conservative

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Obama’s New Tax Increase

Obama has tried numerous strategies to try to gain favor and/or bad mouth Mitt Romney in the past months.  It is has been mildly impressive that they have a new attack every week that is completely random, usually not true, but very distracting.  However, last week President Obama got back on what appears to be one of his key messages, that the rich people need to pay their “fair share” and actually presented a policy stance: raising taxes on the “wealthy.”

President Obama said that the Bush tax cuts need to expire for those making more than $250,000 for couples and $200,000 for individuals.  His proposal is a one year extension, just enough to get him through the election.  One of his main arguments was that he wants to return to the same tax rates as the Clinton era.

However, in 2001 (Clinton’s last year as President), the federal budget was $1.9 trillion.  In 2011, President Obama’s federal spending was $3.6 trillion.  In ten years, our government has nearly doubled in size and the President’s tax plan does not get us close to a balanced budget.  Further, I feel his tax plan of increasing taxes on small businesses will be a job killer.  A small tax increase can take away the revenue needed to pay someone’s salary.

The Republicans and Mitt Romney argue that tax cuts are the key to recovery, based on what Reagan did.  The reason it worked for Reagan is that he brought tax rates down by over 40 percentage points, which is a big change that did spur economic growth.  However, all of the Republican proposals I have seen have been less than 5% points, which will not be significant enough to catapult our economy.  As much as I believe in tax cuts, we need to get our spending house in order before we get too aggressive with cuts.  If we cut taxes too much before reducing spending, it could hurt our deficit so much, that it will slow economic growth instead of spur it.

As I have always said, this blog is about solutions.  There are a lot of things I would do such as repeal Obamacare and cut spending drastically.  However, I would go after two things first that are a little less political and could have the biggest initial impact for our economy.  The first thing we need to do is gain some stability, so I would try to get permanent income tax rates versus continually extending Bush tax cuts one year at a time.  Permanency gives stability to small businesses, thus allowing them to plan and hire.  Because this would not be easy, here’s my compromise: make the Bush tax rates permanent, but close loop holes.  The rates keep taxes low, but closing loop holes increases revenues, making both parties happy.  While Republicans may argue that closing loop holes are a net tax increase, I have a different opinion altogether.  Loop holes are, in my mind, unintended tax breaks that lawyers took advantage of, which is not congruent with the original intent of Congress when the code was created.

The second thing I would do is permanently cut the corporate tax rate in half.  Right now, the United States has the highest corporate tax in the world.  Our corporate tax revenue is only 8% of the U.S. total revenues (approx. $180 billion), so it’s impact financially for the government would be small, but the impact for the businesses would be large.  Cutting the rate in half does three key things:

  • It reduces the cost of doing business in the United States, helping jobs come back home from overseas.
  • It increases the ability to hire people and reduce unemployment.  Further, when the money goes to individuals’ income vs. corporate income, it will still be taxed, thus roughly breaking even on net revenue.
  • Last, this concentrated radical change would be just big enough to spur change in our economy.  The tax cut would essentially increase the profitability of every corporation in the United States and help the stock market as well.

The key to problem solving is to start with high impact, low effort solutions (i.e. my two ideas).  Afterwards, you look for high impact, high effort solutions (i.e. solving social security and healthcare).  The two simple ideas I proposed would be easy to understand, quickly implemented, and highly effective in spurring economic growth.

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How’d We Get into this Budget Mess?

Making a budget is kind of like trying to lose weight.  If you have ever tried to lose weight, you will find there are a million ways to do so.  You can try this work out or that, this diet or that, or this tool (such as a lap band) or that.  Because all these different options make different people money, the options become more complex.  However, the equation is pretty easy: if you burn more calories than you eat, you’ll lose weight.

Just as money confuses losing weight, politics/power ruin efficient and effective government in Washington.  Government budgets are easy – spend less than you receive.  There are a lot of ways to do that, but we’re still not there.  Instead, games have been played by the Democrats to force Republicans to make the cuts so the Democrats can brand them as the bad guys and try to keep the power through irresponsible governing, inaction, and deceit.

Luckily, there are conservative blogs like this one that tell you the real story about the budget!

Let me walk you through how we got into this budget mess:

  • Federal Gov’t’s fiscal year is October-September.  Last year, the Democrats (who owned the House, Senate, and Presidency) did not pass a budget before the year started.
  • After Democrats lost the election, they passed a budget during the lame duck session (time between election and when election winners take office in January), but the budget was only to last until March 8.
  • When Republicans took over the House, they passed their own budget for the rest of the year that had $61 billion in cuts to discretionary spending (which had seen an 83% increase under Obama).
  • The Senate is supposed to either pass it or pass their version of it and send it back to the House (to begin the negotiating process).  After about 1.5 months, the Senate didn’t pass anything.
  • Approaching a deadline, Republicans in the House extended the budget for another two weeks to give Democrats time to either pass their budget or create their own budget.
  • The Republicans made an offer, but Democrats didn’t like it.
  • President Obama sends VP Biden to met with the House leadership – Biden has one meeting and then leaves the country for two weeks.
  • Approaching another deadline, the Republicans extend the budget another 3 weeks.
  • This Friday, we are now facing yet another deadline and the Democrats still haven’t proposed anything.  There is even Democrat leaders on record saying they are hoping for a shut down to make Republicans look bad.
  • On Tuesday, President Obama had one meeting to discuss the budget and then he left town.
  • Today (Wednesday), most likely bothered by the bad press, President Obama decided to come back and now had another meeting tonight.  Earliest reports indicate they didn’t reach a decision and are talking about another extension to give them more time to figure out the budget.

A few facts to think about:

  • Republicans’ $61 billion in cuts proposal in a $3.5 trillion budget is about 1.7% of the budget.
  • The $3.5 trillion budget has a $1.65 trillion deficit – $61 billion is about 3.7% of just the annual deficit.
  • It took 3 deadlines before President Obama decided to step in.

Democrats have had every opportunity to make a budget and they have not.  If there is a shut down, it is the Democrats fault.  It is amazing that the Democrats still own the Senate and the White House and we don’t know their plan.  Even more amazing is that instead of the Senate passing their own version and starting the debate publicly, 3 people (Obama, Boehner, and Reid) have to sit in private to negotiate a $3.5 trillion budget.  Where are the elected officials from other states?

On the bright side, although the Democrats did not pass a budget on time last year, Republican Paul Ryan has already proposed a budget for next year that actually tries to curb spending.  I am still waiting to hear a real Democrat plan…if they have one.

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Capitalism Isn’t Always Pretty, But It Works!

I am not going to respond much to President Obama’s State of the Union, but I do want to point out that his main way of producing jobs is through government intervention.  He is trying to micromanage macroeconomics and I just do not believe it will work because I believe in Capitalism.

A few years ago, I had the great opportunity to watch my nephew play youth soccer.  I got there a little late, so I asked my brother what the score was only to find out they weren’t keeping score.  I was totally shocked that they weren’t keeping score; were they afraid that the kids couldn’t handle losing?  Were they afraid that the PARENTS couldn’t handle losing?  As I look at our current political landscape, it appears that people are afraid of failure or going through tough times, even if it makes them stronger.  Our inability to handle tough times is bankrupting our country and not allowing us to truly recover.

Capitalism is based on private ownership and free market principles.  Capitalism believes that a market will produce a need and companies should compete to fill that need.  Facebook figured out that people had a need to be part of a community, Google figured out that people needed to search for information more efficiently and both companies filled those needs.

Fuel efficiency is one of the only areas of a car that hasn’t gotten better over the years.  Our government subsidizes gas so that we don’t have to pay as much as Europe, which costs a lot of money.  Further, they have done “Cash for Clunkers” (which costs a lot of money) as well as other subsidies to try to create a market need for hybrid cars.

Instead of spending all of that money, they should simply stop subsidizing so much and if gas prices went up to $5/gallon, there would definitely be a market need for more fuel efficient vehicles.  The problem is that it would be too hard on people, take too long to fill the need, and politicians would stand up courageously and say, “I’ll take care of you” for everyone who cannot handle the tough times.  Our economy could be 10% more prosperous and productive with more fuel efficient vehicles, but our government will not get out of the way to produce long-term benefits.

Our government is trying to create artificial markets to create jobs rather than letting companies fail so that new and better ones can come forward.  Would it be so bad if we had banks that said, “No” to someone wanting to buy a house they cannot afford, instead of bailing out banks that are ruining the lives of millions of families that do not know better?  It would be hard to hear “No,” but it would also be good to hear “No” as well.

Capitalism isn’t always pretty because sometimes people lose.  However, what happens more often than not is either the company that failed or a new company figures out a better way to make a great product or service after learning from the failure.  It is in this failure that innovation happens, not in government programs; the failure alone produces the market need for creativity.

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The Struggles of Cutting the Budget

Talk to anyone and they say, “We need to cut spending!”  If everyone agrees, why doesn’t it happen?  I believe it is a struggle to cut the budget because our governmental system has compartmentalized our citizenry.

When our government started, it was simple.  Tax revenue went towards things like roads, standing army, police, and a judicial system.  All of these benefits were accessible to all citizens equally.  Everyone could use the roads, was protected by the army and police, and got a fair day in court.  Now, however, there are numerous entitlement programs and tax incentives for various groups.

Over time, our politicians have tried to protect/bribe different classes of people.  If you earn a lower income, you don’t have to pay taxes and you get welfare.  Elderly citizens get social security.  If you own a business, you get to write off a ton of expenses.  If you are married, you get an extra tax break.  If your income is from capital investments rather than a paycheck, you pay less taxes.  There are many little discrepancies in our confusing budget and tax system.

Have you ever noticed that the debates are seldom on whether we should cut or raise the budget or taxes?  Rather, they debate on who should get the budgetary cut or who should get the raise in taxes.  The reason it is tough to cut the budget is because you have to single out a certain group to reduce the budget.  That group will then say that they are being “targeted” or that it is “unfair.”

If Republicans try to cut welfare, Democrats say they are being mean to the poor.  If Republicans try to cut Social Security, Democrats say they are mean to the elderly.  Because politicians are more concerned with getting re-elected, it is not worth it for them to single out a big class of people.

Further, this compartmentalizing has trained people to vote for the person that is going to get them the most stuff.  Did you know that 40% of adults last year did not pay income tax?  Why would those citizens vote for a candidate that is going to make them pay taxes?

I do not believe politicians should have the moral authority to determine which class of people deserve extra benefits and which ones do not.  I do not believe that our government system was based on treating everyone different, but rather treating everyone fairly and equally under the law.  I do not believe these things because I want to protect the “rich,” but because I want to protect everyone from an unfair system that will ultimately hurt the entire citizenry of the United States.

In the next session of Congress, don’t listen to the lies and politics.  Be understanding that tough decisions are going to have to be made and certain groups may have to take more of a hit because of our current system.  Continue to vote for the conservative candidates that wish to make our government simpler and smaller.

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Why I’m Worried!

I had a liberal friend of mine ask me, “Why are you so worried about this healthcare bill?”  President Obama asked the same question, making the same joke twice about no meteors falling from the sky and that it is not armageddon.  When I sum up my thoughts on why I am so worried about our country and this bill, it essentially comes down to trust.  My trust has been broken by all of the broken programs that are filled with broken promises that are now financially broke.

There are two main reasons I am worried: past failures and current spending trends.

Past Failures:

It is difficult to say exactly what is going to happen with healthcare.  I have my viewpoints, but I cannot know for sure what is going to happen.  I can merely take what has happened in the past as an indicator of what is to happen in the future.  Here is what I have seen in the past:

  • The U.S. Postal Service was established in 1775 and has a projected loss of $238 billion over the next decade.
  • Social Security was established in 1935. Some experts say it is already broke, while others state that it will be broke in 2018 because there is a reserve fund that isn’t gone yet.
  • Fannie Mae was established in 1938 and Freddie Mac was established in 1970.  In my opinion, they caused the housing crash and they are broke.
  • “War on Poverty” started in 1964. Around $1 trillion each year is transferred to “the poor” who now feel entitled to programs.  In 2008, we still had 17.9% below 125% of poverty level.
  • “War on Drugs” started in 1969 and right now 40% of our penal system is people in for drug use.
  • Medicare and Medicaid were established in 1965. If you were to include the money they owe doctors and hospitals, they have an extreme amount of debt.
  • The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before.

As you can see, this is not a Republican or Democrat issue, this is a government issue.  All of these programs have had years to be fixed by politicians and they just keep getting worse.  I simply do not trust that our government will do a good job with healthcare.

Current Spending Trends:

Over time, our government has continued to expand regardless of what party was in control.  Most people do not realize that our debt is getting so bad, that we may never be able to pay it off.  If our credit rating gets bad enough and countries do not think we’ll be able to pay it back, countries will stop lending to us.  I want to illustrate our unsustainable trends through charts.  While the trend shows that it is a government problem, not only an Obama problem, the failure of Obama to stop this trend and actually make it worse is what concerns many people.

It is pretty easy to see that we have a spending problem.

As you can see, our taxes continue to rise over time.


The CBO projected in January of 2009 that each person would have to pay $56,000 to pay off our debt.  That number rose to $72,000 in March, and now they are projecting that number will be at $170,000/person in 2020.  Some analysts think this number is conservative and that it could be much higher.

The bottom line is that conservatives are not just angry about the healthcare bill, they are angry and worried about the future of our country as a whole.  Looking at our past programs’ failures and our current spending trends, I think it is fair and logical to be worried…I know I am.

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Iraqi Voters Show Bravery

Iraq had their second national election since the overthrow of Saddam and most would agree that it was a success. Millions of brave voters showed up, despite many warnings of violence. The United States armed forces and the Iraqi Security Force performed beautifully. Iraq has many dynamics that make every election interesting.

While Iraq is 94% Muslim, there is a drastic amount of infighting between the Shiite Muslims and the Sunni Muslims. Saddam was a Sunni and his policies heavily favored the Sunni Muslims. However, now that Iraq has a democracy with majority rule, the Shiites (60-65% of the population) have more power than the Sunni’s (32-37% of the population).

In 2005, a group of Sunni’s bombed a Shiite mosque right before the election and many Sunni’s boycotted the election. While the votes and polls have not been tallied, early reports show that Sunni’s participated in greater numbers this year than in the 2005 election.

The Sunni’s participation could be a sign that the Iraqi people are starting to see that you really can make change by showing up to the voting booth vs. using violence to show discontent. In Iraq, they have proportional representation. In short, if the Sunni’s get 30% of the vote, they get 30% of the Congressional seats. It is not like the United States where the Green Party could get 10% of the votes and get zero seats. With their parliamentary system, it encourages each sect to vote to ensure they get representatives.

No country, including the United States, is good at “nation building.” That being said, it is a wonderful sight to see the empowerment of a nation embrace democracy. It helps us all cherish the freedoms we have in the United States. I wish I could go back to late 1700’s and early 1800’s and feel what it means to go from tyranny to freedom and have that vote be the sign of change to come; to feel the power of knowing that your opinion matters and that the government should fear the people, and not the other way around. Today was a great day for democracy around the world.

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Personal Responsibility/Self Discipline…America Misses You

In the last two days, I have had two things happen that have helped me to see the importance of personal responsibility.

Yesterday, I met with a mortgage lender to understand what amount I could get for a loan.  I was quite surprised by the fact that I was approved for a loan that was much more than we could afford.  It made me realize that I could get into a lot of trouble if I wasn’t careful.

Today, I was reading an article about obesity and according to the World Health Organization, by 2015 2.3 billion adults will be overweight and 700 million will be obese.

While these two thoughts are completely different, they both deal with personal responsibility.  Currently, Congress seems to be on a path to pass laws that protect us from ourselves, such as the proposed laws to ban soda from school cafeterias or trans. fat from food.  Regardless of how many laws Congress makes up, they’ll never be able to protect people from themselves. Period.

Self discipline has deteriorated so much that the personal responsibility has been replaced with a sense of entitlement.  People feel they are entitled to welfare checks, free health care coverage, a good paying job, and a college education.

Politicians bank on this entitlement to get into office by promising the world to voters.  The message resonates with people because they feel they deserve all of the items being promised.  Congress is spending billions of dollars to help people w/o addressing the root cause.  The days of “Ask not what your country can do for you, but what you can do for your country” are long gone.

It is easy to sit here and complain about this, but this strong conservative blog always tries to have solutions to go along with the issues.  For the time being, I think there are some things we can do, such as tackle welfare reform. In New York City, they were able to cut welfare recipients down by 50% during the late 90’s with work requirements, imposition of sanctions, and mandatory workfare jobs. I will get into this more in future posts, but essentially, the government took a firm stance that you at least need to try to get a job to get a free check.

For the future, I think our educational system needs to focus on teaching innovation and leadership, along with the basics.  With a more volatile job market, people need to learn how to promote and motivate themselves.

Lastly, I believe that everyone has a circle of influence and that we can encourage those around us to be self-sufficient.  I believe that parents can teach the valuable lesson that you have to work hard to make it and that life is not always fair.  I really do believe that teachers and school boards can implement education policy that teaches leadership and self-motivation.  I believe that coaches of youth leagues can keep score to teach kids (and parents) how to win and lose.  Also, I believe there are politicians out there that can inspire us to be better.  I hope they do not take the easy way out and promise what they cannot give, but motivate people to be their best.

We can either take responsibility for our future and lead our circle of influence or we can be complacent/hypocritical and complain about all the people who do not take responsibility.  It is kind of like all the people who say they hate people who judge others, even though they are judging that group of individuals themselves.

This is your time to change your routine, even if it is mentoring one person, so that we can begin to mold this country.

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Health Care Legislation Context Makes Summit Moot

This conservative blog has stayed busy reporting when President Obama fails to keep his campaign promises.  During Obama’s campaign and his State of the Union Address, President Obama stated that he was going to tear down the walls in Washington and get both sides to work together.  President Obama did get both sides in one room during the Health Care Summit and I commend him for that.  However, I do not think it torn down many walls.

Republican’s big problem with President Obama’s approach is that he thinks that every time someone disagrees with him, it is political and not genuine disagreement. The big headline from the Summit was when President Obama said to John McCain, “The election is over” after McCain tried to make an argument for starting over in health care, being that Republicans have been left out of the process.

In November, the House passed their version of the health care bill (H.R. 3962) 220-215, with 39 Democrats voting “nay” and only one Republican supporting the bill.  The Senate passed their version 60-39 in December, with zero Republicans supporting the bill (one was absent during the vote).  Then, Democrat representative from both Houses sat behind closed doors to produce their final health care bill, deliberately leaving out Republicans.

Once the Democrats essentially had their final bill, they held the Health Care Summit.  When Republicans asked to start over, hoping to have an opportunity to be a part of the process this time , President Obama stated “We cannot have another year long debate over this.  If we can’t [agree on something in the next several weeks], then we’ve got to make some honest decisions, and that’s what elections are for.”

Because Democrats refused to let Republicans play a part in the process and were unwilling to be swayed by Republican ideas during the Summit, it was somewhat pointless to have the Summit.  Congresswoman Michelle Bachmann said, “We accomplished more at the White House Beer Summit than we accomplished today at the White House Health Summit.”

I do think the elections will help Democrats see who supports their Health Care bill and I do not think President Obama will like the results.

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Toyota Faces Big Bad Congress

Akio Toyoda, the CEO of Toyota, faced Congress to discuss the unexpected acceleration problems that some models of Toyota have suffered.  I thought this was completely unnecessary and wrong for Congress to do this for three main reasons.

1. In a capitalist society, the markets punish poor performance.  Toyota sales have plummeted as a result of the all of the recalls – the markets truly penalized Toyota.  If there was malice intent on making poor brake pedals in order to intentionally harm people, I think the government should be involved, but it would be the police or an attorney general, not Congress.  Toyota has offered a recall and promised to right the wrong.

2. If Congress believes that it needs to increase regulations on faulty vehicles to protect it’s citizens more aggressively, they should do what is in their scope and pass new laws.  The idea is that laws should give big enough penalties to deter bad behavior and if they do not feel our laws are tough enough, then they should act.  They do not need to bring in executive leadership of one private company.

3. Lastly, now that our government owns GM, it would seem to me that it is kind of a conflict of interest for representatives to attack Toyota.  Additionally, a few of the representatives have car plants in their district representing GM, Honda, Jeep, and Dodge, which would also seem like a conflict of interest.  Not to mention that Toyota does not have union labor and many representatives have bias towards unions.

I was impressed by Akio Toyoda’s presentation.  He showed sincere remorse and I believe he will do what he can to fix the problems.  Additionally, there is obviously a great financial incentive for the company to improve their operations.  This conservative blog was a little embarrassed by our representatives, who were grandstanding and trying to do their best “look tough” impressions in the spotlight.