Is the Republican Party doomed to fall apart?

The Republican Party and the country are doomed if they do not wake up quickly. No I am not talking about their stance on social issues. I am talking about know what it means to be a True fiscal conservative. While it is clear most people don't want to get rid of the deficit by only raising taxes, a clear majority of Americans believe in a balanced approach.  All credible economists have said we can not balance the budget without a balanced approach. Cutting spending and raising revenue are the only way we can get our deficit under control. What will doom the Republican Party is their irresponsible pledge of no new taxes. Last poll I saw indicated almost 70% of Americans agreed with the idea of letting the Bush tax breaks for those making over $250,000 expire. This is not really raising taxes, it is just letting them go back to where they were the last time we had a balanced budget. It will happen anyway if congress does not act, so the Republicans really do not have a bargaining chip on this issue other than to threaten the destruction of our economy and blow up the deficit even more. A lot more damage to the economy will be done, not to mention the country and the Republican Party if they do not wake up on this issue. If Romney had just acknowledged this reality he would have won the election hands down.

Require the Presidential candidates to put forth a plan that actually has a chance of passing a divided congress.

Every one of the Republican candidate’s promises to cut taxes and cut the deficits, not one of them says how they will do it. The political will does not exist to make the cuts necessary to balance the budget without raising revenue. Congress already wants to back out of the automatic cuts they agreed to in order to get past the debt ceiling crisis they manufactured and they could not figure out a way to pay for the relatively small extension of the payroll tax cut.  It is not enough to say you are going to cut taxes and balance the budget. Neither party will have a super majority so we need to demand to see the plan that will actually pass both houses if we are going to allow them to making empty promises!

Congress and the Super Committee will fail unless we raise our voices.

It is time for the sensible people to stand up and be counted. The supper committee will fail unless we are heard. There are a lot of angry people on both the far left and far right. They both have some valid points. We have run up to much debt but we have also allowed to great of an imbalance in the distribution of wealth in our nation. Our problems were created over years and can not be solved simply or quickly. Getting us on the right track and correcting these imbalances will take hard work and co-operation. We swang to far right when the Republicans dropped the ball and squandered the first surplus we had in decades. The economy was in a shambles when this administration took over. Instead of concentrating on the Economy to much time was spent on the health care bill. People were upset and then we swang to far left in the next election putting the far right in control. They are more interested in shrinking the government at all cost than anything else, and this is hurting our economy even more.

Balancing the budget is a long term process. For all those arguing about the country’s fiscal problems it is all of our faults. Both the Democrats and Republicans are to blame. More importantly the voters, particularly the sensible voters in the middle that let the extreme elements take over. We need to stop these huge swings of the political pendulum and work together. Too many people dismiss the extreme elements as crazy and don’t think they can get their representatives elected. But they did. They are will organized and vote religiously. To the right if you really want a balanced budget look at the last time we had one. The Democrats were in control. (Clinton). Bush passed the tax cuts that go a long way toward contributing to the current mess. Revenue increases has to be part of the equation. Are accumulated deficit is not just a spending problem, it is also a cutting taxes problem. To the left, we can not give away unlimited social security, Medicare or welfare. There have to be limits and we as nation need to make tough choices and decide what those limits are. If you are not part of the solution you are part of the problem. You need to do more than post comments online. If you want to be part of the solution check out the pledge at http://truefiscalconservative.blogspot.com/p/pledges.html If we all sign the citizen pledge, it will force the politicians to sign the politician pledge and we the people will get the country back on the right track by forcing both sides to come together.

How the Wealthy actually benefit the most from a tax increase

There is this myth that we would be picking on the richest Americans if we raise their taxes a small percent. It is not worth spending much time on the illogical statement that if we increase their taxes three to five percent they may actually quit working and creating jobs. Really, does anyone in their right mind think they will walk away from a $1,000,000 dollars in revenue just because they have to pay another $50,000 in taxes! People do not understand percentages. While $50,000 is a lot of money to many Americans it is only 5 cents per dollar. How doe loosing one nickel for every dollar they make cause them to want to give up the rest of their money. They will not walk away from their millions just to spite the rest of the country. It is important to note that most wealthy American are currently paying less nickels per dollar in taxed per dollar than the average American. It is also true that they used to be taxed more than what is being asked of them today and they did not walk away or quit their jobs.

Now let’s look at how the rich benefit most from many services the government provides.

The government maintains roads and an interstate transit system (something lacking in a large portion of the world). The poor person that does not own a car benefits little from that system, the middle class person that drives to work or on vacation benefits, but the people and companies that own fleets of trucks and need the roads to get their goods to market benefit the most.

Likewise our government employs air traffic controllers and the Federal Aviation administration to keep our skies safe. The poor, that can not afford plane tickets, only benefit to the extent planes do not fall out of the sky and land on their heads, since they own no cars or homes. Middle class people benefit because it makes it easier to take vacations and visit family and friends. Rich people and companies with private jets or the need to get their employees and goods places quickly benefit the most.
While there are several examples I will end this post with the thing the wealthy benefit most from. It is a stable government leading to stable markets. When we have large losses in the markets due to the government’s inability to get our fiscal house in order it should be clear who is hurt the most, and conversely who benefits the most. If we don’t get our fiscal house in order those who have the most to loose will loose the most.  So when the stock market falls 50% the poor loose nothing because they own nothing. The middle class losses tens and sometimes hundreds of thousands of dollars in their retirement accounts. However, the wealthy and the corporations loose millions and billions. Even if they own their own companies and to not trade on the stock market they loose a lot of money if we fall into a depression. If no one is working then no one can buy their goods, and their factories stand idle. The rich can only get richer if there are people that have money to buy their products. This is why the wealthy people have a vested interest in making sure we have a stable government and put our fiscal house in order. Asking them to pay more to save them billions in economic losses does not seem like it is asking too much.

Does raising taxes on the Wealthiest Americans kill jobs?

This is an important question because it could be a defining issue in the next election. The most recent polls seem to indicate that over 70% of the population agrees with raising the tax rate on people making over $250,000 a year. There are many wealthy people that have also come out and said this is a good idea. So why are so many people not affected by the tax opposed to it?

Nobody likes taxes and most people agree we have a terrible system that needs to be fixed. But this debate centers around question does increasing taxes on the wealthiest American going to kill jobs?  We can not allow people to make claims that raising taxes on the wealthy kill jobs without forcing them to supply some facts and examples of just how many jobs it kills. The Republicans claim this in one line statements but never back it up with any evidence. If they have evidence they need to demonstrate how raising taxes on a professional athlete, pop star, or the CEO of a publicly traded company kill jobs. I do not see how taxing these people a couple of percent more will cause them to lay off people or drastically change their spending habits. Really, how may people do a professional athlete or pop star employ? Are they going to fire their agent of gofer because they have to pay a little more in taxes?

The people that make the claim that taxing the wealthy kills jobs like to fall back to the story of a small business owner, “Joe the Plumber.” Small business owners represent only a small fraction of the country’s richest people. Less than 7% of the population has over a million dollars and less then 10% make more than $250,000 a year. Most people that have more than a million dollars are not running small businesses. If they are running a business at all it is not small. That being said I still need someone to explain how raising the small business owner’s taxes kills jobs. Some people think if they say it often enough it is true and they do not have to prove it.

But let’s look at how a small business works. They are in business to make a profit, so they only hire people that are going to add to the profit of their company.  Let’s say all of the sudden they have pay another $6,000 in taxes. (I get this number by assuming a 3% increase in taxes on an additional income of $200,000 above the $250,000 that is not subject to the higher tax rate. This means the small business owner’s income would be at $450,000 putting him or her in the top 5% of all American wage earners.)  Now being in the top 5% clearly indicates he is in a better financial position then the majority of the country, which is fine. What I want to know is how does laying off one of his employees help him with his net income? Let’s say the total compensation cost of that employee is $60,000 but he produces $70,000 worth of revenue. (Remember if he was not producing more revenue than his salary he would not be working in the first place.) So how do you solve your $6,000 additional tax bill by loosing a $10,000 profit earned off the back of the employee?  If he fires the employee he will have $10,000 less in revenue but his taxes only go down $3,100. He now has $6,900 less in net income! The only way he avoids that is by assuming all that work himself (hard to believe since most small business owners already work 60 plus hour weeks) or he can pass the work on to his other employees, to whom he must pay overtime, eating into his profits. Anyway you look at it laying someone off does not help him with his $6,000 additional tax bill. Clearly the additional tax does affect how much he the owner will take home. So the real question is how much will this additional $6,000 in taxes affect his spending habits? Remember he is making $450,000 a year.

What really causes small and large business to lay people off is not having enough people to buy their products or services. The more people we can get back to work the more our economy can grow. Do not let people convince you that something is bad just because they say so. Don’t let them convince you with simple one liners. Ask the tough questions. Ask them to provide specific examples to back up their claims, that taxing the wealthy at the rates they used to be taxed when the economy was booming is a jobs killer. Make them provide logical well thought out answers instead of over used talking points
 

What would happen if Congress were to prepare breakfast together?

A simple analogy to the way congress is currently behaving is to imagine what would happen if they were given a couple of eggs to share for breakfast.

The Far left would want to make a huge omelet, spend more money and invite more people and turn it into a banquet. They would insist on having bacon because they really want to add pork to everything they do.

The Far Right would insist on giving one of the eggs to the rich, and want the other one poached. They want limited breakfast just like our founding fathers. They to would insist on Pork, but would want ham just to be different. They would not agree with anything their colleagues on the left wanted as part of the breakfast, even if it was something they used to like.

The Left would refuse to eat with the right. The Right would declare that they would rather not eat then eat with the left. Then they would crack the egos over each others heads and we would end with a mess.

Sound familiar?

Check out a video representation of a Congress making breakfast  

Does the Government need to create jobs?

This is an appropriate topic for Labor Day Weekend. This is an important holiday and we should all celebrate the American workers for the long hours they put in at their jobs. Their hard work and dedicated service is important to preserving our way of life. It is through their hard work that we prosper and grow as a nation. We should also take this time to consider all those Americans out of work that are earnestly looking for jobs.

As a True Fiscal Conservative I do not believe we can solve our long term financial problems unless we lower the unemployment rate. All True Fiscal Conservatives agree with this. We may differ on the best way to accomplish it, but everyone agrees we need to lower the unemployment rate.

People that believe the government should just stay out of the private sectors way and let them create all the jobs are being short sighted. They are not dealing with the reality we are currently facing. Corporations are sitting on a mountain of cash and making record profits. There is no incentive for them to change what they are doing. They are in business to make a profit and will and should act accordingly. The reason they are not hiring many people right now is because they can create all the product that is currently demanded with their existing work force. While they would love to sell more, so they can grow and hire more people, they are in chicken and the egg scenario. No company is going to put their profits at risk to kick start the economy.

Recessions are cyclical, they happen; it is a part of the capitalistic system. The government can and should mange them, to try and prevent them from developing into a more serious depression. While we need to look at ways to get rid of our long term accumulation of debt, that is a long term issue that will only become worse if we do not get more people back to work. In this scenario a jobs program is warranted. Any jobs program should be limited in duration and designed to get as many people back to work as quickly as possible.