All That Is Necessary

Whittle - The Vote Pump - Excellent!

This video is from Bill Whittle and speaks about what money is spent to buy votes.  It is also an excellent lesson on government revenue vs. government spending.

More Screw U.S. Citzens Abroad

Saw this article over at American Thinker entitled "FATCA: A Ticking Time Bomb for the Economy".

It is a disgusting attempt by the US Government to grab and tax every conceivable source of money that Americans may have, anywhere in the world, regardless of the reasons or consequences.

Read this:

FATCA (Foreign Account Tax Compliance Act) is the brood of FBAR (Foreign Bank Account Report).  FBAR requires that U.S. persons divulge foreign accounts to the Treasury Department, but few knew about or ever complied with it.  To stanch the bleeding of U.S. capital into secret bank jurisdictions like the Cayman Islands and Switzerland, Congress introduced FATCA into law as part of the HIRE Act.  FATCA requires that foreign financial institutions (FFIs) reveal the accounts of U.S. persons to the IRS.  The FFIs will then have to collect tax withholdings for the IRS from these clients.  If by January 1, 2014 the FFI is unwilling to reveal its U.S. clients' accounts, the IRS will impose a punitive 30% withholding on all payments to the FFIs, on dividends, interest, and gross sales of stocks, bonds, and financial derivatives.

Let's suppose that a foreign investor trades stocks on a U.S. exchange, but his broker is FATCA non-compliant.  One day he buys 10,000 shares of XYZ at $25 per share, and the next day, he takes advantage of a nice uptick of $1.00 in XYZ and sells at $26 per share.  He makes a tidy profit of $10,000.  But because his broker is non-compliant, the IRS now withholds 30% -- not of the profit, but of the gross proceeds of the sale!  So the client now receives the sum of $260,000 minus 30%.  The foreign investor is unhappy because his $250,000 investment has become $182,000.  If he wants his money back, he must file a U.S. tax return.

No investor would accept such conditions.  Hence, an FFI must either comply with the invasive regulations of FATCA or simply abandon the U.S. markets.

US expatriates are the hardest hit by this monstrosity.  It is already hard for a US citizen abroad to do banking and comply with US tax laws.  With this law it will be impossible.  Many US citizens will renounce their citizenship, which is already happening in record numbers. 

The utter stupidity of our government is really beyond belief.  It is nothing more than a criminal enterprise at this point.

 

 

Obama Pipeline Idiocy

We have an incredibly volatile Middle East right now.  The same region where the world gets most of its oil.  We get some of our from there, but not as much as we used to.  Still, oil is fungible so it really doesn't matter where it comes from, it is really all part of the same pot of oil.

We have the opportunity to really boost our regional supply of oil very quickly.  Canada is going gangbusters in Alberta tapping into Canadian oil.  The oil industry wants to build a pipeline to route this oil to the USA.  Obama and the environmentalist idiots are blocking it.

Obama Administration May Put Off Keystone Pipeline Decision With New Environmental Impact Study

"The source told Fox News that the Obama administration is considering much more than a simple reroute of the Keystone XL project. Instead, 11th hour deliberations are weighing whether to order the State Department to conduct an all-new Environmental Impact Study, which could delay a final decision by two years, well beyond the next presidential election, if not end it altogether."

This would effectively kill the pipeline.  And want to know where the oil goes then?  Canada has already said they cannot wait long and, if necessary, the pipeline will go to their west coast to load tankers to CHINA!

This is absolutely insane.  We have a chance to drastically improve our regional oil supply and the idiots in D.C. are blowing it.  Simply disgusting, yet totally predictable.

 

What Wall Street Rabble Wants - Simple

The Occupy Wall Street crowd is out there demanding things.  They're not really sure what things they are demanding, but it is really important!

I'll tell you what they want.  They want to replace the perceived control of corporate America and replace with the real control of totalitarianism.  They may not think that is what they are doing, but it is.

Simple.  They want to be slaves.

 

Bastiat's 'Broken Window' For Today's Youth

Frederic Bastiat wrote a piece in 1850 titled "That Which is Seen, and That Which is Not Seen". 

I thought it might be a good idea to takes each of the sections of the paper and re-write them using modern language, terms, circumstances and dollars.  The whole thing is well worth your time to read at the above link.  My version will be quicker, though maybe not as satisfying.  It is written with the hope more people will think about the economy and governance with freedom in mind.

The first section is THE BROKEN WINDOW:

I'm sure you've seen the convenience store where a car inevitably manages to drive right into one of those big plate glass windows.  Not a pretty sight.  And no doubt you've said, in consolation to the manager - "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"  OK, maybe you didn't say it the way Bastiat said it, but you probably thought that at least the glass company will get some work.

Wrong!  That is not the way to think about it, even though most people do so, particularly the ones currently in charge in D.C.

Those windows are big and expensive.  Suppose it cost $500 to repair the damage.  You figure the glass company now has $500 it didn't have before.  You are correct.  You can see that the glass company has an additional $500.  All this is that which is seen.

This might lead some to think that if breaking one window generates new business, than we should break more windows!  Generate a LOT of new business.  NO!  You are only thinking about that which you can see.

What you do not see is that now that the convenience store had to spend $500 on a new window he cannot spend that $500 on other things.  He cannot buy more stock for his store or a new bicycle to ride to work.  (He lives close to the store.)  If this accident had not occurred he could have spent that money in other ways.

OK, pay attention, this is key.

Thinking of the overall situation, you can see the glass company got $500.  You cannot see the bike store will not get $500.

$500 was spent to repair a window.  The owner now has $500 less just to get back to his original position.

If the window had not been broken the owner would still have his window AND a new bike.

Looking at the big picture, with the broken window, society has lost the $500 it cost to repair it.  With no broken window, society still has the window and a new bicycle.

Here is Bastiat's explanation.  (It is plain in any age.)  When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end - To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."

You must always take into account that which you cannot see.  In this instance you see the convenience store owner has a window again.  You see the glass company has $500.  You do not see the bike store has lost $500.  It is the "bike store" that remains in the shadow, never seen.  "Society" is out the new bike.

We see this idea even today.  Recently "renowned" economists were stating that the destruction by the recent hurricanes would lead to economic growth.  Billions will have to be spent to only bring us back to where we were before.  That is money that cannot be spent on other things.  Nope.  Destruction is not profit.

Also, even though we are talking about destruction of a window, this also applies to government restrictions on the store owner.  What must be spent complying with rules and regulation is as lost to society as that new bike.

(I do recommend you read the original in the link above.  My attempt should be considered the "fast food" version.)

Fair Tax - Learn It, Love It, Live It

A cure for what ails us.  The FairTax would solve a whole heck of a lot of our problems, from intrusive IRS policies, to bringing home money sitting overseas.

I urge everyone to go read what the FairTax proposal is.  It is NOT a Value Added Tax.  It is not "in addition to" the current tax system.  The positives of such a tax are enormous.  Read the for yourself at the site in the link.  Here is a small taste from the FairTax site:

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

"The FairTax Act (HR 25, S 13) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax  administered primarily by existing state sales tax authorities.

The FairTax taxes us only on what we choose to spend on new goods or services, not on what we earn. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system."

The biggest obstacle to this plan is Congress.  It would destroy their ability to use the tax code to favor or punish particular industries and groups.  It would reduce their power, so they hate it.

Perhaps the coming economic debacle will provide a chance for a real solution like the FairTax.

 

"Close" To Recession

The talking heads are joking, right?  Close to a recession?!?!  I don't care what falsified government numbers say, we never got out of the last damn recession!

The idiots in D.C. will just never learn that THEY are the cause of the economic problems.

Expect more stupidity from the Ruling Class and their pet media.

U.S. Treasury As Household Budget

My lovely wife sent me this link:

Putting things into perspective by removing 8 zeros

-Why S&P downgraded -

• U.S. Tax revenue: $2,170,000,000,000
• Fed 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
Let's remove 8 zeros and pretend it's a household budget:

• Annual family income: $21,700
• Money the family spent: $38,200
• New debt on the credit card: $16,500
• Outstanding balance on the credit card: $142,710
• Total budget cuts: $385

Not sure where it originated, but it is good.

Stock Markets - What The Hell?

Recently the stock market in the USA and around the world have been on a wild roller coaster ride.  Up, down, up, down, down, up, up - enough to make you pretty queasy.

I spent my early career in finance, specifically looking at the financial health of companies for loans and investments.  Fundamentals, conservative projections, dividend stream, taxes, etc., were key to estimating the value of the company now and down the road. There was at least some rationality to the price over the medium term.

Today's stock market is completely divorced from any reality.  A stock goes up or down without any regard to the actual fundamentals of the company.  It is all emotion at this point.  I have almost nothing in the market at this point, and if we do get a bit of a rally over time I will sell ALL OF IT.  (Not that I have all that much anyway.  Unemployment sucks that way.)

The stock market is no longer a safe place to invest.  Hell, it isn't even a safe place to gamble!

 

The Fantasy Is Ending

A deal on raising the debt limit may be reached in the next few days. 

It doesn't matter.

Just a quick look at the possible deal shows puny proposed cuts in spending and continued massive deficits forever.  Worthless.

But the larger problem is, given all the idiocy on display in D.C. by both parties, the world, and more importantly the credit rating agencies, are seeing how incompetent the US leaders are.  The credit agencies, in order to keep any semblance of legitimacy, will have to downgrade the US debt.  Hello higher interest rates, goodbye any theoretical recovery, for a long, long time.

At least the curtain has been opened and the corruption and decay in D.C. is plain to see.  It will be an opportunity for good, or bad.

Remember, it is always darkest before it goes pitch black.  (The dawn is still a long way off.  Maybe after November 2012.)