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The good news is: consumer spending increased in January for the third straight month. The bad news is: incomes sank 3.6%. Since he who controls the numbers controls the message it is difficult to place any faith in the recent string of numbers. Whatever spin the President and White House will choose to place on these numbers the cold hard facts are inescapable.
Since President Obama took office we have added $6 trillion in new debt, about $20,000 for every man, woman, and child. We borrow 40 cents of every dollar we spend and spend a trillion more than we collect in revenues. Real unemployment is closer to 14%, long term unemployment has increased dramatically, there are two million few people working now than when the President took office, and the majority of jobs created are low paying, temporary, part time jobs.
The cost of energy has soared, trillion have been spent propping up the stock market, hastening runaway inflation, while savings accounts and CD’s bring a near zero return on investment. A hostile business environment and strangling regulations are forcing our remaining jobs overseas. As government continues to expand the private sector continues to contract. Since 1947, thirty two percentage points of our economy have been transferred from the private sector to government.
The average hourly compensation for people on welfare now exceeds the average hourly compensation for workers. It is not a question of if our economy will collapse but when it will collapse. Those who have good jobs and have been unaffected by our pitiful economy are oblivious to the fate that awaits them as well. We are a nation largely in denial. We cling to the slightest bit of good news as a baby clings to its security blanket. But our day of reckoning is coming and will not be a mix of Good News – Bad News.
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The Republican circular firing squad continues. When Speaker John Boehner stated that he was postponing a vote on a Hurricane Sandy relief bill, New Jersey Governor Chris Christie decried the ‘selfishness and duplicity, the callous indifference to the people of our state for that decision. Representative Peter King (R-NY) accused Boehner of “plunging ‘a cruel knife in the back’ of storm-ravaged residents ‘who don't have shelter, don't have food.
It was in October, just after Hurricane Sandy and just before the November election that President Obama made a photo op appearance in New Jersey. President Obama and Governor Chris Christie looked like a newly married couple as they sung each other’s praises. The coming of the President meant the healing of the planet or at least the East Coast. The President promised to move heaven and earth and that FEMA would do everything in their power to make the residents whole.
The President had won reelection but the East Coast was still devastated and promises were once again broken. But rather than vent their anger at the true villain, the President, Christie and King chose to attack Speaker Boehner. Rather than look at the facts and redirect their efforts they chose the least culpable person.
The estimates of insured losses from Sandy come to about $20 billion while the proposed package was about three times that amount, with $28 billion marked for future disaster projects. These projects include operation Head Start, fisheries in Alaska, free money for the Secretary of Health and Human Services, and repairs to the Smithsonian. It was exploitation of a disaster to sponsor a massive pork bill with no spending offsets. Once again the bill was put together last minute with scant time to read or study the bill to make an informed decision, an instant replay of every piece of legislation proposed by the Obama administration.
It is now January. The President and Democrats had almost three months to propose an aid package but chose to invent a crisis, creating an opportunity too good to waste. More importantly, we must question exactly which party does Governor Christie and Representative King represent? And where exactly had they been these past three months? And where exactly is the responsibility of the people, the community, and the State? When disaster struck Joplin and Branson Missouri, residents did not complain or wait for government to fix their problems. They rolled up their sleeves and rebuilt their communities. They did not respond to a tragedy with Righteous Indignation.
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The President, Democrats, and the mainstream media have been adamant in their assertions that our budget cannot be balanced with spending cuts alone. Let’s take a trip down memory lane. In 2007, the last year Bush was President and the Republicans were in control of Congress the budget deficit was a mere $160 billion dollars. Former President Bush had decreased the budget deficit in each of his last four years. With a Federal budget in the range of $3.7 trillion dollars, balancing the budget would have represented a mere 1.9% cut in spending.
It is not a sharp drop in revenues but a sharp increase in spending and the growth of government that has punctuated this administration. In the first two years alone, discretionary spending increased by 24%. With Obamacare there will a continuing increase in the size of government and a cost of over $2 trillion dollars. As government expands, the private sector contracts. As the private sector contracts so does private sector revenues and the taxes that come from those revenues. Since 1947, 32% of our economy has been transferred from the private sector to government and the trend continues. The recent tax increase on the “evil rich” will mean an annual loss of $60 billion from the private sector.
The fact is: taxpayer dollars are used by politicians to continue and expand programs that will keep them in office. Government entitlements insure a perpetually dependent underclass of voters, content with living at or near poverty levels of income. A symbiotic relationship exists between politicians and voters. If entitlements are not continued and expanded, politicians will not be reelected. If politicians are not reelected, then voters, dependent on government handouts will see the well run dry.
Individuals and businesses cannot arbitrarily borrow money, print money, or increase revenues to balance their budgets, they must control their expenses. Government recognizes no such limits. But politicians and voters who feel entitled to receive government endowed rights and benefits refuse to stop this spending orgy. Claiming that we cannot balance the budget with spending cuts alone is The Big Lie.
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Assured of a trip to the chiropractor after hours of patting themselves on the back, both Republicans and Democrats came to the long expected compromise to avoid the “fiscal cliff”. But what did they really accomplished? The Democratic demons in the form of the “evil rich” had been exorcised. Republicans again showed an absence of a spine and Democrats once again proved they have no interest in abating gluttonous spending or avoiding national bankruptcy.
There will be increases in the tax rates for those making over $400,000 per year. The increase revenues will amount to about $62 billion per year. How that is going to fix a $1.3 trillion dollar budget deficit has yet to be explained. There will be a two month sequester. Jobless benefits were extended for one year, a $30 billion dollar cost that is not paid for. The Medicare "doc fix" is paid for by savings that will be taken from other provider payouts in Medicare, a fix that is not a fix.
While the question of sequestered cuts and extending current tax rates may have been resolved the questions of spending cuts, budget deficits, and, debt ceiling have not. Any proposed spending cuts are not really cuts in current spending they are decreases in the amount of proposed increases in spending. Taking more money from the rich will not reduce the budget deficit; it will be used to fund new spending programs. We will continue to have trillion dollar budget deficits and the national debt will rise by at least another $6 trillion over the next four years. We will continue to borrow or print 40 cents of every dollar we spend.
Social Security and Medicare will become insolvent; a barrage of new regulations will strangle private sector growth; jobs will continue to be shed or shipped overseas; the housing market will remains stagnant; family equity will continue to shrink; and growth in the GDP will continue to be anemic.
In short, our nation continues on an inexorable slide into an economic abyss. Selfish self-centered politicians have once again proved they are incapable of putting the nation’s interests ahead of their political ambitions. What the American people have seen is yet another Sell Out.
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President Obama and Democrats have been puffing their chests with righteous indignation at Republicans for their refusal to treat successful people as second class citizens. Taxing the “evil rich” mantra has been at a fever pitch for the past four years. Even if Liberals get their wish, the tax increases wouldn’t amount to a hill of beans. The $70 billion anticipated increase in new revenues pales in comparison to a $1.4 trillion dollar budget deficit.
Even if the punitive taxes are passed and implemented we will not see a decrease in our national debt or the budget deficit. The tax increases will simply fund new government programs. President Obama has taken us from a $160 billion budget deficit in Bush’s final year in 2007 to perpetual trillion dollar budget deficits. The Democratic controlled Senate has yet to pass a budget in four years as our national debt has soared by over $6 trillion dollars.
Our revenues have not plummeted; our spending has soared. We are simply following the path of Greece, France, and other Socialist nations as they descend into bankruptcy and chaos. France’s recent imposition of a 75% tax on their “evil rich” will do nothing to stop their economic bleeding; it will simply hasten the exodus of an invaluable revenue source. The rich in any nation do not pass budgets or introduce spending bills. It is politicians and members of Congress that have taken us to the brink of a financial apocalypse. Like Pontius Pilate, they have washed their hands of any responsibility.
Mark Twain’s uninformed and misinformed continue to buy the mainstream media storyline of a selfish 1% that is holding us back from economic prosperity. The fact that the top 1% pays almost 40% of the Federal tax bill and the top 10% pay almost 70% while the bottom 47% pays nothing goes unreported by a doting morally bankrupt media.
The President’s proposal is simple: massive tax increase now and possible spending cuts in years nine and ten of his plan. Rather than worry about the impending Fiscal Cliff, the President and Democrats should grab their Economics 101 text book and study their Cliff Notes.
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Quantitative Easing may be defined as a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.
Central banks tend to use quantitative easing when interest rates have already been lowered to near 0% levels and have failed to produce the desired effect. The major risk of quantitative easing is that, although more money is floating around, there is still a fixed amount of goods for sale. This will eventually lead to higher prices or inflation.
Quantitative easing is an option not open either to individuals, small businesses, or corporations, neither is unlimited borrowing, or the ability to arbitrarily increasing revenues. Our Federal government has the ability to make their own rules and set their own standards. Because the prime rate is essentially at zero percent and the Federal Reserve has printed trillions in paper money it is no surprise that the stock market has risen steadily. With nowhere else to put their money with an expectation of a reasonable return on their investments individuals and investment firms are putting their money in the stock market.
Rather than apply the proven principles of a free market economy where supply and demand determine pricing and availability the Federal Reserve and the Obama administration have decided to use smoke and mirrors to create a fictional recovery. As our government grows, and it has grown substantially, the private sector contracts, leaving a decreasing number of individuals and businesses to support and ever expanding bureaucracy.
While quantitative easing may appear enticing in the short term. The long term fallout is hyperinflation, a shortage of goods and services, high unemployment, higher taxes, a stagnant housing market, permanent trillion dollar budget deficits, an enormous national debt, shrinking household incomes, and dwindling family assets. It is not that Bernanke and President Obama are out of ideas or solutions; they never had ideas or solutions.
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If we have heard it once we have heard it a thousand times from our President, “The rich need to pay their fair share.” “Rich” is the Liberal word for “Hard working successful taxpayers.” It is but one of many lies being told about successful people as President Obama continues to engage in class warfare. The mainstream media has been complicit in these fabrications.
The facts are: the “rich” pay far more than their “fair share” The top 1 percent of tax returns paid 39.9 % of all federal individual income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 % of tax returns. The top 10% pay 68% of the income tax. The bottom 50%, those below the median income level, earn 13% of the income, but pay just 3% of the taxes. Twenty percent of the middle class pay only 4.4% of the income tax and the bottom 47% pay no income tax.
It is astounding that the bottom 47% that pays no Federal income tax is saying that the top 1% that pays almost 40% of all Federal income tax is not paying their proper portion of taxes. The fact is: progressive income taxes penalize and discourage successful people. The harder you work and the more successful you become the more you will be penalized.
The idea of a progressive income tax was repugnant to our founding fathers. The Fourteenth Amendment provides for equal protection. When Congress passed another income tax in 1894—one that only hit the top 2 percent of wealth holders—the Supreme Court declared it unconstitutional. Stephen Field, a veteran of 30 years on the Court, was outraged that Congress would pass a bill to tax a small voting bloc and exempt the larger group of voters. At age 77, Field not only repudiated Congress’s actions, he also penned a prophecy. A small progressive tax, he predicted, “will be but the stepping stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich.” In 2012 that prophecy came true.
In 1913, almost 20 years later, the ideas of uniform taxation and equal protection of the law for all citizens were overturned when a constitutional amendment permitting a progressive income tax was ratified. The tactic of divide and conquer may be successful as a political strategy but fails as an economic strategy. Higher taxes decrease revenues and progressive income taxes discourage success and investment in our future. A dictatorship that claims to represent the people now determines what is our Fair Share.
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The Republican buzzword for surrender is “compromise”. John Boehner once stated, “Sometimes it’s hard to do the right thing.” Republicans seem resigned to raising taxes to avoid the “fiscal cliff” and reduce the budget deficit.
Good never compromises with bad, right never compromises with wrong, and justice never compromises with injustice. But, in a nation that has lost its moral compass, what was once crystal clear no longer sees the light of day.
Did Jesus compromise when faced with crucifixion? Did Christians compromise when facing persecution? Did Patton or McArthur compromise when facing the enemy? Would a parent compromise when it comes to the safety and security of their family?
We have become a nation that no longer recognizes a moral standard or a power greater than our government. We have corrupted our media, our family values, our Judeo Christian roots, our Constitution, the rule of law, the Separation of Powers, the sanctity of marriage, and our civility.
Our values and our spirit distinguish us from other living creatures. We have sold our souls to the devils to satisfy our thirst for power and material things. If we do not have our honor and our dignity we have nothing of value. Do we want to be remembered as a people of unshakeable principles or a people of pitiable Compromise?
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Barack Obama supporters celebrated his reelection into the wee hours of the morning. Drunk with the power of big government there will be the consequences of an economic hangover. Elections have consequences and consequences there will be.
In just four short years our President has amassed $6 trillion in new debt, saddled us with trillion dollar deficits as far as the eye can see, printed worthless money at a record pace, expanded government, and drastically increased spending.
Even if the President succeeds in punishing the “evil rich”, the maximum increased revenues will total no more than $70 billion dollars. This pales in comparison to a projected budget deficit of $1.2 trillion. How is taxing the job creators going to create more jobs? Where exactly will the additional revenues come from: the middle class of course? With 20 new taxes on all income levels in Obamacare, massive new taxes are coming to the middle class.
The fact is: there is no plan to decrease spending. At best, there will only be a decrease in the proposed levels of increased spending, namely, a continuing increase in government spending. Companies and corporations have already begun laying off employees or decreasing the maximum number of hours they may work, eliminating the possibility of participating in company health insurance plans.
As government continues to grow the private sector will continue to contract. Since 1947, 32% of our economy has been transferred from the private sector to our government. As the government presses continue to print money at a frenetic pace, hyperinflation is just around the corner. We will seen energy prices skyrocket as coal and oil production are strangled by onerous regulations.
High unemployment, stagnant economic growth, and a depressed housing market will become the new norm. The President is hell bent on destroying the goose that lays the golden egg. As you reduce corporate profits you decrease corporate taxes, thereby reducing government revenues. Every tax or regulation on businesses and corporations is ultimately a tax on consumers. As Liberals have ushered in another four years of economic calamity, Let the Pain Begin.
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The reelection of Barack Obama was not a victory of ideals and it was not an endorsement of his record over the past four years. He made no effort to defend his record or present a plan for the future except a continuation of failed policies. His was a campaign of the most vile vicious hateful lies about his opponent. Mitt Romney was the consummate professional with a sterling record of job creation and business acumen. His character and moral standing was never in question.
So why then did a majority of our electorate vote for President Obama? About the time our original 13 states adopted their new constitution, in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh, had this to say about the fall of the Athenian Republic some 2000 years prior: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from
the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."
What we witnessed were people motivated by self interests not our nation’s welfare. The tipping point of a nation dominated by recipients of government endowed entitlements was finally manifest. Blacks, Hispanics, students, single women, and other self-proclaimed minorities mobilized to protect their share of the government pie. It did not matter if we had the money or who was paying the bill. It simply mattered that they would retain their perceived due.
Conservatives who studied the issues and methodically presented the facts and a record of economic and social failure were stunned and mystified by what they thought would be, a changing of the guard. What we needed was a restoration of the founding principles that made us the greatest nation the world has seen but what we got was a continuation of the policies that will destroy our nation. What Conservative failed to understand is: When it comes to human nature, Greed Trumps Need.
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