Reducing The Payroll Tax As A "Jobs Creator" Perfectly Illustrates What's Wrong With Democrat Thinking

The "Payroll Tax Reduction" is one of the major tax reductions that Democrats support. But there are THREE HUGE PROBLEMS with their claim that it creates jobs.

Problem #1: IT IS NOT A JOBS CREATOR! Reducing the payroll tax does NOT increase businesses' profits and therefore does NOT give them more money with which to hire people. What's reduced is the amount employees pay into Social Security and Medicare. The payroll tax is money the employer withholds from its employees and sends to the government. It is NOT the company's money. The employees get a bigger paycheck but it has no direct effect on the employers' profits nor therefore on their ability to hire more people. It is NOT a jobs creator for the companies who send less money to the government because its their employees' money that's no longer sent to the government, not the employers' money.

Problem #2: TO THE EXTENT THAT THIS INCREASE IN TAKE-HOME PAY IS SPENT BY EMPLOYEES AND THEREFORE GIVES SOME COMPANIES MORE PROFITS FROM INCREASED SALES, IT DOES NOT LEAD THOSE COMPANIES TO HIRE PEOPLE! This tax reduction is clearly temporary. What Democrats don't seem to understand is that temporary tax reductions don't help create very many jobs. The reason: Employers may have more money (from higher profits on increased sales) but they know two things about that. First, next year when the tax returns to normal levels people will stop spending more so the companies' sales will go back down. Second, the consequence of that is, if the company hired more people while the payroll tax was decreased, they'll have to fire those whom they hired whent the tax goes back up. This is the pitfall of temporary tax decreases (regarding jobs creation) that Democrats completely don't get. TEMPORARY TAX DECREASES DO NOT INSPIRE COMPANIES TO HIRE MORE PEOPLE BECAUSE THEY KNOW THEY'LL JUST HAVE TO FIRE THEM ONE YEAR LATER WHEN THE TAX GOES BACK UP. No manager with an ounce of common sense will hire people when he/she knows he/she will have to fire them a year later!!! What is so hard to understand about this?

Problem #3: THIS TAX REDUCTION MAKES THE SOCIAL SECURITY AND MEDICARE SOLVENCY PROBLEM WORSE! This is not a free money tax reduction. It has consequences. Since this payroll tax money is what supports Social Security and Medicare, federal revenue into Social Security and Medicare DECREASES!!! What is it about this that Democrats don't understand? When they decrease the payroll tax they make the Social Security and Medicare insolvency happen SOONER!

This perfectly illustrates the most key difference between Democrat and Republican approaches to stimulating the economy. Republicans know that a temporary tax reduction does not create jobs!!! Watch the kinds of tax increases or decreases that each party supports. Democrats like temporary tax reductions (erroneously thinking that creates jobs when it doesn't) and permanent tax increases (to fund more and more entitlements regardless of the fact that entitlements are sucking the financial life out of our economy). Republicans like the opposite ... permanent tax reductions and only temporary tax increases for reasons and logic stated above. The Republican approach creates private sector jobs and reduces government jobs. That is simple fact. The Democrat approach reduces private sector jobs and increases government jobs ... which in turn creates a permanent bigger tax burden on citizens to pay for those government jobs. That is also simple, logical fact.

The Absolute Absurdity Of Democrat Claims About Republicans' Willingness To Reduce The Debt

First, please read this:
http://www.nationalreview.com/articles/284052/norquist-myth-charles-krauthammer

So, President Obama IGNORES conciliatory agreements by Republicans on reducing the debt, even those by his own commission created to find solutions, and then blames Republicans for things they did NOT do.

The article above provides sufficient PROOF that Republicans are NOT opposed to tax changes that reduce the debt. In fact, it's Democrats who oppose such changes, especially Obama. The tax changes they support such as repeal of Bush's tax cuts and taxing the rich more would barely put a dent in our debt problem but claiming the untrue opposite is a populist message that buys them votes. (Which goes to show how shallow-thinking we Americans have become.) Republicans oppose such changes largely because they won't really fix our problem. They're changes that are nothing more than window dressing on a problem Democrats not only created but are choosing(!) to ignore. Talking about Republicans in such ways is a useful distraction from discussing the changes that are actually needed but are too painful for Democrats politically. After all, attacking Republicans is more fun than attacking the root causes of our problems.

It IS true that Republicans are most focused on reducing spending but that does NOT mean they're opposed to tax changes that substantially reduce the debt. Democrats are focused on tax changes that sound good as partisan political talking points but which do very little to control our debt and, arguably, will likely make it worse. As the above article points out, it is entitlements that are driving our debt the most and will crater our economy SOON if we don't rein in such spending. Even Obama TALKS about entitlement spending as THE problem but he's unwilling to support changes that FIX the problem. Talk is cheap but it apparently buys votes.

One has to wonder why he and most Democrats in congress do that? The answer is very, very simple. ALL THE BIG ENTITLEMENTS AT THE ROOT OF OUR PROBLEM (INCLUDING THIS RECESSION!) WERE CREATED AND MISMANAGED BY DEMOCRATS. Therefore, they are fundamental to keeping Democrats in office. (See the details in my November 22, 2011 blog.) The Democrat agenda is heavily rooted in entitlements for too many people who are unwilling to take responsibility for their own lives. The growth of entitlements is what keeps Democrats elected. That they're willing to trade the economic security of our country for votes ought to disgust us all.

Big and BIGGER government is not the answer. A healthy capitalistic (ie, FREE!) economy IS. More private sector jobs, smaller government and much smaller entitlements will stop sapping the financial life out of our economy and return it to a healthy condition that can support sensible entitlements.

I'm Thankful And Fearful For Our Country

I'm thankful for the blessings of liberty and freedom. At the same time I'm fearful where we're headed. So, my prayer today is twofold. It's partly of gratitude for where/when I live and the blessings derived from that, especially the opportunity to worship God as I please and for my sweet wife and three kids. It's also partly for freedom to prevail over the winds of progressive change for the worse.

To understand what I mean by the latter part of my prayer read this:
http://www.nationalreview.com/articles/283326/what-constitutional-conservatism-yuval-levin

One thing that's odd about what Mr. Levin says is that pretty much all people from other countries 'get it' (about our liberty and freedom) better than most of us Americans. We should be alarmed at these winds of change that will blow us in directions that are SO not good for the cause of freedom here. Too many Americans don't understand the consequences of these changes or what's at stake.

So, my followup prayer is for Americans to wake up ... thank God Almighty for our blessings and smell the flowers of liberty that our founders sewed for us.

The Quackery Of The Progressive Approach To Economics and The Economy

This link describes Progressives' nutty if not completely nonsensical approach to economics very well.
http://www.nationalreview.com/articles/283666/obama-s-economic-quackery-victor-davis-hanson

So now we have three years (five years if we include the first two during which Democrats controlled congress) of actual results on which to base an assessment of where the Progressive Socialist agenda leads ... invariably so if you study the history of progressivism and socialism.

The choice between capitalism and progressive socialism couldn't be clearer, nor could the consequences of each choice. Can anyone rationally and with a straight face claim that three years of Obama's Progressive 'solutions' leaves us better off than we were three years after Bush's 2003 biggest tax cuts (ie, record high revenue and very low unemployment)?

All the government programs (ALL are entitlements) that caused this recession and are about to bankrupt our country are Democrat creations: Sub-Prime Mortgages (root cause of the recession), Social Security, Medicare, and Medicaid. And don't get me going on the results of 30 years of Democratic control of our education system. Democrats created and mismanaged them ALL. And they claim that all our economic problems were caused by Republicans! Are they totally insane?

It's No Wonder Democrats Are Objecting To Opposition. They're Used To Getting Their Way!

Democrats are blaming Republicans for vigorous opposition to compromise the way Democrats want. What they fail to recognize much less acknowledge is that they've pretty much gotten their way on important domestic program issues the past century. Now that they're finally receiving strong resistance to their progressive agenda they're whining about not getting their way for a change. Consider these points:

• Our country is going bankrupt because of the ridiculous cost of social programs that Democrats created by running over Republican opposition.
•  The Sub-Prime Mortgage entitlement that was the primary cause of the current recession was created and mismanaged by Democrats.
• Social Security, Medicare and Medicaid that are about to bankrupt our country were all created and mismanaged by Democrats.
• There was Republican opposition to all of the above programs and there were reform attempts by Republicans but Democrats steamrolled right over that.
• It is the SPENDING on all the above TOTALLY PROGRESSIVE PROGRAMS that's causing our problems. Even in the bad economy we have today federal revenue is HIGHER than it was when Bush took office! Revenue and taxes are NOT the main problem! HELLO!
• Republicans HAVE compromised on tax/spending issues many times in the past and what happened? Democrats gleefully took the tax increase concessions yielded by Republicans but ALWAYS(!) refused to honor their promises of lower spending in return. Democrats ALWAYS got what Republicans compromised on. Republicans NEVER got what Democrats promised in return.
• You think Republicans have had equal opportunity to fight off that progressive social legislation that we clearly can't afford? Think again. Democrats have held a veto proof majority in one or both houses of congress nearly half of my 60 years while Republicans have had that ZERO times in either house! Just how much opportunity have Republicans had to get their way really? Which is the ONE PARTY that has actually had enough power/control to reign in these programs and avoid our current problems including this recession?

Okay, now Republicans are standing firm in their insistence on spending cuts FIRST! Why in the face of all the above history is anyone surprised? Democrats have directly caused this Republican intransigence by never holding up their end of compromises on social program spending vs revenue.

It is PROVEN FACT that no amount of tax increases on the rich will fix this problem we have (out of control spending and $15 Trillion debt) yet Democrats keep insisting on it. Therefore, what they're insisting on isn't even logical, much less rational!!!

All respected economists agree that our biggest problem is spending. Rational people ought to attack that first and as aggressively as possible but Democrats refuse to do so unless they get a tax increase. They're so used to always getting tax increases that they seem to think it's their God-given right even though it makes no sense as a fix for our problems. Republicans are supposed to trust them that if Republicans give Democrats their desired tax increase, Republicans can count on support for spending cuts? Based on what historical evidence that they have any desire to honor their promises?

Democrats insist on tax increases even though historical facts show that Bush's tax cuts resulted in the immediate improvement of both employment and federal revenue. (See my many previous blogs for proof of this ... if you're interested in truth rather than propoganda.)

Democratic leadership also insists on no entitlement cuts. That's literally insane because EVERYONE agrees entitlement spending is what's going to bankrupt us AND that higher taxes on income of the rich will hardly put a dent in the problem. Why nearly half the country think that the Democratic position and history in such matters are just fine is a total mystery to me.

Chris' Senior Recital Is Coming Saturday ... YAY Chris!

Chris' Mom and I are heading down to San Jose State University to be there for his recital. It'll be great fun! We're so proud of you Chris!

Bust a chop son! (Isn't that the wind instrument equivalent of 'break a leg' to actors?)  :-)

What About The Power Of Unions Over Government And Elections?

Sovereign states ought to, of right, be free (of undo, especially excessive external influences) to conduct their business in due/effective consideration of what's best for their own citizens' short-term and long-term interests. That's not to say national or regional interests should be disallowed from consideration at state and local levels. However, when a nationally-organized and considerably strong special interest pours monumental nationally-derived resources into influencing a state's voting it can make it difficult if not impossible for that state to self-govern in its citizens' best interests. In fact, they become mere pawns in a nationally-organized, nationally-targeted agenda. That's not freedom of the kind envisioned by our founders is it?

The unbalanced biases created by a highly organized external political publicity onslaught in effect renders the state's citizens unwittingly subservient to that external political agenda in the interests of biases not really the citizens' own. Sensible opposing political interests within the community and/or state, lacking the ability to match the national resources coming at it, may find it impossible to mount an effective opposing campaign. The battle is over before it even begins. Brute force wins over sensibility and due, independent and wise consideration.

When a semblance of balance of interests is achievable there's no harm done. In fact, the resulting debate (ie, education on issues) is healthy. But if a national special interest with a virtually bottomless pocketbook lays siege to completely defenseless thinking of a state's population, the result may not be good for the state's citizens. Additionally, such a win can provide important leverage to the national special interest making it easier to expand its agenda elsewhere more easily, including into the courts and congress.

I wonder whether unions are becoming too powerful and influential in gaining outcomes that serve their own interests too much. (What else do they serve, really?) We see what unions have done and are doing in places such as Greece. It's not good for any state in the end, much less a nation. I don't think one special interest ought to have such power to influence outcomes simply by outspending individual states until it gets its way nationally via a simple majority of politically key states. Manipulation of political outcomes on this scale is not ... I say not ... a good thing for our republic.

Citizens ought to be educated on issues, not brainwashed by an unmatchable external(!) onslaught of biased publicity and fact-twisting political machinery. Citizens effectively become mere pawns at the mercy of a national political agenda which they have neither the will nor capacity to assess or resist appropriately by way of their own independent thinking, rationale and effort.

Political interests which have as their goal, the protection of a state's citizens' rights, property and prosperity are doing the good work intended by our founders. Political interests which have as their goal the advancement of their own narrow and selfish interests (invariably at a high price to those who oppose them and to those who aren't members of their group) have no business exercising the kind of power that unions are trying to exert, indeed succeeding. Conscience and morals do not prohibit them from taking whatever they are able to from non-members or even from their own unwitting members. Whatever they can get away with in the near term is by their definition (which is the only one that matters to them) good, regardless its long-term consequences to the community, state or nation. Even regardless the long-term consequences to their own group/organization.

Thoughtlessly killing the golden goose is never an issue with them as long as there's goose on the dinner table this week. We should be asking the average Greek or citizen of other EU countries in a similarly precarious economic condition, how it has worked out for them!

To Democrat Leadership: Why So Mum About The Occupy Folks?

While the TEA Party protests were gathering steam Obama, Pelosi, Reid, and other Democrat Leadership wasted little time condemning that and demanding that it stop. Obama said he wanted us to be quiet. Pelosi called us un-American. Various Democrats called us haters. They demanded we be civil as if we weren't already. We even cleaned up after ourselves everywhere in American that we assembled.

They all said we lacked a sensible cohesive point. Yeah, I guess that wanting lower spending, lower debt and lower taxes are pretty much the opposite of what we've been needing. It's pretty clear we were all pretty wrong, huh? Not just wrong but stupid if not insane.

Fast forward to the Occupy movement. Let's see, hundreds if not thousands arrested. Public and private property destroyed. Burning stuff on the streets. Disallowing the public from using public places they pay for. Hateful messages from far too many of them including racist rants. Anarchists abound and act out in outrageous ways.

So, where's your outrage over the Occupy outrages Democrats? Oh, I get it! THAT'S YOUR BASE. Don't want to offend THEM (especially all the unions that are participating) in spite of their outrageous behavior. Your hypocrisy and knuckleheadedness are showing! Again!

Tell Me Again, Which President's Economic Policies Actually Worked?

By this time after the biggest part of Bush's economic (tax) policies went into effect (ie, on May 28, 2003) the unemployment rate had decreased to Clinton levels(!) of 4.4% which, in turn, produced federal revenue that was a record $2.4 Trillion (in fact, 25% higher than Clinton ever achieved).

Undeterred by facts, liberals (especially progressives) still claim that Bush's tax policies did not work but Obama's policies have worked even though unemployment is still stuck at 9% (with commensurately lower federal revenue), over twice as high as what Bush achieved!!! I completely don't understand how that's rational.

To liberals I say, argue what you will philosophically about whether you think tax cuts help the economy but please recognize that if you claim Bush's tax cuts didn't help, you do so in total denial and contradiction of actual historical facts.

Hypocrisy And Unfairness Of the Media And Liberals

Isn't it interesting how The Media and liberals have been spinning these "Occupy ..." protests? Their amazing contortions trying to portray these as rational, reasonably well-behaved, possessing legitimate concerns, etc are completely laughable are they not?

Remember how they jumped all over very, VERY mild issues in the TEA Party protests and went out of their way to discredit them and talk endlessly about the most minor things? I guess the TEA Party goals of lower taxes, less spending and less debt WERE complete nonsense, eh? Yeah, those goals are complete nonsense ... we have no need for that at all do we? But the "Occupy ..." folks are completely rational, well-behaved and even noble. Huh? The TEA Party goals weren't anything needing actual attention when the groups started up and those still don't need attention, huh? Totally irrational for sure.

TEA Party protesters all pretty much behaved legally and respectfully of people and property (always cleaning up after themselves, including that very large protest on the national mall last year!). How does that compare with these Occupy protests?

By the way, have you noticed The Media investigations into who is financing these Occupy protests? If you'll check into it you'll find it's a who's who of leading progressive groups/organizations/people. have you heard the hate expressed by the leadership of the unions supporting them?

You want to know what anarchy and anarchists look like? Keep an eye on the Occupy protests and learn. How much property damage is resulting from this? How many arrests have there been? How many business have been hurt, including small and medium businesses that had nothing to do with our economic problems? How can city leaders condone and even support this?

C'mon folks! Can you rationally claim, much less believe, that the TEA Party protesters and their goals were less legitimate, less focused. less clear, and that those protesters were worse behaved? I mean, really!!!

Got an important question for you. Which is the truly "angry mob", the label that congressional democratic leaders tagged onto TEA Party protesters?

The Sad State Of American Work Ethic, Especially With Younger Generations

One of my sons was updating his work history on Facebook recently. The detail he's adding got me thinking about my own work history in similar detail. What I came up with brought me to the realization that the average young person (through age 40 or so) has a much different sense of responsibility than folks of my generation and older.

Here's my list of jobs in rough chronological order:

1. Electrician crew helper at a zinc smelter.
2. Zinc production crew which entailed standing over long rows of cells filled with a sulfuric acid mixture and pulling out metal sheets with zinc plated on them from the electrolysis process. The acid fumes ate through our pants ... a new pair of jeans lasted barely one week. Every night found me treating acid burns on my feet, legs and hands with hydrogen peroxide to neutralize it. It couldn't have been a good environment for my lungs, eh?
3. Electrician crew helper at a lead smelter. One task that lasted three months was inventorying and servicing (mostly lubricating) the hundreds of motors covered in lead dust. We wore no masks in such work. And people worry about minute amounts of lead in anything these days?
4. Forest fire fighter. Probably the hardest work I've ever done. 12-14 hour days in hot and dangerous conditions. Sleeping in paper bags.
5. Timber repair in underground hardrock mine. Dangerous and physically demanding work a full mile underground.
6. Enlisted(!) in US Air Force in the midst of the Viet Nam war. Never made it to Viet Nam but it was an 'interesting' time to enlist in the military. Sometimes I wonder what was I thinking? Most of the time I'm convinced it was both patriotic and (much needed!) maturity-growing.
7. Just a note: My life took a positive turn the first night after I enlisted. From that point on I completely owned responsibility for my life ... what it would or would not become. Below is what followed four years of honorable military service to our country.
8. Computer repair tech for Honeywell. I took a correspondence course in electronics to make that possible.
9. After 4 years of #8 I began taking night classes at San Francisco's Heald School of Engineering.
10. Got married and completed Foothill Junior College's engineering prep curriculum.
11. Transferred to Stanford, getting BS and MS in computer design.
12. CPU designer for Amdahl, the most state of the art computer design company in its day.
13. Various engineering department manager jobs in various high tech companies.
14. Various project/program management jobs in various high tech companies.

The point I wanted to make of all this has nothing to do with bragging or a self-congratulatory attitude. My point boils down to four questions really, comparing how people used to think about personal responsibility with what's going on these days. 1) How many young people in recent generations take real personal responsibility for their lives? 2) How many young people are willing to do physically demanding work if that's all that's available or is about all they're qualified for? 3) How many young people these days would do whatever it takes to earn a living, not expecting anyone else to take care of them or their needs? 4) How many young people do the responsible thing, live within their means and postpone material and other gratification until they're financially and otherwise able to handle it?

What made our country successful through the 1970's or so were strong work ethics, strong sense of responsibility, strong sense of personal accountability, etc. Too many young people these days don't get it and our country will be far worse off for it. We're headed in a really, really bad direction with so many people thinking that others owe them things they haven't earned (entitlement) and that it's okay to mortgage their future (and that of others) for completely selfish and highly materialistic self-gratification in the present. We live in the country with the greatest opportunity to succeed and excel based almost entirely on one's own desire to do whatever it takes. What are people doing to take advantage of it based on a strong sense of personal responsibility, honesty and integrity? What I see going on isn't encouraging about our country's future.

The Alternate Reality In Which Harry Reid And Other Progressives Live

This link pretty much provides the background for the title of this blog:
http://www.nationalreview.com/articles/281911/washington-dems-clueless-jobs-deroy-murdock

We Americans NEED our representatives to understand the reality of situations because we can't trust them to fix problems, certainly not their root causes, properly if they're clueless about what's really going on. Ignorance of the facts on this scale is beyond unacceptable. This guy has no business being in congress, much less being the leader of the senate. Gads!

TO OCCUPY WALL STREET PROTESTERS: CONGRESS (NOT BANKS OR WALL STREET!!!) Caused The Housing Collapse AND, Therefore, The Resulting Recession

THE MOMENT those sub-prime mortgages were signed/approved this recession was guaranteed. It doesn't matter who ended up holding that worthless paper. Yes, Wall Street created packages of these worthless investments AND the insurance policies intended to protect those investments but if they hadn't owned that stuff, someone else WOULD have and the housing market would still have collapsed, taking our economy with it.

So, the only rational argument is which of the following are most responsible for causing those mortgages being created in the first place:

1. The borrowers who actually couldn't afford the mortgage,
2. The banks who lent money to the borrowers, knowing they were risky or
3. Congress who cooked up this sub-prime mortgage scam in the first place and forced banks to approve them.

The common sense answer to the question, who caused the housing collapse and, therefore, our recession, is Congress, PERIOD. If they had never created the sub-prime mortgage program GEARED toward putting risky borrowers into homes, this problem would not have happened. That alone makes Congress most complicit in our economic collapse. However, they then made failure evven more of a guaranteed thing by forcing banks to make loans that banks KNEW were too risky. Here are the facts about that:
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

Fannie, Freddie and various progressive congressmen told banks they were required to make the loans but not to worry because Fannie and Freddie would guarantee the loans. When the government tells you that you must do something or you'll have a big price to pay, what do YOU do?

So, progressives created and pushed the sub-prime mortgage program AND forced banks to loan to people who were unqualified under normal guidelines. How can a rational person say it was the banks' fault?

The last parties to consider as responsible are the borrowers. C'mon folks! When a person without the resources to buy a home is told he doesn't qualify BUT he can have one anyway, what do you expect him to do? Especially if he's a product of a failed education system and can't figure out how bad it is for him to have such a mortgage?

As for the claim that Republican opposition to regulation caused any part of this, that's even worse nonsense. It is progressive resulation that caused this! They're the ones who told Fannie and Freddie what they must do. (News flash: that IS regulation.) And two months before the collapse, it was the progressive (Barney Frank) in charge of regulating Fannie and Freddie who still(!) resisted regulating them because, he said, they were safe and stable and in no danger whatsoever(!) of defaulting. Republicans didn't resist regulating sub-prime mortgages. Progressives did, even when people with half a brain could see the train wreck coming.

It's Hypocritical For Democrats To Denounce Republicans For Wall Street Connections

Bernie Madoff was active in the NASD (securities industry regulatory(!) organization) and served as chairman of the board and on the board of governors of the NASD. All the while he was perpetrating one of the biggest Wall Street frauds of all times. Oh, and he's a Democrat.

Now we hear that MF Global has filed for bankruptcy and that millions of dollars have mysteriously gone missing there. Jon Corzine runs that. He once ran Goldman Sachs before becoming a US Senator and then NJ governor. There don't appear to be any charges against him so far but this is fishy at best. Another Wall Street insider. Oh, and he's a Democrat too.

So much for the Democratic myth that only Republicans are associated with the immoral, unprincipled and illegal things going on in Wall Street. Someone ought to ask the Occupy Wall Street protesters what they think of this.

I think it's time we all took a deep breath and stopped the nonsense partisan rock-throwing. There's plenty of blame to go around. One thing is abundandantly clear. Democrats are on pretty thin ice trying to claim it's only Republicans who are criminally involved in Wall Street excesses.

So if neither party has clean hands, whom do we get to bring sanity and principles to Wall Street? How rational is it to expect it'll get fixed any time soon?