both the beacon and protector of freedom around the world, and it is because of those that serve that we remain in that position. In addition, if you see a current member of the armed forces make sure you thank them for the sacrifices that they make. A lot of them leave their families to fight for freedom for a year to a year and a half at a time, some have gone four, five and even six times. It is quite a sacrifice that they make.

More on the Chrysler Bankruptcy

This is almost the same thing that I said on here last week about how the Obama administration interfered with the senior status of some lenders, but this appeared in the Wall Street Journal. They too believe this sets a dangerous precedent.

We Must Learn From California's Mess

Yesterday the voters of California voted down tax increases, that if implemented probably wouldn't have solved their problems. We must learn the lesson that California can teach us. Voters and legislators there were determined to over-regulate everything and to provide vast social programs. In order to pay for this California has one of the, if not the, highest state tax rates in the country.

The system they built was a house of cards. As the economy worsened, the tax base declined, while the social programs became more strained. In addition once you start to increase the size of the government bureaucracy, to manage all of these programs and increased regulation, it is extremely hard to downsize. Voters and politicians didn't want to give up anything they had instituted so of course to balance the budget they turned to tax increases.

When the economy is failing, jobs are drying up and companies are locating to more favorable tax and regulatory climates, what is the worst thing to do? Increase taxes of course. The voters were right to reject the higher taxes, now they have to be able to live with the consequences - massive government cuts.

There is a valuable lesson that we need to learn here. We must not use the government to increase unneeded regulation and provide vast social programs, as it creates a bureaucracy and reliance on government that is unsustainable when the economy goes south. The government is to provide services that the market cannot provide. Roads, defense, police, fire protection and schools are the big ones that come to mind. Not health care and education for illegal immigrants. We must not go down the road that California has followed. More laws, regulations and programs create a bigger government that is unsustainable and funnel tax dollars away from priorities.

Obama Playing Dangerous Game With Corporate Debt

The Chrysler bankruptcy shows us that the President and his administration are playing a dangerous game with corporate debt that could unravel and destroy corporate financing as we know it. The LA Times has a decent post about what happened.

To summarize the government forced a Chrysler bankruptcy because the deal they negotiated with the creditors favored the unsecured creditors over the secured ones. Mainly it was in favor of the unions. Imagine the precedent this sets, subordinate creditors were given priority of senior creditors. What is going to happen to the way corporations finance themselves if the people loaning them money aren't sure if their senior status will be upheld? You will see risk premiums rise as well as the cost of capital. This of course is bad for investment and the economy.

Maybe the Speaker Needs Some Waterboarding

Did you see the train wreck that is Nancy Pelosi today? She said that she was informed of enhanced interrogation techniques that the CIA was performing but not briefed even though other members of congress says they were briefed about it by the CIA. She then went on to say that the CIA lied to and mislead congress.

She is trying to cover her ass because she and a lot of other Dems have been critical of the Bush administration's interrogation techniques. Problem is that now we know they knew about them and did nothing to stop them even though they controlled the congress for the last two years of Bush's term. It's kind of hard to be critical of something you knew was going on and did nothing to stop. So now she has to lie and mislead the public about what she was told. Maybe the CIA should use some enhanced interrogation techniques on her to get the truth.

My Opinions Supported

There is a good reason why you read this and listen to me, it's because I'm right. Here is one about the economic dangers and shaky science the EPA is using to try to regulate greenhouse gas emissions.

This one says we can't keep spending money like we are or we are going to be in serious trouble.

I have been saying these things for months and so have many other conservative commentators, I guess time will show that we are right.

Budget Deficit Grows

Today new budget deficit projections were released that shows a $1,800,000,000,000 deficit. This is up $90,000,000,000 from the last estimate, just three months ago. I like to put all the zeros behind the numbers to show how big they are.

Once again the Obama tried to say that it is all Bush's fault. I wonder how long he can use that line. Imagine in four years when he is running for re-election still blaming everything on Bush.

From 2010-2019 the smallest deficit is projected to be $500,000,000,000, with the cumulative deficit over that time to amount to $7,100,000,000,000. Those projections assume that the economy contracts by 1.2% this year and grows by 3.2% next year. The past two quarters have seen the economy shrink at over a 6% clip, so I am prepared for even bigger deficits.

To put this in perspective the current national debt at the time I'm writing this is $11,270,918,744,965. Obama's proposed budgets would increase the national debt by 62%.

By blaming Bush for the mess, the President can mislead the public into thinking that he doesn't really want to spend all this money, but that he has to in order to fix Bush's mistakes. We know of course this is a lie, Obama wants to increase the size and scope of government, he is a big government liberal. Check this out from the Heritage Foundation.

In addition there is a prominent economist out there who thinks the government should spend more to get us out of the economic downturn (maybe his wife will put another comment on my blog). That's right, let's dig the hole as deep as possible for future generations.

At some point we have to pay for all of this spending, the only question is how. This is where the President is lying to us, the way we are going to pay for his spending is by increased taxes for everybody. He says that nobody with an income under $200k will get a tax increase, but that just isn't true. The cigarette tax has already been increased, cap and trade will add on to that and whoever is unfortunate enough to follow Obama will have to clean up his mess by increasing the income tax. I wonder how long he will be able to blame Obama? This spending is setting up the next generation to fail, ask that same economist what increased tax rates do to aggregate expenditures also known as national income.

Miss California Gives Provide Glimpse Far Left

The whole Miss California controversy has given us a true view of what the far left believes, you can have your own opinion as long as it is ours. The judge who asked her the question during the Miss USA competition called her a "stupid bitch". I have heard more than once that she was selected to represent Californians and with her opposition to gay marriage she doesn't.

I find that an absurd statement. I heard on the radio today that in the US the issue of gay marriage has come onto the ballot 30 times, and all 30 times the public voted against gay marriage. The state of California voted against gay marriage just last November. President Obama and Vice-President Biden said last year they don't think gay marriage should be legal. So it appears that she is actually representing the majority of Californians and of the country.

Personally, I don't care too much about social conservatism, I'm more concerned with the fiscal and government power aspects, but what the left is doing to her is terrible. The judge said that she should leave politics out of the competition, then why ask her the question? Whether you agree with her or not you should at least admire the fact that she answered the question honestly and did not abandon her values.

The real travesty in this is that America has lost one of her great virtues, that you could have an opinion and be able to freely express it. What this episode has taught us is that unless your opinion is the "right" opinion people out there will try to destroy you. I know this is not limited to the left, but I have never seen anybody but the left go this far to personally destroy somebody.

Homeland Security Out of Control

It seems to me like we should be more concerned with the ineptitude in the government than the threat posed by these domestic terrorists.

More Light Rail Stupidity

Here we go again, we passed light rail last year without a complete plan. Now Bellevue wants a tunnel instead of an elevated train. It's only going to cost an extra $600 million. We already have the highest costing light rail system in the country so why not just add to that right?

The light rail plan ignores the suburbs, especially the northern ones and mainly benefits King county, yet residents in the three county area are all paying. If Bellevue wants a tunnel they should figure out a way to pay for it themselves. If they can't and don't want the elevated rail line I'm sure Everett or Tacoma will be more than happy to take it away from them. Stop complaining Bellevue, you are getting the benefit of this tax while many more people are paying for nothing.