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I caught the end of tonight's World News on ABC. Since it was Friday their usual last feature is Person of the Week.

This week it was the three mayors of Los Angeles, Philadelphia, and Mesa, Arizona. What is it that moved ABC to select them as Persons of the Week? They want the federal government (specifically Congress) to stop dickering around and do something about America's crumbling roads. After all, the US used to be number one when it came to the quality of our highways and byways. But no longer. We now rate 20^th in the world behind Malaysia and Cypus.

"If they pass the surface transportation bill and America Fast Forward, it will allow us to accelerate the building of that 30-year project in a 10-year period of time, creating 166,000 jobs," Villaraigosa said. "These are the kinds of innovative things that the Congress has an opportunity to do that they haven't done up to now. ... Their failure to address the No. 1 issue in America, the jobs issue, is akin to the captain of the Concordia jumping off the ship before the passengers had been rescued. This Congress needs to get back on that ship and do their job."

I have to admit that I agree with these mayors that our highway system has been seriously neglected over the past few decades. Some states do an admirable job keeping their roads in good shape but they have to struggle to do it, sometimes sacrificing other infrastructure programs to keep the roads open.

But there's something I must point out that the mayors have conveniently forgotten: the ~$800 billion stimulus package put forth by President Obama in 2009. If every penny of that money had gone to fixing roads and other infrastructure they wouldn't have had to try to cajole Congress into dealing with the issue now. We would be almost 3 years into the 10 year rebuilding effort and plenty of people presently unemployed would be working. But no one mentions that out of the entire stimulus package less than 10% went to infrastructure, and not just roads. The rest of the stimulus went to expanding government and lining the pockets of Obama supporters.

Do we really want Congress to drop another trillion dollars on projects that won't do anything but waste taxpayer dollars we don't really have? If we're going to drop a bundle of tax money on roads, then the appropriations will need to be specifically targeted to each state and limited to use on roads only. No "bridges to nowhere", no side projects that have nothing to do with improving roads, and provisions to do away with the Bacon-Davis Act restrictions (saving tons of money in the process).

It seems yet another EU country is reconsidering its reliance upon the euro. This time around, it's France.

Not that France's economy was all that great before they switched from the franc to the euro. The issues with the euro has merely made it worse.

The French have growing reservations about the euro: 36% want to withdraw from the eurozone and go back to the franc, the old national currency; 4% have no opinion, which means that they don't warmly support the single European currency; 44% say it is a handicap in the present context of a world economic crisis; 45% say it doesn't serve the national interests of France; and a staggering 62% say it is damaging the average French family's standards of living and purchasing power.

With the economies of Portugal, Ireland, Italy, Greece, and Spain teetering on the edge due to steep sovereign debt with little means of paying it off. These nations are depending upon the rest of the EU and the IMF to bail them out even though some of them haven't managed to trim their government spending to sustainable levels. A bailout will only delay the inevitable, not prevent it.

As Cap'n Teach reminds us, no good deed goes unpunished. And so it is in regards to one of the biggest unintended consequences of more high fuel efficiency vehicles hitting the roads: dropping revenues from fuel taxes.

Another thing driving decreasing fuel consumption and fuel tax revenues is high fuel prices. This one-two punch has left both the federal and state governments scrambling to raise funds needed for road maintenance and construction.

So what is government to do about the revenue shortfall? Believe it or not, a per-mile tax is in the offing. No one has explained much about how it's going to work other than it will likely use GPS technology to track the miles driven by each vehicle.

Basically I have no problem with such a thing as long as the system only keeps track of the miles driven and not the routes taken or locations visited (the technology is easily modified to allow miles-only readouts). It smacks too much of Big Brother keeping track of where we go and when, something most of us feel uncomfortable about. There are already constitutionality questions about law enforcement using GPS trackers on suspects without warrants. This goes an order of magnitude beyond that.

Some don't like the idea at all, seeing as it means they'll be billed directly and in the open for their use of roads rather than the hidden fees they pay at the gas pump. Again I have no problem with this as long as the per-mile taxes lead to abolition of fuel taxes as they are applied now. Otherwise, no deal.

It is said the truly smart will learn from the harsh lessons of others' failures. I can say that one member of the WP clan is that smart, that being the youngest of the WP sisters. (As she says, she made her own mistakes while growing up that our parents never found out about.)

It would be great if the political class presently ruling the US was as smart as my youngest sister. Unfortunately they are not.

They see the economic meltdown occurring in the Euro-zone, yet refuse to learn the lessons countries like Portugal, Ireland, Italy, Greece, and Spain are teaching us, the primary one being that eventually you will run out of other people's money to fund all the wonderful social programs that have been used to bribe the electorate.

Italy is the latest to teeter on the brink of insolvency, and should it go over the edge it is quite likely it will pull the rest of the Euro-zone with it. Greece's default damaged the European economy yet it has only a fraction of the GDP of Italy. Should Italy default Europe will take an additional $2 trillion hit it cannot afford. Is it any wonder Germany is considering abandoning the Euro and going back to the mark? Can anyone deny that this problem has been driving the British public to demand a referendum about whether or not to remain in the EU? At least those two countries see the problem and realize they'll have to bankrupt themselves in a doomed effort to prop up economic policies from Brussels.

But too many of our own politicians at the state and federal level, regardless of party, seem oblivious to the fact that unless we make some drastic changes in how our federal government taxes and spends we will be headed down the same path. Labor leaders ignore the fact that neither businesses or taxpayers are a bottomless source of funds, shortchanging their own members by making promises no one can keep.

Should the US fail to put its financial/economic house in order, and right quick, it will pull the world economy down with it into a depression unlike any we've seen before.

Many reasons have been put forward to explain California's expanding fiscal disaster. Many have pointed to the California Assembly, a string of spendthrift governors, mandated spending due to voter initiatives, public employee unions, and, believe it or not, air pollution. But it all boils down to hubris.

But one of the biggest reasons has to be the the exploding and unsustainable level of spending at the local level, where safety services (police and fire departments) and the educational systems took up bigger and bigger portions of town and city budgets, particularly when it came to entitlements like pensions. It finally reached a breaking point when the national and state economies went into deep recession and tax revenues turned from a torrent to a trickle.

From 2002 to 2008, the states had piled up debts right alongside their citizens': their level of indebtedness, as a group, had almost doubled, and state spending had grown by two-thirds. In that time they had also systematically underfunded their pension plans and other future liabilities by a total of nearly $1.5 trillion. In response, perhaps, the pension money that they had set aside was invested in ever riskier assets. In 1980 only 23 percent of state pension money had been invested in the stock market; by 2008 the number had risen to 60 percent. To top it off, these pension funds were pretty much all assuming they could earn 8 percent on the money they had to invest, at a time when the Federal Reserve was promising to keep interest rates at zero. Toss in underfunded health-care plans, a reduction in federal dollars available to the states, and the depression in tax revenues caused by a soft economy, and you were looking at multi-trillion-dollar holes that could be dealt with in only one of two ways: massive cutbacks in public services or a default--or both. Whitney thought default unlikely, at least at the state level, because the state could bleed the cities of money to pay off its bonds. The cities were where the pain would be felt most intensely. "The scary thing about state treasurers," she said, "is that they don't know the financial situation in their own municipalities."

So demands from the state also added to the economic troubles facing the municipalities at a time when they had no spare funds to expend, adding an even greater burden on them and on the taxpayers supporting them. Another issue that hurt was the collapse of housing prices, meaning property tax revenues would oscillating, but with a downward trend, as tax rates fell behind the change in property values. Some property owners just stopped paying their taxes as they had no means of paying them or their mortgages as they saw their jobs disappear, and with them, their incomes. It was a "perfect storm" of economic problems that drove the municipalities and the state towards the fiscal brink. In California it was even worse because it is so dependent upon income taxes, one of the most volatile of taxes. Very high sales taxes also added to the burden, driving many people to cut back on their discretionary spending in an effort to keep their families clothed, housed, and fed. Revenues plunged even farther.

But California, at all levels, didn't seem to be willing or able to do the one thing that might have helped make ends meet - cut spending. We certainly haven't seen it at the state level, with the California Assembly making a lot of noise about cutting spending, but increasing it and a number of taxes at a time when neither will solve the problem.

And so the path to fiscal destruction is becoming steeper and the juggernaut that is default is picking up momentum. It seems such an unfitting end to a state that once held so much promise.

I sacrificed otherwise useful time and watched the President's speech to a joint session of Congress. Did I hear anything unexpected? Not really, except for...

"...pass this bill right away."

Claims that everything in his plan would be paid for rang hollow, particularly when he explained where the money would come from: thin air. The so-called "savings" from the debt-reduction boondoggle, really a reduction in the amount of money the government was going to spend that it didn't have, can in no way be considered as a means of paying for the American Jobs Act.

Unfortunately his speech sounded more like a campaign speech than a policy speech, slamming Congressional Republicans for being obstructionist. I think I would be obstructionist too if I knew the 'plan' the President has put forward won't work and will cost too much. (I think Obama defines 'obstructionist' as Republicans who won't do what he tells them to do.)

One thing that clued me in that Obama really doesn't understand why businesses hire was his plan to reduce taxes on small businesses, one cut mentioned being payroll taxes paid by employers, citing the tax reductions as a means to induce businesses to hire more employees. But businesses don't hire employees to get a tax break that won't cover the cost of hiring. Businesses hire when they need more people to meet increased demand for goods or services, period.

While I agreed with him that our infrastructure needs a serious overhaul, I believe it's too little too late. Stimulus 1.0 should have put almost all $878 billion towards infrastructure improvements, not the measly $55 billion actually spent on it. Stimulus 2.0 will be throwing more money we don't have after the original money we didn't have and I think it will have an even smaller effect, except for expanding the deficit.

On more than one occasion he made mention of fairness and fair play. Unfortunately I think his definition of those terms is far different from just about everyone else's. It has nothing to do with equal opportunity and everything to do with equal outcome. Unfortunately he will get his equal outcome if he gets his way, all of it bad.

I think it's about time I start drinking heavily....

One of the things said about blogging is that bloggers shouldn't apologize for not blogging. Normally I would agree with that, but not this time.

It isn't that I haven't had anything to write about (quite the contrary). It isn't that I've lost interest (I haven't). It's merely that life has intruded, leaving me with far less time to write anything worthwhile.

Over the past couple of weeks or so I have been getting home late, usually from some kind of meeting of a town committee or board, though once because I had to make an unexpected trip to the WP In-Laws to pick up BeezleBub and we didn't get back until 10:30PM. At that point I was just too darned tired to do anything but go to bed.

It's been these little things that have contributed to my lack of posting anything inciteful, witty, or outright offensive (at least offensive to the Left). I've resorted to borrowing heavily from humorous e-mails or Facebook postings to make sure this blog stays active. I'm going to have to do that one more time as I had yet another late evening. But at least this is educational in that it makes our nations' fiscal problem a little easier to understand.

Received via e-mail:

Federal Budget 101

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000

Federal budget: $3,820,000,000,000

New debt: $ 1,650,000,000,000

National debt: $14,271,000,000,000

Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

Total annual income for the Jones family: $21,700

Amount of money the Jones family spent: $38,200  

Amount of new debt added to the credit card: $16,500  

Outstanding balance on the credit card: $142,710

Amount cut from the budget: $385

So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending? 

It is a start, although hardly a solution. 

Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt). 

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress. 

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state. 

To effect budget change, we need to change the job description and give Congress new marching orders. 

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now. 

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab. 

Yup. I'd say the above pretty much explains it in terms we can all understand.

The irony of this? I received this by way of the very liberal parent of a friend of mine. It's a shame she hasn't been able to integrate this little bit of education into her view.

This rant by a small business CEO tells it like it is, something the folks inside the Beltway no longer seem to understand. Do they really think "incentives" to hire will induce business to hire anyone? Businesses hire only when they need more people, not because the government provides some kind of lame incentive to do so.


If the government really wants to give businesses an incentive to hire, then maybe it should get the hell out of the way. Maybe government should stop sucking so much money out of the economy that there's less available to invest or to buy goods and services that create the demand for more jobs. Maybe rogue government agencies should be reined in before they do irreparable damage to the businesses that actually create the jobs.

Over the past year and a half I've listened to a large number of people disparaging the Tea party movement. Most of them have been card-carrying Democrats (or at least those with the belief they know how to spend my money better than I do). Others have been RINOs or part of the so-called "Establishment" Republicans.

The Tea party has been excoriated in the press, with the New York Times, the Washington Post, and a number of other media organs of the Left leading the way. Washington politicians and other Beltway insiders have derided the Tea party as "hobbits", "terrorists", "Nazis", "racists", "jack-booted thugs", and a whole host of other derogatory labels.

As the volume of hateful rhetoric aimed at the Tea party and its supporters has increased, it has made me and others realize that the groups making these accusations must be really getting nervous. As one commenter to this piece wrote, "If you're getting a lot of [flak], you must be over the target." And so it must be as the Tea party gains supporters throughout the country at a local, state, and national level because they're tired of being ignored by the Coastal elite and the Beltway intellectuals.

My most memorable run in with an unabashed Tea party hater took place at our business when one of our customers went on a rant about "those goddamn Tea partiers wanting to take everything away from us!" There was no way I could not respond, so I asked her where she'd gotten that idea. Apparently she'd read it in the paper, in this case the Boston Globe. (One must remember, the Globe is owned by the NYT and has the same editorial policies as its parent corporation.) I calmly informed her that if her opinion was based solely on what she'd read in the Globe, then she'd been misinformed and lied to. She saw the Tea party as a bunch of religious fundamentalists bent on depriving the poor, doing away with Social Security and Medicare, and undoing decades of civil rights advances. I had to remind her that many of the civil rights advances came from the GOP, not her sainted Democrats. I reminded her the KKK were primarily Southern Democrats, not Republicans. I reminded her it was the Democrats who started us down this path of unsustainable spending going all the way back to FDR. I reminded her that it was LBJ who decided his Great Society was the answer to all of our society's problems, that it had failed miserably, and that it was funded by stealing from the Social Security trust fund.. I reminder her it was the Democrat majorities in Congress going back to 2007 that multiplied the annual deficits to many times that of all of Dubya's deficits combined.

I gave her the URL for the Contract From America website which explains the Tea party platform, none of which deals with social issues she claims the Tea party is involved with. She wasn't interested. Instead she chose willful ignorance and adherence to libelous propaganda from those who do not have her best interests at heart.

Maybe she will care when the country is unable to pay its bills and all of the government support she is 'owed' ends because there's no money left to pay for it all. Maybe she will care when all "the rich" she's constantly complaining about are either driven into bankruptcy or flee with their wealth to friendly climes and no one is left to pay for everything she is owed.

But I'm not holding my breath.

UPDATE:It appears Senator John Kerry has decided to add fuel to the fire by expressing his opinion that the media should not give equal time to those "absolutely absurd notions" voiced by the Tea Party because their opinions "are not factual."

What a putz.

It's no secret I'm a fan of Ayn Rand's Fountainhead and Atlas Shrugged. In both I've seen far too many parallels to what's been happening in our country, particularly since 2007.

The seeds for our self-destruction were laid a long time ago and now, in some places, are bearing fruit. All one needs to do is look at the state of Illinois and the city of Detroit. Both illustrate exactly what Rand wrote about over 50 years ago.

As Dan Mitchell explains, plans for a number of Detroit neighborhoods outlined in a CNBC report sounded familiar.

But there was also something about this story that rang a bell. It took a few minutes, since I'm getting old and decrepit, but then I realized that "blighted areas" was an eerily familiar term. Didn't Ayn Rand use that term in one of her books?

Indeed, she did. Thanks to the miracle of Google Books, here is one of several passages in Atlas Shrugged that references Detroit--oops, I mean "blighted areas":

No railroad was mentioned by name in the speeches that preceded the voting. The speeches dealt only with the public welfare. It was said that while the public welfare was threatened by shortages of transportation, railroads were destroying each other through vicious competition, on "the brutal policy of dog-eat-dog." While there existed blighted areas where rail service had been discontinued, there existed at the same time large regions where two or more railroads were competing for a traffic barely sufficient for one. It was said that there were great opportunities for younger railroads in the blighted areas. While it was true that such areas offered little economic incentive at present, a public-spirited railroad, it was said, would undertake to provide transportation for the struggling inhabitants, since the prime purpose of a railroad was public service, not profit.

Fifty years ago, the book was viewed as a dystopian fantasy. Today, Greece, Illinois, and Detroit are making Ayn Rand seem like a prophet.

When I reread Atlas Shrugged a couple of years ago, the hairs on the back of my neck rose. Everything Rand had created in her novel was happening at that moment. (I have to admit I had little appreciation for the book when I read it the first time over 35 years ago. I guess history gives one a little more perspective.) Many of our present day "betters" are characters right out of the novel. What makes matters worse is that their ignorance of how the economy works is not so much a lack of exposure to it so much as willful ignorance on their part. They don't want to know how things work in the real world because they know better how to remake things into their version of utopia. Too bad they're wrong because their version of utopia is hell on earth for everyone else.

As mentioned earlier, all we have to do is look to Detroit to see how well that's all worked out. There are plenty of other examples of this just in the US alone, like Newark and Jersey City in New Jersey, and Gary, Indiana. If you need larger examples then states like Illinois, Michigan, New Jersey, and California should suffice. All are suffering under decades of enlightened rule by our betters (though New Jersey has a glimmer of hope in the form of Governor Chris Christie). If that isn't enough for you then look to Greece and Portugal to see how things have worked out there.

We see example after example after example of how our supposed "betters" are no such thing, being no better than what Rand called "looters" in Atlas Shrugged, for that's what they are.

The pols in Washington are still going at it hammer and thongs, and after weeks of debate and rhetoric they have been unable to come up with a workable compromise about the debt ceiling, out of control government spending, and a push to raise taxes.

But a group of five ordinary citizens were able to work out how to solve the problem in only an hour.


It seems to me we've been looking in the wrong place to find the answers needed to fix this problem. Some will claim their solutions are overly simplistic and overlook the nuances and complexities of the problem. But that is the problem. Those 'nuances and complexities' are what make it seem impossible to solve the problems. The folks in Washington tend to forget that no matter what they do, someone somewhere is going to be inconvenienced or hurt. The trick is that maybe we have to ignore that situation or any solution will be impossible. And then everyone will be hurt, possibly to a level not seen since the Great Depression. That is no solution.

What say you?

If we want to save billions of taxpayer dollars, stop the negative effects of government interfering with market forces, and let food prices seek their own level, then maybe it's time to get farmers off the federal dole.

While some may decry such an action as being against the interests of small family farms, those same folks speaking out against such cuts don't understand that it isn't the small family farms receiving the benefits of the government subsidies and tax breaks, but the large agribusiness corporations. They don't need those subsidies and shouldn't be receiving them because in the long run all they do is raise food prices (and the taxes keeping them there) to the detriment of everyone else, including the small farmers.

Government subsidies obviously aren't necessary for food production: people have fed themselves and traded their surpluses for thousands of years. The system doesn't help consumers. Reducing supplies and imposing price floors obviously are bad deals for the hungry. Paying off farmers might lower some prices, but steals back through taxes any benefits received by consumers. Agricultural subsidies are designed by farmers for farmers.

But which farmers? Not the idyllic family farmer. The majority of payments go to farms with average annual revenue exceeding $200,000 and net worth around $2 million.

Many of the subsidies date back to the Depression and the reasons for them no longer exist, but here we are seventy years later and we're still paying for them.

Before anyone gets on their high horse about saving the American farm, we should look at what happened when another country eliminated farm subsidies, in this case, New Zealand.

In 1984, New Zealand's Labor government ended all farm subsidies, which then consisted of 30 separate production payments and export incentives -- a striking action given that New Zealand was five times more dependent on farming than the U.S. economy.

A report from [2001] from the country's main farmers' group, the Federated Farmers of New Zealand, documents what happened:

While land prices initially fell after reform, by 1994 they had rebounded and remain high today.

The predicted farm bankruptcies never materialized -- with just 1 percent of farmers going out of business.

The value of farm output soared 40 percent in constant dollar terms since the mid-1980s and agriculture's share of national output rose from 14 percent to 17 percent today.

Since subsidies were removed, productivity in the sector has risen 6 percent annually -- compared with just 1 percent before reform.

New Zealand's farmers have competed successfully in world markets against subsidized producers in much of the rest of the world.

Can anyone successfully argue that we shouldn't do the same thing, and quite likely, see exactly the same results? Oh, I'm sure someone will try, particularly the folks from the "corporate farm" lobby. But maybe it's time we wean these folks off the government teat and let them succeed or fail on their own rather than allowing them to continue dipping into the taxpayer's wallets.

I must admit to being on the edge of Debt Crisis Fatigue after being bombarded by Obama, the Democrats, and the media for months on end about our impending doom if Congress doesn't pass an increase in the already outrageous debt limit.

I might not have nearly as much of a problem with Congress doing so if the Spender-In-Chief were willing to support spending cuts equal to the increase in the limit, but we all know there's no way he'll do that.

In truth, I don't like the idea of raising the debt limit even one penny. History shows us the promises made by Congress to cut spending if only the debt limit is raised have never been kept. All we've ever seen from such promises is more taxes and more spending. The promises made aren't any more real than the old "The check's in the mail" dodge, except that we're talking trillions of dollars, a number that doesn't seem to faze Obama or Congressional Democrats, but scares the bejeezus out of just about everyone else.

It's ironic, considering that many of the same people pushing for increasing the debt limit were vehemently against it the last time the issue came up. The difference this time around? Last time it was a Republican in the White House while this time it's a Democrat, and he's asking for an increase that is far greater than the last one.

Talk about a double standard.

If the President and his Democrat cronies won't control their insatiable appetite for running up the national credit card, particularly if they're not the ones who will have to pay the bill, then it's up to the GOP and the Tea Party to do it form them. Better it be done now than when it will be so painful that it brings the economy down even more than it already is. Obama and the Dems aren't willing to admit that the credit card company (that means us, folks) aren't willing to raise their credit limit until they pay off what they've already charged. Until then it will have to be as so many of we so-called "little people" do under these circumstances - pay cash, or do without.

The national credit card is maxed out and the issuers - We The People - are saying "Enough!"

The ongoing disagreement between Congressional leaders and the President about the debt limit, taxes, and spending is showing the American people more than they wanted to see. To me this means far too many of the Democrats still seem to think we can fix the the deficit problem by spending even more money we don't have and can't pay back even if they make "the rich" pay their "fair share" in taxes, and the President acting like a spoiled and petulant child, placing all the blame for the outcome of his ill-advised and fiscally disastrous policies on the GOP because they don't or won't recognize his genius.

As much as the Democrats and the media try to spin it, the Democrats are about to reap what they've sown, namely a seriously broken financial system and the enmity of a large majority of the American people, particularly those in flyover country.

One commenter to a previously linked WSJ piece has proposed a solution to the spending problem with deep cuts for agencies and programs that manage to do nothing but waste billions of taxpayer dollars and create misery for far too many of the people they say they're helping.

Here we go. A quick way to save a few bucks.

2011 Budget Line items to consider - spending at the federal level, independent of state spending:

$129.8 Billion Education (why is the federal government involved in this?) - Zero out

$495 Billion Welfare (that's charity, right? Is this an enumerated power at the federal level or is it a state power? My take is I didn't see a charity power and Grover Cleveland agreed with me.

Grover Cleveland veto statement when vetoing charity to help Texas farmers:

"I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the government, the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."

-zero out.

--snip--

$22.7 billion Fuel and energy (as in Ethanol?) Why does energy need a subsidy, it's suppose to provide the value, not absorb it? - Zero out.

There's plenty more, so I suggest you Read The Whole Thing. While I don't agree with every point brought up, I can live with these proposed cuts as compared to some of those proposed within Congress.

It's gotten to the point where President Obama resembles one of those romantic swains who does not understand that "no" means "no", or in this case "Hell no!"

We have an economy that is still foundering due to job-killing regulations made by rogue bureaucracies, job-killing legislation by Congress, bailouts to commercial and financial institutions that don't deserve them, and a government spending spree that looks more like a teenager running around using daddy's credit card. But the 'teenager' doesn't understand that the credit card has reached its limit. What's worse is that he wants the credit card issuer (i.e. the taxpayers) to pony up even more credit to keep spending money he doesn't have and can never pay back. When he doesn't get his way he throws a tantrum, blaming the over-the-limit credit card he used on those no longer willing to have their pockets picked by an ungrateful and willful child.

Try as he might, I don't think Obama's going to get away with painting the GOP as the cause of the upcoming default on August 2^nd. The Republicans are standing their ground, not willing to give the President a pass by reneging on their campaign promises and raising the debt limit in return for 'future' spending cuts. All one needs to do is look how such promises made by Democrats in the past all fell by the wayside once they got their way to see how foolish trusting them again would be.

On top of that, the President wants to impose an additional $1 trillion in taxes on top of those he's already added to pay for it all. (We all know that theoretical extra revenue will not be used to pay down the debt, but will instead be spent on stupid and foolish things we don't need, want, or can afford.) That's all we need is to have yet another $1 trillion in capital removed from the economy, money that otherwise would be used to expand businesses, create jobs, and expand the tax base. Neither the President or Congressional Democrats see that every action they have taken over the past 4 years has narrowed the tax base, increased uncertainties in the business world which in turn has discouraged investment and hiring, and stretched out a painful recession and the resulting high unemployment/underemployment an additional 2 years with who knows how many more to follow.

What part of "Enough! Not one red cent more!" does the President fail to understand?

All of it, apparently.

Is it just me or is the state of California doing everything it can to ensure its total financial collapse will take place? Nope, it isn't me.

It seems every measure the California legislature is taking will have the effect of increasing support of the state employees unions pay, benefits, and pensions while increasing the burden on the taxpayers, or decreasing its already falling tax revenues, or both.

The latest stupid, rent-seeking action? Shutting down Amazon's Associate program in California by trying to force Amazon to collect California sales taxes (even though the move is illegal). The amount of sales taxes collected by this move? Zero The estimated amount of income tax revenues lost with the shutdown of the Amazon program? $151 million.

As Bill Quick, a now former Amazon Associate, writes:

Did I mention that these people are leftists, greedheads, and wreckers? Let me add that they are also corrupt bribe-takers on a massive scale. They pushed this law through, and are more than happy to see the Amazon Associates program permanently shut down, because that is the goal the real backers of this law were after in the first place. It has nothing to do with sales tax collections. It is, in its entirety, designed to use the government as a club to shut down Amazon's Associate Program in the biggest states in the country.

How so?

Big companies like Wal-Mart, (an out of state corporations itself) who have associate programs that are much less effective at driving sales than the Amazon Associate program is, can't handle that competition head on by beefing up their own programs. Or at least they don't want to. So what these sponsors were really after was not to collect additional sales tax for California, but to shut down the competition in the state. They got what they wanted. The politicians behind this bill will get what they want - more money and support (bribes) from companies like Wal-Mart. And the state will get nothing, in fact, will lose money.

But of course the big drive now is to somehow make Amazon the villain in all this. And too many people are buying the propaganda. Sad.

So while the aim of the legislation appeared to be to collect sales taxes, it was really a rent-seeking move by Amazon's competition? This sounds a little paranoid. But unfortunately, it is likely true. There's certainly enough precedent for such a move, and we've seen it at the federal level, particularly since "The One" Term Wonder took up residence at 1600 Pennsylvania Avenue.

Should this type of shenanigans continue in the Golden State, the motivation for businesses and residents to leave California will rise and the stream of businesses and workers already leaving will turn into a flood. That ought to help the state's bottom line. NOT.

As we move closer to 2012, it has become increasingly apparent to those not previously cognizant that President Obama is, to put it in terms everyone can understand, an economic moron. Part of this lack of understanding can be laid at his upbringing and lack of a real-world education.

Between his parents, step parent, grandparents, and his pastor of 20 years, he was fed a continuous diet of anti-Americanism. We have no idea what he really learned in school, particularly at college (his transcripts are sealed). While speaking about bringing people together, his actions have done nothing but divided them. This is particularly true when it comes to economics, where it appears he's pulling his 'fixes' out of the past, with liberal doses of Marxist economic theory blended with the worst of the failed economic policies of FDR and Jimmy Carter. He really doesn't see why his efforts to fix the economy have failed or why his popularity has fallen so precipitously. Could it be because he's in over his head, being so ill-prepared and undereducated in how things really work?

That certainly seems to be the case, particularly in light of his most recent presser where he engaged in "false choices and demagoguery" rather than offering solid proposals. He talks about reaching a compromise with the Republican members of the House, but I get the feeling he's still defining compromise as "Sit down, shut up, and vote the way I tell you to vote." That hasn't worked since the Democrat takeover of the House and Senate back in 2006, and is less likely to work today since the GOP retook the House last fall.

All any of this shows us is that he really doesn't get it, doesn't understand how the economy works, and isn't interested in learning how it works. Instead he wants the economy to bend to his will. Unfortunately he will learn, as did King Canute, that the economy won't listen to him. The more he tries to bend it to his will, the worst it will get and the more those who actually drive the economy will rebel, just as they have to date. All he will do is to motivate even more people to "go Galt", driving more of the economic activity underground and away from the prying eyes of The One Term Wonder.

I've just returned from an exercise in small town democracy.

While most of our town's deliberations and voting on spending for municipal functions and education take place in February and March, an education issue going back to the March voting has come to a head and our school board decided it had to meet this head on rather than continuing an ongoing fight in the local papers, with heated point/counterpoint letters to the editor creating some of the best local gossip seen around here in some time.

It all came down to what is called a petition warrant article, in this case dealing with one specific petition warrant article that was aimed at eliminating an administrative position the petitioners believed was never authorized when our school district broke away from a larger school administrative unit (or SAU) 13 years ago. The warrant article passed by a 2 to 1 margin, but the school board ignored it, claiming it was "advisory only." That didn't sit well with a lot of folks in our town.

On top of that, the school board announced the day before the vote in March that they had hired a replacement to fill administrative position being vacated due to the retirement of the person occupying that position. Quite a few people saw that as a slap in the face, taking it as arrogance on the part of board by flaunting their decision ahead of the vote as if to say "We don't care what you want, we going to do it our way."

But was it arrogance? Or was it poor timing on their part? It doesn't matter, the reason being that perception is reality. (If the voters see it as arrogance then it is arrogance, motives not withstanding.)

A lot of people showed up for this 'special' school board meeting, held at the our high school auditorium, and a lot of people spoke up, not pleased with the way the board handled the matter. There had been a lot of name calling in the letters to the editor published in our two local papers. Some of the anger displayed in those letters was evident at the meeting as person after person took the opportunity to address their comments and questions to the board. There was plenty of fancy footwork (figuratively speaking) displayed by the board and the school district's attorney. A lot of people left the meeting feeling nothing had been accomplished.

Some questions did get answered. The one I asked dealt with what criteria is used to determine whether a petition warrant article is advisory or binding. (If the petition deals with a specific action, such as adding or cutting funding for a specific purpose, such as a job or activity within the town or school district, then it's binding. If it doesn't address a specific action, then it's advisory.)

One thing is certain, the people got involved in how our school board is performing its function. Another thing that's certain is that a number of school board members will be seeing some serious competition come the next election in March.

And so it goes in small town New Hampshire.

For anyone who's been paying attention for even the past 6 months, it's obvious that our country has a major problem: debt.

While this is not a new problem, it is the magnitude of our national debt that has become quite worrisome. On top of that we have a Congress (or at least one chamber of Congress) that seems incapable of dealing with this problem. Rather than dealing with it, they seem fine with staying the course they set over four years ago. It doesn't help that the President seems hellbent on allowing them to continue their profligate ways, all while trying to stymie the Republican opposition trying to deal with it buy doing what needs to be done.

While the Democrats are convinced this country has a major revenue problem, just about everyone else knows what we have is a spending problem, and that we've managed to dig what John Stossel is calling The Money Hole.

While part of Congress and the President seem unwilling to do something to fix the problem, there are a number of other chief executives at the state level who have similar problems and met them head on. One in particular stands above all the others.

Some governors have shown the way. You know about Chris Christie, Scott Walker, Rick Scott, John Kasich, etc. But you probably don't know about Luis Fortuno.

Fortuno is governor of Puerto Rico. Two years ago, he fired 17,000 government workers. No state governor did anything like that. He cut spending much more than Walker did in Wisconsin. In return, thousands of union members demonstrated against Fortuno for days. They clashed with police. They called him a fascist. (Gee, that seems to be the accusuation du jour, as a union leader called Chris Christie a Nazi, too. -ed.)

Fortuno said he had to make the cuts because Puerto Rico's economy was a mess.

"Not just a mess. We didn't have enough money to meet our first payroll."

Fortuno's predecessors had grown Puerto Rico's government to the point that the state employed one out of every three workers. By the time he was elected, Puerto Rico was broke. So the new conservative majority, the first in Puerto Rico in 40 years, shrank the government.

What did Fortuno cut? Believe it or not, everything, including his own salary. Nothing was immune from his budget ax. As he said, raising taxes wasn't going to happen because they were already too high. And he didn't waste time doing it, either.

Fortuno's advice for leaders who want to shrink the state: "Do what you need to do quickly, swiftly, like when you take off a Band-Aid. Just do it. And move on to better things."

The longer the delay, the less likely it will get done to the level needed in order to turn things around.

Many of our states are in a similar bind.

Governor Chris Christie of New Jersey has been fighting this battle from the day he took office. And while he hasn't been gentle in dealing with the Garden State's abysmal financial conditions, he has been straightforward dealing with them. He hasn't pulled punches. He hasn't apologized. And he hasn't taken crap from state employees or teachers who feel they are entitled to plunder New Jersey taxpayer's wallets. He's told it like it is and the taxpayers of New Jersey appear to like what he's been saying.

My home state of New Hampshire, while not in the dire financial straits seen in New Jersey, California, Michigan, and a whole host of other states, has still had to deal with the aftereffects of a four year spending spree by legislative Democrats that started in 2007.

Normally a frugal state, New Hampshire legislative Democrats and the governor opened up the floodgates for state spending, increasing the state budget by over 30% in four years. The only problem was that they used overly optimistic revenue projections to justify it. Their projections were wrong and they left the state with an $800 million+ deficit, something illegal under the state constitution. They attempted to plug the deficit by boosting business taxes during a deep recession and seizing surplus funds from a state-chartered (but not state-funded) medical malpractice insurance agency, just to name two instances where they tried to use un-New Hampshire-like tactics to refill state coffers. Both failed, the first when voters revolted and threw the Democrats out, and the second when malpractice policyholders sued the state in court and won a decision that banned it from 'appropriating' private funds to which the it had no claim.

This year the Republican-dominated legislature cut the budget by 10%, though the Democrat governor may veto it as it stands. (The GOP has a supermajority, meaning they can override the veto should the governor do so.)

It's not just the states that have had to bite the bullet to fix government overspending.

Our neighbor to the north found itself in a similar position to where we are today, but they didn't hesitate when it came time to put their financial house in order.

When I think Canada, I think big government. I'm embarrassed that I didn't know that in the mid-'90s, Canada shrank its government. It had to. Its debt level was as bad as ours is today, almost 70 percent of the economy. Canada's finance minister said: "We are in debt up to our eyeballs. That can't be sustained."

--snip--

The problem, he added, was that Canada had a government safety net that was more like a hammock.

So in 1995 Canadian leaders cut unemployment benefits and other programs. It happened quietly because it was a liberal government, and liberals didn't want to criticize their own. The result was that Canada's debt stopped increasing. As the government ran budget surpluses, the debt went down.

--snip--

Canada fired government workers, but unemployment didn't increase. In fact, it fell from 12 percent to 6 percent. Canadian unemployment is still well below ours. And the Canadian dollar rose from just 72 American cents to $1.02 today.

That means that laid off government workers got new jobs elsewhere and became productive citizens rather than a drain on the taxpayer's wallets and the Canadian economy. Isn't it likely the same thing will happen here as well? Or are our gummint employees only competent enough to work for the government? (Unfortunately that might indeed be the case, as sad as that sounds.)

So the question is whether or not Congress will tackle the fiscal mess they helped create? Or will they continue along the path of least resistance (and the least amount of work) and not address the problem until they have no other choice, like when we're coming after them with pitchforks, torches, and a lot of rope?

As a comment made to a link within my previous post, this little "thought experiment" in regards to taxation puts the effects of taxes on businesses and individuals into easily understandable terms.

A thought experiment suggested by Mr. Rich Karlgaard writing for Forbes.

Imagine your tax rates for a week's work:

0% on Monday
25% on Tuesday
50% on Wednesday
75% on Thursday
100% on Friday

Would you work on Friday? Not many would.

Reading the comments following this one the consensus was that no one would work on Friday and quite a few would also forgo working on Thursday as well. One wouldn't even work past Tuesday because as he wrote "...I've received 70% of my potential net income for the week. I think I call it quits at that point and go fishing for the next five days."

As another commenter opined "No industry will even bother to open from Wed[nesday] to Friday."

This thought experiment is a perfect illustration how what seems to be a reasonable policy to those making it would have a devastating effect on the economy, with businesses closed for 4 or 5 days out of seven because they can't get anyone to work past the first two or three days. There's no incentive to do so. In fact, there's plenty of incentive not to. The theoretical policy makers overlooked one very important factor that would greatly change the outcome: human nature.

The tax policy in the experiment assumed everyone would work all 5 days of the week because it would be for the good of all. But it wouldn't happen because, quite frankly, we humans aren't all that altruistic. Once the disincentive to work outweighs the difficult-to-find altruism, people will stop working.

And so it is with the proposed changes in the tax code. All they will be is a big disincentive for a lot of people who would otherwise work hard and make more money. If the only thing they're going to get out of that hard work is even higher taxes and less take home pay, they won't bother putting in the effort. Why should they? After all they aren't really being compensated for all that extra effort and are, in fact, being punished for it. That's one hell of an incentive to keep their income to a level where they can pay their bills with a little bit left over, and screw the rest. In turn, the government won't raise the revenue they think they will and the economy will continue it's slide to the bottom.

One other thing the proposed high taxes will allow? It will grant those in Congress the power to grant favors by creating all kinds of loopholes and tax shelters for those who will support them in their bids for re-election.

But wait, isn't this where we came in, when tax rates in the past were very high but the effective tax rate was low for the top earners because of the thousands of favors and exemptions granted by Congress? It looks like it to me.