The Time for Transformation Has Arrived

Today the House passed $787,000,000,000 in new spending under the guise of saving our economy from complete and utter destruction. It should be noted that none of the Republican members of Congress approved the bill, and even seven Democrats opposed the spendulus package.

The bill now goes up for vote by the Senate, where it is expected to pass with the support of the two "Republican" senators from Maine pushing it over the hump.

"We've done something today that's transformational for the nation," said House Speaker Nancy Pelosi, D-Calif., in a press conference after the vote.

House Appropriations Committee Chairman David Obey, D-Wisc., characterized the bill as "the largest change in domestic policy since the 1930s."

Does this talk of change and transformation scare anyone besides me? Personally, I like a free market system. I enjoy living in a Democracy. I don't want our country to transform into something else. I don't want this kind of domestic policy change. This kind of deficit spending is not healthy. In fact, this kind of deficit spending on the part of consumers is exactly why we are in this mess in the first place.

On top of the spendulus package that just passed, Obama is now considering a plan to subsidize the mortgages debt of homeowners facing foreclosure on their homes.

Details remain scarce, but at this point the subsidy plan entails having struggling homeowners take an affordability test and undergo a re-appraisal to see if they are eligible. The subsidy would allow servicers to adjust the loan terms without having the mortgage's investors take a loss, which should make them more open to the loan modification.

If the investors and mortgage holders aren't taking a loss, then who is? Taxpayers would take the loss. How is this fair to those who have been responsible about living within their means?

In my opinion, these policies are leading us perilously close to Socialism and/or Communism.

Questioning Politics.

Could This Be the End of Democracy As We Know It?

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship."

I believe this quote is attributed to Thomas Jefferson, although I could be wrong about that. Regardless of who said it, the point remains frighteningly true. I'm not about to say this current series of spendulus packages and government spending increases will be the cause of the downfall of the US government as we know it. But we should all be on high alert for further signs of a move towards socialism and/or widespread government dependence.

The late Dr. Adrian Rogers is credited with the following quote:

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."

It's important to be aware of the steps the government is taking and prepare yourself for the worst. I certainly don't want to be working for the benefit of someone else. If that's the situation we find ourselves in, we better have a plan of action to absolve ourselves of the problem. Any suggestions about what could be done?

Questioning Politics.

Quote of the Week

Morgan Stanley CEO John Mack apologized for his company's part in causing the housing bubble.

Rep. Michael Capuano, Democrat from the Boston area, rejected the apology with the following comment:

"You come here today on your bicycles after buying Girl Scout cookies and helping out Mother Teresa. You're saying, 'We're sorry. We didn't mean it. We won't do it again. Trust us.' I have some people in my (district) who have robbed some of your banks and they say the same thing."

I couldn't have said it better myself!!

If There Must Be a Tax Increase...

The other day, one of my favorite blogs, Independent Political Report, posted a letter from Ralph Nader regarding a financial transactions tax.

I have not paid attention to Nader or his views recently, but I appreciated some of the ideas put forth in this letter. For instance,

Let’s start with a fairness point. Why should you pay a 5 to 6 percent sales tax for buying the necessities of life, when tomorrow, some speculator on Wall Street can buy $100 million worth of Exxon derivatives and not pay one penny in sales tax?

The basis of my position on tax entails trying to find the most fair and equitable tax treatment for all people. I hate paying taxes, but I understand it is a necessary in order to provide for a safe and effective country. It doesn't seem fair to me that speculators are purchasing assets (stocks, bonds, etc.) without paying a sales tax, simply because of the type of asset it is. Nader goes on to say,

He adds that after the 1987 stock market crash, securities-trading taxes “or similar measures” were endorsed by then Senate Minority Leader Bob Dole and even the first President Bush. Professor Pollin estimates that a one-half of one percent tax would raise about $350 billion a year. That seems conservative. The Wall Street Journal once mentioned about $500 trillion in derivatives trades alone in 2008—the most speculative of transactions. A one tenth of one percent tax would raise $500 billion dollars a year, assuming that level of trading.
Economist Dean Baker says a “modest financial transactions tax would be enough to “finance a 10% across-the-board reduction in the income tax on labor.

I would love to see a decrease in my income tax bill. I don't believe a 0.1% tax added to my purchases of stocks would hurt me, nor would it affect most people.

There are conditions, however, to my support for a tax of this nature. I would only favor this tax if there is a reduction in income tax. This condition would be next to impossible to be included, with the economy in being in its current state.

Condition #2 is that there be a waiver of financial transaction taxes in 401(k) and other retirement accounts. Taxing retirement accounts would be counterproductive.

I don't anticipate ever seeing a proposal such as this being discussed seriously in Congress or the Senate. The big financial institutions who would end up paying a large chunk of the increased revenue just wouldn't allow it to happen. It's all just wishful thinking.

Obama for Change

All About the Stimulus

I read a very interesting article on CNNMoney.com about the need for the economic stimulus and why other proposals, such as giving the money directly to taxpayers might not be the best idea.

A lot of the article made sense to me, and I don't feel quite as uptight about what is going on in Washington.

On the other hand, a lot of it sounded like it could be propaganda. If given enough time, you could write a persuasive article for just about anything.

For me, the real question is why would anyone actually interested in the long-term welfare of this country wish to add another $1,000,000,000,000 to our deficit to knock a few months off a recession that will correct itself within a couple years at most?

In the end, it boils down to my lack of trust in the government agenda. I feel that although something might need to be done, this "stimulus plan" is not based in an effort to revive the economy. If left alone, the economy will rebound on its own like it always has and always will. It might take two or three years of pain, but this pain is essential to creating a healthy economy in the future.

The "spendulus" might knock a couple months off the length of this recession. But is that really worth adding $1,000,000,000,000 to the national deficit? Worse yet, is it worth the guaranteed inflation that will haunt us on the other side of the recession?