Creating Confusion in this Tax Cut Extension

[Rob W. Case]

It’s no news that the Bush era tax cuts were set to expire on December 31st, 2010. Now, there are some very odd dynamics occurring that I feel needs to be addressed.

1. All of a sudden, Obama is all of a sudden willing to “compromise” with Republicans after two solid years of telling them “I won,” locking them out of the meetings altogether in crafting the so-called “health care” bill, telling them that they should “sit in the back seat,” and calling them “the enemy.”
2. Obama is now, all of a sudden promoting a policy he has publicly damned for some time. Appearing to upset his base, he calls former president Bill Clinton in to “calm them down” by telling them, “It’s a good bill.”
3. Obama is having photo-ops with business executives. Is he trying to give off the appearance that he’s now going to act (and I stress ACT) friendly with job creators?

So, what’s wrong you may ask? Why do these things not make any sense? Because Obama just did something very sly, crafty, and very sneaky, and once it is explained, you will know exactly what is happening.

All self-serving politicians are crafty, and sneaky. Remember that. If they were honest and forthright, they could never be elected. A politician has the choice to do things fairly and win, or just win. Barack Obama and the leftist agenda lost big in this mid-term election, and his efforts to try and win re-election and a Democrat Congress in 2012 have just begun. Will it work? I don’t know. But wait till you see what’s going on after this is explained.

President Obama went haywire over extending the Bush tax cuts for some time. Recently, after the mid-term elections, he said, "It makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest two percent of Americans." And yet, among his supporters, he turned an instant about face, and after convincing his supporters that this was so, he all of a sudden signed on to “extending the tax cut for”….what he says is, “the wealthiest two percent of Americans.” But the truth of the matter is this. This isn’t the Republican Party that was just elected recently in November. How can the Republican Party hold this bill hostage if they are in such a minority that they have virtually no effect in anything they conduct until this current 111th Congress expires? Remember, the new congress (with the Tea Party Republicans) begins January 5th of 2011. This is still the old Congress.

But if you take the details of this LA Times article to heart, people are so ignorant of how the government works, that they are upset with the Republicans that haven't even taken office yet. Read the article.......

Poll finds voters not impressed with Republicans' House takeover that hasn't happened yet

latimesblogs.latimes.com/washington/2010/12/republican-house-takeover-new-hampshire.html

Surprise! Surprise!

Three things can be explained for this behavior, and of course, they are calculated for political purposes down the road.

1. Obama is trying to prove that he can compromise, or “move to the center” mostly for PR purposes.
2. With all of the pork that he and the liberal Democrat congress stuffed in this extension, he feels the need to do it right away, right before the new “spend-thrift” Tea Party Republican House convenes in January. This is why he is all of a sudden “willing” to extend the Bush tax cuts. But at the same time, he is radically increasing spending. This is a toxic mix, because cutting taxes and lowering spending leaves room for production and from production comes economic growth and jobs to go with it. With all of the increased spending stuffed within this bill, he just cancelled out the impact that the tax cut extension would have otherwise had. The political motive for this is simple: If or when it has little to no impact, he will have, at his convenience, the political “justification” he needs to say, “Umm… look, we tried it the Republicans way, but it just didn’t work. Cutting taxes doesn’t work.” Obama knows and depends on people to not look into the matter because he knows and depends on ignorance to push forward, and those who are ignorant will not go beyond what he says as their only source of “information”.
3. Within the spending increases is a two year extension of unemployment benefits. This is most definitely done for political purposes, as they would last and become a campaign issue for the 2012 presidential/Congressional campaigns. Anyone who knows anything about basic economics knows that jobs are created based on the volume of production. As demand rises, more people have to be hired to fill the demand of the goods and services provided. President Obama and his liberal minions, as things stand, are the sole force in the way of job growth. When he talks about extending unemployment, people see him as a hero, yet he’s anything but. He is stifling job growth on purpose, and in that, is adding millions and millions of people on to the welfare rolls. When government spends far more than it takes in through production, you have a revolutionary problem because those who collect are not paying out any Federal income tax. That creates, by necessity, the “need” to either print money or declare bankruptcy altogether. When you print money (which is what we are currently doing), we get charged interest rates on every dollar by the Federal Reserve, a private bank led by private global bankers. The more we borrow, the more interest we have to pay, and the more the interest we have to pay, the more the value of the U.S. dollar diminishes. As a result, you have high inflation and higher inflation causes prices to spike tremendously. And while people are more frugal in their spending, they buy less and less. As inflation rises and rises, people buy less and less, suppressing the demand for goods and services, and as a result, more and more people (who are also consumers) lose their jobs, and the economy, victim to this constant pattern, shrinks and shrinks. This effort is a last ditch effort for Obama to cause more harm to further place America into third rate status on the global stage.

The Essence of the trick:
In the short term, what do you have? In the extension that was just passed all you will have is what you have now, but with more spending tacked on to it. In other words, this is just another “Stimulus” bill, meant to confuse the layman by increasing spending, but keeping the tax levels at their current, already existing levels. Nothing more, nothing less.

[MysteriousGuestX]

I try to stay out of politics as much as possible. It's a tricky subject where no one wins. But honestly, we need a rise in taxes. That is the only way we'll be able to pull ourselves out of this pit. The top 2% of America has about 70% of the wealth. I'm sorry, but taxes on them will be the most affective. Letting the taxes go back to the pre-Bush value would have been extremely helpful to our budget.

I look at the paper nowadays and I see education being cut everywhere. Texas alone is cutting approximately 4.8 BILLION from their education budget, but they refuse to raise any taxes. That is just crippling our youth. It pains me to see education being cut first when so many other things can be removed with less damage.

Just look at the tax breaks and incentives we give to fossil fuel companies. Oil companies are one of the largest corporations in the world. They have record profits nearly every year, even with our recession. Or the military. I agree with giving our military the money it needs to protect our soldiers, but there comes a point when you can no long buy protection. We have the largest military in the world for god's sake, we can afford to tone it back a bit.

[Rob W. Case]

Feb 16, 2011 10:45:08 GMT -6 MysteriousGuestX said:

I try to stay out of politics as much as possible. It's a tricky subject where no one wins. But honestly, we need a rise in taxes. That is the only way we'll be able to pull ourselves out of this pit. The top 2% of America has about 70% of the wealth. I'm sorry, but taxes on them will be the most affective. Letting the taxes go back to the pre-Bush value would have been extremely helpful to our budget..

When you mentioned the top 2% it reminded me of this article.....
online.wsj.com/article/SB123561551065378405.html

That article was written in February of 2009. In February of 2009, even though things were bad, we still had way more (in comparison) to what we have now.

Having said that, what I find interesting is that the wealthiest people still pay the most in income taxes (top 10 pay close to 70%), yet the wealthy that were wealthy yesterday are not necessarily as wealthy as they are today. The new "wealthy" is pretty much the recipients of the money Obama and the Democrat congress funnelled over to his political interest groups. Since most wealthy people have to work to either accumulate or maintain their already existing wealth, they have to do so by being in business, and if their business is not making any money, then they have no reason being in business. And so they simply close and watch their spending, investments, and are a little more disciplined in their banking habits. Another thing I find fascinating is that many wealthy people have been moving away to escape the new wave of taxes. After all, why be forced to pay high prices for things that aren't worth the trouble? After all, if these wealthy people stayed, they would be paying to bail out incompetent political decisions instead of, as the slogan goes, "paying their fair share." All of the small business owners I knew or talked to are now out of business. All of them. Not one person (at the time I write this) that I knew personally as a small business owner is left standing. So I don't know who is left, who has the money to sustain all of this overwhelmingly heavy pressure. I mean we've never had a debt so big in the history of this nation. We've never had a deficit so huge before. And even the richest of the rich in this country don't have enough money to run the government by itself. The reality of all of this is felt very heavily in the private sector. Even a good friend of mine who works for Wal-mart told me that even they are working on a skeleton crew and having to take cuts in hours.... at WAL-MART of all places.

The problem with raising taxes even further in this economy is that the income sources of far more people than we are aware of are now left to very little at best, or have nothing at worst and are collecting "benefits" now from the Federal Government. I talk to people all the time now that are either collecting unemployment benefits, or are so hopeless towards even finding a job that they are now either dipping into their personal savings accounts to survive, or have cashed out their pensions or 401k's prematurely and are living off of those. Raising taxes under such conditions makes it even more difficult for these people to survive. Some people have had to move to other states. Others have had to "degrade" their positions and go from being owners of a house to renting an apartment. At least that is the situation we find ourselves in at this time, and it seems as though experiences like these things are getting all the more common.


More Taxes Isn't Always the most Reasonable Solution:
MysteriousGuestX, here in Illinois, Governor Pat Quinn (D) is doing both. He's raised taxes and he's cutting funding to education. Just about every state (if not every state) currently has such large debts and not enough revenue being created to fill the holes that if education were abandoned completely from Federal funding it would most likely take years and years and years to even catch up without it. Because jobs are diminishing, people's source of income is diminishing, and cannot sustain more and more pressure. Tax rates always go up, and rarely ever go down. We are in very deep trouble. There is too many entitlement programs, too much corruption, too many people taking and not nearly enough people producing anymore. When inflation exercises its full fury, it will cause such a destructive domino effect that I don't even want to think about because it's too depressing.

Feb 16, 2011 10:45:08 GMT -6 MysteriousGuestX said:

I look at the paper nowadays and I see education being cut everywhere. Texas alone is cutting approximately 4.8 BILLION from their education budget, but they refuse to raise any taxes. That is just crippling our youth. It pains me to see education being cut first when so many other things can be removed with less damage.

I think there is a viable solution for that. I think we need to quit wasting money on political interest groups. Billions of dollars keep going to unions and lobby groups who benefit from public sector contracts, one of which is the NEA, which is a Democrat special interest group that is a part of the AFL-CIO (which always pushes for electing Democrat politicians). The other is the American Federation of Teachers. My union used to be a part of the AFL-CIO until they dropped out to support greener pastures (i.e. PUBLIC sector jobs funded by the taxpayer). Sure, one can make a case about the quality of education. Some people cannot add, subtract, multiply or divide, much less think for themselves. And they graduate that way. But some of them have no idea why they can't find a job. If a kid cannot get a decent education with a well funded education system, then the teachers responsible should be held accountable. But due to thier being union, and all of the beureucratic red tape it takes to fire a bad teacher, they still remain and get paid very well. And those teachers (especially the bad ones) come out to vote to "save the benefits" they have. I think that if a school does well, it should be rewarded well. I think that raises should be determined by a teachers performance. After all that is why he/she is there in the first place. I think special interests should be completely removed. From there, it would make the entire concept about funding education, or defunding it a lot more bolder. I think that what is being pushed by the Department of Education, the ignorance of our "educated" youth (Jay Leno and Sean Hannity would do a "man on the street" type bit that would make fun of this), it is creating a resentment towards the education system entirely by ordinary Americans. If this continues, and these trends continue, then even if education is reformed, people will be set into thinking that the same old stuff that's going on now will be forever going on, so legitimate education funding will suffer as a result. Special interest groups create half-assed job performance, and builds a confidence in being more and more lax, knowing that a union rep is going to have your back no matter what you do. It's something to consider at least.

Feb 16, 2011 10:45:08 GMT -6 MysteriousGuestX said:

Just look at the tax breaks and incentives we give to fossil fuel companies. Oil companies are one of the largest corporations in the world. They have record profits nearly every year, even with our recession. Or the military. I agree with giving our military the money it needs to protect our soldiers, but there comes a point when you can no long buy protection. We have the largest military in the world for god's sake, we can afford to tone it back a bit.

Oil Companies do generate profits during massive recessions because of the fact that oil is a necessity we depend very deeply on. Yet, despite the income they generate, they are a business and as a business their existence relies on generating a profit. The more you tax any company, the more it falls into the price of the good or service offered, which in turn forces the cost to fall on the pocket of the consumer.

Case in point:
In 2007, when the Democrats took control of Congress they passed two bills that raised taxes on oil companies. "Global warming" was the justification for passing these bills. Gas went from $2.229 a gallon to going as high as $3.34 in just a few short months. Then in 2008, gasoline went as high as $4.18 a gallon and stayed that way throughout the summer, and into the fall, going into the territory of $4.24 a gallon. No wonder the economy sank and became a concern in 2008. I remember prices had to spike because of the increased gas prices not only for profit, but because it was costing so much to fuel our delivery trucks for the company I work for. Everything went up, and as a consequence, demand started to deteriorate, which caused massive job losses to boot. Then we had that whole Fannie Mae and Freddie Mac fiasco occur while those gas prices were doing their damage, so it was a huge mess. But that is what happens when uber amounts of taxes are levied on oil companies. We get hit even harder, causing the economy to shrink even further, since we have to spend even more of the money we make (at lesser levels) to pay the higher prices caused by those taxes. And this economy is, I believe, in critical condition at this moment in time.

The military:
When the Obama administration first took office, they didn't want to repeat the same mistakes Jimmy Carter made on national defense. This was done for political reasons. Jimmy Carter severely cut the military budget and America was severely weak due to it. After Carter, a strong military became more of a Republican stronghold, and a Democrat weakness. This time around, on defense, the Democrats did not want to be perceived as weak on the military, especially after how they were trounced in the 2004 election. When the Democrats campaigned in 2006, they constantly talked about Iraq and how much we were spending over there. Yet, when they got elected, Iraq was quietly tucked away with minor lip service on occasion, and has since then become a non-issue even though we are still paying all this money for them to be over there. Go figure.