Posts Tagged ‘economics

03
Jun
09

Federal Takeover of GM and Chrysler

Today I was pondering the possible implications of the Government’s ownership of two of this nation’s largest auto manufacturers. Part of having a realistic outlook on any situation is being able to see the possible long-term effects of a given decision. Unfortunately the Washington establishment can not learn this lesson. All they seem to care about is what works right now and screw the future effects.

First of all Obama has stated that the federal government (except when it comes to the “most important” decisions in the company) will stay out of the way of the new GM execs. I say, FAT CHANCE. Does this sound like the federal government to you? All citizens have been saying for decades is stay the heck out of our business yet the government encroachment on our lives has only grown. This is a pipe dream, Obama. Anytime the government is given an inch it will always, without fail, take a mile.

Second of all it has been promised that the $50 Billion in taxpayer dollars that has gone toward this effort will be paid back. That of course is another Obama pipe dream in itself. But this also means that the government (namely Obama because it could effect his political legacy) has a direct stake in making sure the new GM is a success. And with the U.S. Treasury backing him there is no limit to the money Obama could throw at the new GM. Our money.

And with the U.S. Treasury backing the new GM this means the company can undersell any other non-government-controlled company. And with political success hanging in the balance the government has motivation to see to it that it does. Imagine an America where Toyota, Honda, and other foreign auto makers have pulled out of the American market because they can not compete against “Government Motors.” And where domestic auto makers like Ford have been sunk for the same reason. Who will we buy cars from? Let that sink in.

I know God is in control. I am not afraid of what the future holds. I just can not understand which part of “obey the constraints of the Constitution” is so blasted hard to understand.

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24
Mar
09

So Obama’s Gonna Help Me Get an Auto Loan

I was just watching the President give a press conference about the stimulus package. One thing he said stood out to me among all the rhetoric. He said that part of the purpose of this package is to “help” banks (read: take over banks) to be able to loan money for autos and homes at affordable interest rates.

I wish that the President was a Smoak House reader. That way I could tell him that when the economy is down so are interest rates. I learned that in…hmmm, let’s see….Economics 101 in college. And that was at Macon State College. Obama attended Harvard!

Furthermore I would like to tell him that last week, during a recession, without his stimulus package I bought this brand new 2009 car…

Look, Ma! No Government Aid!

Look, Ma! No Government Aid!

…and I financed it for five years at an interest rate of 5%. Not bad for the good ol’ free market, eh?

This quote by Ronald Reagan has been trumpeted far and wide but I feel I must remind you of it:

“Government is not the solution to our problems. Government is the problem.”

ps: I sure wish I had voted for Ron Paul.

07
Feb
09

Look at Your W-2: See How Much You Really Have?

You read that right. I am going to say something good about the process of filing your tax return (“this oughta be good!”). There is one advantage to getting that W-2 in the mail—it means that you actually have a job. I thought I should lay down a few reasons to be thankful as we move into the tax season because now that I am starting my income tax return (which usually means I have to pay more money when all is said and done) some angry anti-tax posts can not be far behind. 

1. I consistently complain about my job. However I have heard of so many people who are unemployed. I know first hand that jobs are scarce because I have searched for new jobs and there just are not any that require my skill set and it sounds like many others are in the same predicament.  I am glad to be where I am. Heck! Right now it is good to be anywhere.

2. I consistently complain that I do not feel I get paid enough to justify having gone to college. I do not mean that I would have not gone, but somehow I think I deserve more. The truth is I make pretty dang good money considering what little I do know (did I just hear some “amens”?). Tom DiLorenzo’s book “How Capitalism Saved America” states that we all have different interests and tastes and aspirations. Some workers labor so as to achieve a wealthy lifestyle. Others work simply to provide for themselves with perhaps some nice amenities along the way. In my heart of hearts I tend a little toward the former, but I am grateful to be resting securely in the latter.

3. My job seems to provide less than my ideal amount of income. Then again there are two other factors that I fail to consider: a) my wife also works and brings in a tremendous supplement to my income and 2) our income exceeds our expenses. This means that I am living larger than often think I am.

When I consider that last year I went out to eat innumerable times, bought some great gifts for my wife for her birthday and Christmas, went to Dragon*Con, went to Mississippi, made a trip to Alabama, went camping, bought a Macbook, bought lots of iTunes music and gave a weekly tithe to my church all without starving, then I must admit that I things are not as dire as I am wont to make them out to be.  Does anyone else have this tendency?

Josh H.

05
Feb
09

Fair Tax Is a Good Start, but Not a Standalone Solution

On July 14, 1999 Representative John Linder (R-GA) first introduced a bill that would spark a major grassroots effort across Georgia and the country and change the way everyday people looked at their paychecks. That bill was dubbed The Fair Tax. To help the Fair Tax gain traction Linder co-authored a best-selling book with radio talk show host and self-proclaimed talkmaster Neal Boortz.

In a nutshell the Fair Tax repeals the sixteenth amendment, abolishes all income taxes and replaces it with a 23% national sales tax. This means that even though sales tax rates across the country will double or triple, the operating expenses and manufacturing expenses that are involved in making goods will drop dramatically due to the removal of taxes in the intermediate processes. A tax will only be collected at the retail level. Furthermore this national sales tax will not apply to the “basic necessities of life” such as food and clothing. So under this system it is conceivable that would might pay no taxes at all if no purchases besides food and clothing are made.

Prior to the sixteenth amendment in 1923, the federal government had twice instituted a temporary income tax: during the War Between the States in 1861 and then again in 1890. But 1923 and the 16th amendment marked the first time that Congress was granted carte blanche to collect income taxes at any time, to any degree, and at any rate without apportioning it among the several states. The original text of the Constitution demands that all taxes be the same throughout the Union and any direct taxes was to be based on population. The sixteenth amendment made taxes on income the only exception to the Constitutional rule.

Despite being quite revolutionary, the Fair Tax is still not without its problems. One of the purposes of the Constitution is to clearly define the role of government in our lives and to limit its scope in order to prevent tyranny and encroachment on personal property rights and liberty. The Constitution accomplishes this task handily whenever it is properly followed. However in the 20th century the United States government has taken on the role of a nanny to a degree that is unmatched by any prior period in U.S. history. The fundamental problem with Linder’s Fair Tax is that it does nothing to curb the overspending and fiscal irresponsibility that currently plagues federal government. The national sales tax simply moves the overreaching power of Congress from one sphere to another. If the taxing power of the government on income is quashed, then, with the current mindset, it will simply extort funds from citizens in other ways. Big government must change the way it thinks and the voters must help it do so by only electing representatives who will tighten the reigns on the federal government and guide it back to strict adherence to the delegated powers enumerated in the Constitution.

Josh H.




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