Congressional Fiscal Malfeasance

While the incident in Benghazi is put on the back burner, the media is now focusing upon the “fiscal cliff” that Congress has so conveniently swept under the rug until after the elections.   And on top of it, the first consequences of the Patient Protection and Affordable Care Act (aka, Obamacare) are now becoming apparent.  Let’s not forget who is responsible for these “crises”.

That’s right – Our elected officials, the politicians who are mostly attorneys & not accountants, are making financial decisions that will affect this country and its citizens.  Their track record is absolutely abysmal.  After all, look at their forays into –

  • The Post Office – Government mandated and losing money hand over fist.
  • Amtrak – After 40+ years of government subsidies, it’s nowhere near breaking even.
  • Medicare & Medicaid – Will still go broke no matter what Obamacare props up or robs from the programs.  I fully expect Obamacare to replace Medicare & Medicaid at some point in the future.
  • Social Security – Is there ever an election cycle that doesn’t state that Social Security must receive new funding or it will go broke by some future date?
  • Department of Energy – Originally set up in 1977 with the mandate to bring the United States forward to be energy-independent.  Where are we in 2012?  Lots of failed ventures into “green” energy, and definitely not energy independent with conventional energy sources.
  • Corporate bailouts – Taxpayers will never see full returns on bailouts of the financial institutions and car companies.
  • Housing – Fannie Mae and Freddie Mac were just two of the government-sponsored disasters that started the current financial crisis.

And now healthcare for us all.  Who cannot remember this quote from a townhall meeting with Senator Arlan Spector and Kathleen Sibelius?

“I look at this health care plan and I see nothing that is about health or about care. What I see is a bureaucratic nightmare, Senator.  Medicaid is broke, Medicare is broke, Social Security is broke and you want us to believe that a government that can’t even run a cash for clunkers program is going to run one-seventh of our U.S. economy?  No sir, no!”

This is what government is now good for – bureaucratic nightmares that the average person cannot wade through without an attorney present.  Good for the attorney (if you can find one that can understand what the law states), but bad for you & me.  But I digress from the point of this post…

We, as a country and as individuals, are now being bombarded by visions of gloom and doom that the “fiscal cliff” is coming, and that Congress must act or the sky will fall.  Never mind that it was these clowns that created this situation and the situation that created the financial meltdown in the first place (read the post “The American Dream or Nightmare?” for an in depth background).  And isn’t it highly suspicious that although this situation was pending, very few politicians or news outlets brought it up until after the election?

I have no doubt that the political parties are playing political brinksmanship with this “crisis’ in order to score political points with the electorate.  I also believe that both the Republicans and Democrats have had their talking points & strategies in place long before now.  Frankly, I think this is disgusting because these asshats are playing with people’s lives, and for what?  How can businesses come up with a business plan (1 year plan, 5 year plan, etc.) if the government cannot come up with any long-term plan and make it stick?  Government policies change depending on who is elected, what their agenda is, and what laws they manage to get passed.  Let’s take the example of Obamacare and how businesses are now reacting to the changes that will be enacted after the first of the year.

One of the provisions is that businesses must provide health insurance benefits to full time employees.  A full time employee is defined as a person that works 35 or more hours per week.  Thus, as been reported in the media these past couple of weeks, many businesses, mostly restaurants, are cutting their employee’s hours to below 35 hours to avoid the mandate.

It is interesting to note that the above mandate actually hurts the people that Obamacare is supposed to help – the lower income, service-oriented workers who traditionally do not get healthcare benefits from their employer. Now, they may get healthcare, but they also have their hours reduced if they have a job at all.

While my liberal friends (yes, I have a couple) are decrying this development stating that this is unfair, I have to remind them that a business is in business to make money for the owner and investors, not to provide benefits solely for the employees.  If a business cannot make a profit taking all the expenses, taxes, and benefits into consideration, then they are out of business, i.e., no one has a job.

Welcome to the real world…

At the moment, I have health benefits from my work as it is a large company with several hundred people.  However, I do worry about what is going to happen in January 2014 when this little jewel will hit:

Now I know that my health insurance costs my company more than $2,000 a year.  I’m half expecting that my company (being ever so cost-conscience) will take the penalty hit, leave me out on my own to get healthcare coverage, and not compensate me for the premium that I would need to pay out of my pocket.  There will be others in the same situation.

What Obamacare and the fiscal cliff have in common is that our elected non-representational representatives are not capable of making long-term financial decisions that are in the best interests of the country and its people.  They are swayed by the almighty vote and tax dollars to be used for funding their pet projects.  Until the electorate wises up to this fact and realizes that these Congresscriminals are picking their pocket and holds them accountable, nothing will change.

Random Thoughts of the Week

It is really a sign of the lack of leadership when our country’s embassies are attacked by citizens of other countries, and we are apologizing for that country’s citizens’ actions.  Of course, we’re not demanding any reparations nor an apology from those countries.

Doesn’t anyone seem to realize that an attack on an embassy & killing the ambassador is an attack on the United States, and is considered an Act of War?

The Federal Reserve is printing more money, and the credit agencies are downgrading the United States credit rating again.  Obviously, the monetary policies of the current Administration aren’t working as this country is following down the path of European economic implosion.

Scary quote from Real Clear Politic’s Larry Kudlow:

In the supply-side model, the combination of lower marginal tax rates, lighter regulation and a downsized government in relation to the economy is the growth-igniter. Money, on the other hand, determines the value of the dollar exchange rate and subsequently the overall inflation rate. A falling dollar (1970s) generates higher inflation; a rising dollar (1980s and beyond) generates lower inflation.

This is the supply-side model as advanced by Nobelist Robert Mundell and his colleague Arthur Laffer. In summary, easier taxes and tighter money are the optimal growth solution. But what we have now are higher taxes and easier money. A bad combination.

The Fed has created all this money in the last couple of years. But it hasn’t worked: $1.6 trillion of excess bank reserves are still sitting idle at the Fed. No use. No risk. Virtually no loans. And the Fed is enabling massive deficit spending by the White House and Treasury.

Now, one key political point is that Bernanke’s desperate money-pumping plan to rescue the economy is a very blunt admission that Obamanomics has completely failed. The president is asking voters to give him more time, which is a very weak argument. But his Fed chairman is essentially saying we are running out of time and have to embark on this massive monetary action.

Obama now owns this economy.  No more blaming Bush.

Now everyone realizes that the majority of the Obamacare mandates occur after the 2012 elections, right?  So if you don’t like what has been revealed so far, then hang onto your wallets – you ain’t seen nothin’ yet…

Why is the United States giving literally billions of dollars in foreign aid to countries that are either openly hostile or non-supportive of the United States?

Isn’t it odd that countries/regimes/religions that deplore the United States do not afford free speech rights to their own people?  Furthermore, they certainly cannot stand a good dose of healthy criticism.

Isn’t it also odd that the United Nations, an organization overwhelmingly populated with dictators, despots, warlords, and other totalitarian nations wants to control the weapons of the populations of the world (including private ownership of weapons by the citizens of the United States)?  Well, perhaps not…

Why are the Marine guards in the embassies not allow to carry loaded weapons with the threat of invasion by protestors?  Obviously, the host countries cannot (or will not) provide security as evidenced by the events in Libya.

Having read Klien’s “The Amateur”, I’m not surprised at what this President is doing either with his domestic agenda(s) or his foreign policy.  Rather, I’m appalled beyond belief.


I think it’s time that Obama earned his Nobel Peace Prize…  Time for him to fly to the Middle East and speak personally to the protesting masses.


My wife really does not like Obama.  She stated this morning that she wishes that Obama and his supporters should leave the United States, form their own country, and quit screwing up the United States.  I suggested that they could name their new country “Obamanation.”  She laughed herself silly for the next five minutes…

The Economy is Doing Fine?

I know that there has been much to do about the following statement by President Obama and the following retraction walk back, but here’s one more take:

“The truth of the matter is that, as I said, we’ve created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government. Oftentimes cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”

“It’s absolutely clear the economy is not doing fine.  That’s the reason I had a press conference. That’s why I spent yesterday, the day before yesterday, this past week, this past month and this past year talking about how we can make the economy stronger. The economy is not doing fine. There are too many people out of work. The housing market is still weak, too many homes underwater and that’s precisely why I asked Congress to start taking some steps that can make a difference.”

Other than the fact that there is an amateur running the country, we have yet another viewpoint of what President Obama’s vision is for the United States – The Federal Government Will Fix Everything.  You and I know that this is the farthest thing from the truth.  Government does not produce a product, and the only hiring it can do is to swell the size of government.  Otherwise, it takes tax dollars that it steals collects from it’s citizens and redistributes the money to different agencies to spend, and often, it isn’t wisely spent.  The recent scandal with the GSA is just the latest of idiocy of government gone wild with public funds.  We (and our politicians) have to realize that there is only so much money to be had to support the government’s spending spree before the bill comes due.  And the bill is coming due at the speed of an express train – just take a look at the Eurozone’s problem with collapsing banks and country’s going broke because of deficit spending (spending more than what the government collects in taxes).

But that doesn’t seem to matter with the current administration (or the Democratic Left).  Here’s a quote from an article detailing the plight of Detroit as it follows the Left’s policies to its doom:

The Left’s answer to the deficit: raise taxes to protect spending. The Left’s answer to the weak economy: raise taxes to enable new spending. The Left’s answer to the looming sovereign-debt crisis: raise taxes to pay off old spending. For the Left, every deficit is a revenue-side problem, not a spending-side problem, and the solution to every economic problem is more spending, necessitating more taxes. The problem with that way of looking at things is called Detroit, which looks to be running out of money in about one week. Detroit is what liberalism’s end-game looks like.

And from the same article, a statement about government:

The third lesson is moral. Detroit’s institutions have long been marked by corruption, venality, and self-serving. Healthy societies have high levels of trust. Who trusts Detroit? This is not angels-dancing-on-the-head-of-a-pin stuff. People do not invest in firms, industries, cities, or countries they do not trust. Corruption makes people poor.

What is true of Detroit is true of the country. Our national public sector not only is bloated and parasitic, it is less effective, less responsible, and less honest than that of many other developed countries, including New Zealand, Canada, Australia, and Germany.

Indeed, do you trust our government?  I don’t, not totally, especially with the events over the past three years.  Promises made, promises broken, and the state of the country is generally worse than it was three years ago.  Here in Michigan, the unemployment rate officially stands at 8.3%, but that does not take into account people who have dropped off the unemployment rolls and/or have quit looking for jobs.  Nationally, it stands at 8.2%, and that is under the same conditions.

My personal opinion is that the politicians of both political parties are out of touch with the common working person.  Once the politicians are elected to government, we (and companies) are seen as no more than revenue sources for whatever social program or political kickback is on the politician’s radar at the time.  Green companies are the latest political kickback scheme involving political talking points and fiscal irresponsibility (follow the money for who made out on Solyndra and you will understand), and definitely did not benefit the working man as promised.

Perhaps we should look at one country who pulled their collective s*** together and got themselves out of the same predicament that we are finding ourselves heading toward at breakneck speed:  Sweden.

Americans still think of Sweden as a tightly regulated social-welfare state, but in the last two decades the country has been reformed. Public spending has fallen by no less than one-fifth of gross domestic product, taxes have dropped and markets have opened up.

From 1970 until 1989, taxes rose exorbitantly, killing private initiative, while entitlements became excessive. Laws were often altered and became unpredictable. As a consequence, Sweden endured two decades of low growth. In 1991-93, the country suffered a severe crash in real estate and banking that reduced GDP by 6 percent. Public spending had surged to 71.7 percent of GDP in 1993, and the budget deficit reached 11 percent of GDP.

The combination of the crisis and the non-socialist government under Carl Bildt from 1991 to 1994 broke the trend and turned the country around. In 1994, the Social Democrats returned to power and stayed until 2006. Instead of revoking the changes, they completed the fiscal tightening. In 2006, a non- socialist government returned, and Finance Minister Anders Borg, with his trademark ponytail and earring, has led further reforms. Sweden successfully weathered the global financial crisis that started in 2008, and the Financial Times named Borg Europe’s best finance minister last year.

Sweden’s traditional scourge is taxes, which used to be the highest in the world. The current government has cut them every year and abolished wealth taxes. Inheritance and gift taxes are also gone. Until 1990, the maximum marginal income tax rate was 90 percent. Today, it is 56.5 percent. That is still one of the world’s highest, after Belgium’s 59.4 and there is strong public support for a cut to 50 percent.

The 26 percent tax on corporate profits may seem reasonable from an American perspective, but Swedish business leaders want to reduce it to 20 percent. Tax competition is fierce in some parts of Europe. Most East European countries, for example, have slashed corporate taxes to 15-19 percent.

In the bad old days, the annual centralized-wage bargaining between the Trade Union Confederation and the Swedish Employers’ Confederation was a prized custom. But in the 1970s, this system led to both inflation and strikes. Today, it is long gone. Wage bargaining is still collective, but it is decentralized. Wage inflation is no longer a concern and strikes are extremely rare. The employers have won, but real wages are rising with productivity, so the workers are benefiting, as well. As everywhere, trade unions are losing members, money and power.

Now I certainly do not want to have my taxes raised to Sweden’s level, but without corresponding cutbacks in governmental spending and more business-friendly policies, any tax increase is counter-productive and will be stifling to any economic recovery.  And I don’t think that the TEA party advocates would sit back and agree with this either, at least without major permanent reforms in the tax and spend structure that is currently in place.

So is the economy “doing fine”?  No, but it is getting better, and the chuckleheads in Congress have the opportunity to pass budgets, regulations, and policies that will encourage real business growth instead of promoting the “industry/political cause of the week”.  Now if they would only put aside their political ideologies and do what needs to be done for the good of the country instead of themselves…

The Pursuit of Happiness

This are the words from the Declaration of Independence that many people seem to think that the Pursuit of Happiness is a guarantee, one that is backed by our government if you believe the Liberal agenda.  Yeah, those are probably fighting words for some Obama supporters, but let’s look at some opinions and facts starting with some personal experience.

I have worked for several different companies over the past 30 years, and they are rather large ones at that.  FMC and ITW were two of them.  I worked for divisions that were profitable, but didn’t meet the corporation’s goals for them.  The companies either closed or sold the divisions.

There wasn’t any calls for government bailouts of the employees, nor the employees demanding compensation.  No, most of us went about our business finding new jobs & careers.  Some were old enough and had enough years with the companies to take early retirement.

Some of you know that I worked for Chrysler for a little over a decade, and took a buyout on the eve of Chrysler’s bankruptcy.  While Chrysler seems to have recovered, it wasn’t without controversy, nor without government assistance.  The working conditions in my former department have deteriorated according to conversations that I have had with friends still at Chrysler.  Yes, it seems it was a good move, but I really have hated starting over.  Thus, I’m still pursuing happiness.

In contrast, let’s take a look at my now deceased former father-in-law.  At the age of 45, after spending 22 years at Anchor Glass, the plant closed.  Rather than look for another job, he decided to sit back, take a reduced pension & Social Security, and do nothing.  He became a bitter, sometimes cruel person with little to do for the next 20 years.  Did he find happiness?  No, he didn’t, not by a long shot.

Let’s be realistic – the Pursuit of Happiness is just that, pursuit – it doesn’t mean that we’re going to catch it.  Some people will, but some won’t.  There is not a guarantee of a happy ending, no matter what reassurances people (i.e., politicians) may make.  This is why I am extremely suspicious of any promises the politician’s make for economic and society’s happiness.

Who out there remembers the talking point for passage of the over $800 Billion “American Recovery and Reinvestment Act of 2009” would keep unemployment below 8%?  And how well did that work out?  Unemployment skyrocketed, and is now barely above 8% three years later.  And that’s still a bogus number.

This number does not take into account people who are no longer are kept on the unemployment rolls because their benefits have run out, and unemployment numbers only reflect the number of people collecting unemployment.  The number of people who have found jobs are often underemployed because they can’t find anything else.  This leaves a gap of people who have left the job market, i.e., quit looking because they cannot find anything.  The Labor Department or whatever other department that is keeping the statistics never has and never will keep those numbers because they have no way to determine who has given up.  So the figures lie, or at the very least don’t tell the whole truth.

So now the politicians are stating that the economic recovery (and by extension, the good times) is just around the corner.  But is that true?  According to this excerpt from a Bloomburg article:

It’s important to note that historical data collected by economists Carmen Reinhart and Kenneth Rogoff show that it takes almost five years for employment to recover from the wreckage of a deep financial crisis.

And a deep financial crisis it was too.  Not a good time for anyone, and there doesn’t really seem to be the quick fix that the President or the opposition keeps thinking there is.  From the same Bloomburg article:

Much of the problem is self-inflicted by Congress. Lawmakers are putting off until after November’s elections a crush of expiring Bush-era tax cuts, the payroll tax reduction and dozens of other tax breaks and spending programs. If they expire, and an approved $100 billion in spending cuts occur at the same time, economic growth would slow to 0.5 percent next year, the Congressional Budget Office says. As Bloomberg View columnists Betsey Stevenson and Justin Wolfers write today, last summer’s debt-ceiling fight almost derailed the recovery, and this year’s replay could be worse.

Congress also lacks a plan to attack the long-term problem of entitlement spending and has yet to fix an overly complicated tax code. Worse, lawmakers have purposely built instability into the system by disingenuously adding expiration dates to tax cuts to meet budgetary rules.

Those invoking the uncertainty principle fail to mention that inflation and interest rates are historically low. Federal Reserve Chairman Ben S. Bernanke has repeatedly pledged not to raise rates at least through late 2014 — a gold-plated certainty guarantee if we ever saw one.

The pledge may be showing up in an uncertainty index created by Steven J. Davis, a University of Chicago business professor, with two others. Using news searches, differences among economic forecasters and other tools, they have measured the level of uncertainty by month, back to 1985. Their research shows that monetary policy and taxes, not regulatory policy, are the biggest drivers of uncertainty.

The Senate has not passed a budget resolution in over 3 years.  That’s uncertainty.

Here’s the bottom line – Neither political party will be able to guarantee your happiness, no matter what the political elite promise.  Your happiness is up to you, because the politicians have a different agenda:

In case any of you didn’t know, a typical politician’s primary job is not to serve the people who elected him. His primary job is to get himself (or herself) elected or re-elected. Second is to reward all those contributors that gave $$ to help him get elected. Third is to get as many perks & benefits as he can while he is in office. Last on the list is the common person like you & I.

And that’s their happiness, not yours…

Post Election Post

There are a lot of ways I can look at the election results.  I can piss and moan about Obama being elected, but I don’t think that is the way to go in the long run.  Rather, I would like to hope for the best, that everything that we were expecting from this politician if he was elected doesn’t come to pass.  After all, the politician’s campaign promises almost always change once he (or she) is in office.

But that doesn’t mean I can’t get my digs in one last time before moving on…

Obama has run his platform on change & hope.  Now that he has achieved his campaign’s aims, he now has to deliver on the promises that he has made to all of his supporters.  That will be tricky as some of his supporters have conflicting agendas.  And we are anxiously awaiting the details on exactly how he’s going to do this.

I believe that I can safely state that the economy will be the main if not the only domestic issue that Obama must address when he first steps into office.  If the economy is not healthy, then any other program will meet with disaster.  Obama has his work cut out for him trying to part the seas of red ink.

Of other domestic interests will be universal health care and global warming.  To pay for all of the stimulus packages & perks that these interests have will be higher taxes.  I hate to break it to you, but someone will have to pay for it, and I can guarantee you that taxes will be raised on that 95% that Obama said that would not be affected.  The numbers just don’t add up, and the money will need to come from somewhere.

On the international scene is Iraq.  Once Obama takes office and is briefed on the reality that is in Iraq, his campaign promises may just fall flat.  He may jet around the globe meeting with foreign leaders and gathering accolades while explaining why he cannot bring the troops home from Iraq as fast as he promised.  I can also guarantee you that if a terrorist attack occurs on his watch, there will be hell to pay.

But there are a couple of other topics that I wanted to touch on.  And I know that these could possibly offend someone.  If so, please read the Comment Policies before turning the burner on "HI"…

I heard on the news that many foreign countries are hailing Obama’s election as a milestone, proving that the United States no longer has a racial barrier.  The media is absolutely giddy with reporting this news.  I cannot argue with that statement – for a person of a minority to be elected to the most powerful position in the world is a great achievement for the man and as a member of his race.  And yes, I said race.

For years we have heard that minorities need help in achieving the dream of becoming equal with the racial majority.  Billions of dollars have been poured into the cities and special programs toward achieving this goal.  So by this achievement by a person who has reportedly come up from the streets to the Presidency shows that it can be done if the individual puts their mind to it and works hard to achieve that goal.  The goal has now been met.

So the question begs to be asked:  What more help do you need?

The next one almost requires membership to the Aluminum Hat Society.

Did anyone else notice that when the Republicans were closing the gap in the polls something happened to the economy?  First, it was oil prices, then the credit crunch followed shortly by a rapid meltdown on Wall Street.

One could almost believe that someone was manipulating the various markets to make the current Republican administration look bad in order to elect the Democratic candidate.  We know for a fact that there are some very wealthy donors to the Democratic party who could pull this off.

If this was found to be true, and with thousands of people being adversely affected by loss of jobs and retirement funds, there should be some old-fashioned neck-stretching followed by heads on pikes outside the castle gates.  That is, if it is found to be true…

Last, did anyone else find it obscene the amounts of money both political parties spent on their presidential campaigns?

In closing, we all will be watching Obama’s presidency closely.  Very closely, and not because of his race, but for the views that he expressed during the campaign.