Tag Archives: Economy

News

Republicans rebuff Obama’s call to raise taxes on small business

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First, an article explaining how the Obama administration wants to raise taxes on small businesses.

Excerpt:

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

Geithner’s explanation of the administration’s small-business tax plan came in an exchange with first-term Rep. Renee Ellmers (R.-N.C.). Ellmers, a nurse, decided to run for the U.S. House of Representatives in 2010 after she became active in the grass-roots opposition to President Barack Obama’s proposed health-care reform plan in 2009.

“Overwhelmingly, the businesses back home and across the country continue to tell us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainties that our businesses face is keeping them from hiring,” Ellmers told Geithner. “They just simply cannot.”

[…]When Ellmers finally told Geithner that “the point is we need jobs,” he responded that the administration felt it had “no alternative” but to raise taxes on small businesses because otherwise “you have to shrink the overall size of government programs”—including federal education spending.

So what about the Republicans in the House? Are they going to cave in to the Democrat demands for more taxes on job creators?

CNS News reports that House Republicans categorically refuse to raise taxes during a recession.

Excerpt:

Two days after House Majority Leader Eric Cantor (R-Va.) dodged the question of whether Republicans would insist that any increase in the debt limit in this fiscal year would be exceeded by spending cuts in this fiscal year, the congressman walked out of debt/budget talks with Vice President Joe Biden, stating he could not continue as long as the Democrats insisted that taxes be raised as part of a budget deal.

House Speaker John Boehner (R-Ohio), meanwhile, maintained that tax increases were off the table and that spending cuts should exceed any increase in the federal debt limit.

“Each side came into these talks with certain orders, and as it stands the Democrats continue to insist that any deal must include tax increases,” said Cantor in a statement released on Thursday.  “[T]he tax issue must be resolved before discussions can continue. Given this impasse, I will not be participating in today’s meeting.”

Both Cantor and House Speaker John Boehner (R-Ohio) have consistently said that any budget deal for the remainder of fiscal year 2011 and a vote on raising the debt limit–from $14.29 trillion to potentially $16.79 trillion (a $2.5 trillion increase)–would not include raising taxes.

After Cantor left the talks with Biden, along with Sen. Jon Kyl (R-Ariz.), Boehner held a press conference and said, “Listen, we’ve got to stop spending money that we don’t have and, since the beginning, the Majority Leader [Canotor] and myself, along with Sen. McConnell and Sen. Kyl have been clear: tax hikes are off the table.”

“First of all: raising taxes is going to destroy jobs,” said Boehner.  “If you raise taxes on the people that we need to grow our economy and to hire new workers, guess what? They’re not going to do it if they have to pay higher taxes to the federal government.”

“Second, a tax hike cannot pass the U.S. House of Representatives,” said the Speaker. “It’s not just a bad idea, it doesn’t have the votes and it can’t happen. And third, the American people don’t want us to raise taxes. They know that we’ve got a spending problem. That’s why Republicans passed a budget [drafted by Rep. Paul Ryan of Wisconsin] that pays down debt over time without raising taxes.”

But what about the Republicans in the Senate? Aren’t they usually more liberal than the Republicans in the House?

CNS News reports that Republicans in the Senate are absolutely opposed to increasing taxes in a recession.

Excerpt:

Sen. Mike Lee (R-Utah) told CNSNews.com that he would “absolutely not” support any tax increases as part of a deal to increase the debt limit.

Lee was asked if he agreed with Treasury Secretary Tim Geithner that revenue increases should be part of a negotiation on the debt limit because spending cuts alone are “irresponsible.”

“I’m fine with revenue increases as long as they don’t involve tax increases. There are other ways of increasing revenue. They could expand their use of federal public land through extension of oil and gas leases and so forth. If they want that kind of revenue increase, I’m all for that,” said Lee after endorsing the “Cut, Cap and Balance Pledge” during a press conference at the Capitol on Wednesday.

Politicians who support the pledge vow to vote against raising the debt limit unless Congress adopts a balanced budget amendment to the Constitution and implements budget cuts and caps on federal spending.

Lee was then asked if he would support any tax increases, specifically.

“No. Absolutely not. We can’t afford a double dip recession right now, and that’s exactly where that would take us,” said Lee.

“You take the same people whose investment dollars are needed to create jobs and you penalize them and you tell them you’re going to get to keep less of your, the rewards from your investment than you would otherwise take – that’s going to chill rather than promote investment. And if you do that, we’re going to have fewer jobs rather than more at a time when we can least afford to hemorrhage jobs.”

House and Senate Republicans understand that we need jobs, and that raising taxes will hurt job creation. Obama’s answer to everything is always more taxing and more spending and more borrowing. The Republicans have got to hold firm and take away his credit card. We need an intervention.

Commentary

Is Obama right to say that technology destroys jobs?

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From the Wall Street Journal, a rebuttal to the community organizer’s latest episode of economic illiteracy.

Excerpt:

Today, a couple of workers can manage an egg-laying operation of almost a million chickens laying 240,000,000 eggs a year. How can two people pick up those eggs or feed those chickens or keep them healthy with medication? They can’t. The hen house does the work—it’s really smart. The two workers keep an eye on a highly mechanized, computerized process that would have been unimaginable 50 years ago.

But should we call this progress? In a sense it sounds like a deal with the devil. Replace workers with machines in the name of lower costs. Profits rise. Repeat. It’s a wonder unemployment is only 9.1%. Shouldn’t the economy put people ahead of profits?

Well, it does. The savings from higher productivity don’t just go to the owners of the textile factory or the mega hen house who now have lower costs of doing business. Lower costs don’t always mean higher profits. Or not for long. Those lower costs lead to lower prices as businesses compete with each other to appeal to consumers.

The result is a higher standard of living for consumers. The average worker has to work fewer and fewer hours to earn enough money to buy a dozen eggs or a pair of shoes or a flat-screen TV or a new car that’s safer and gets better mileage than the cars of yesteryear. That higher standard of living comes from technology. It isn’t just the rich who get cheaper TVs and cars, plus the convenience of using an ATM at midnight.

Somehow, new jobs get created to replace the old ones. Despite losing millions of jobs to technology and to trade, even in a recession we have more total jobs than we did when the steel and auto and telephone and food industries had a lot more workers and a lot fewer machines.

Why do new jobs get created? When it gets cheaper to make food and clothing, there are more resources and people available to create new products that didn’t exist before. Fifty years ago, the computer industry was tiny. It was able to expand because we no longer had to have so many workers connecting telephone calls. So many job descriptions exist today that didn’t even exist 15 or 20 years ago. That’s only possible when technology makes workers more productive.

This is discussed more in Jay Richards’ book “Money, Greed and God“, which is an excellent little introduction to economics meant for Christians. The chapter you want is on “The Materialist Myth”, which is the idea that wealth is only ever shuffled around, and never created.

Commentary

Michele Bachmann: hot photos from her vacation on the beach

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Rep. Michele Bachmann

Before we see the hot pictures of Michele Bachmann from her vacation on the beach, let’s take a look at this Wall Street Journal article and find out what sorts of economics books Michele Bachmann reads on the hot beach possibly in her bathing suit.

Ms. Bachmann is best known for her conservative activism on issues like abortion, but what I want to talk about today is economics. When I ask who she reads on the subject, she responds that she admires the late Milton Friedman as well as Thomas Sowell and Walter Williams. “I’m also an Art Laffer fiend—we’re very close,” she adds. “And [Ludwig] von Mises. I love von Mises,” getting excited and rattling off some of his classics like “Human Action” and “Bureaucracy.” “When I go on vacation and I lay on the beach, I bring von Mises.”

Consider Thomas Sowell’s “The Housing Boom and Bust”. Here’s a photo of that book which Michele Bachmann reads on the hot beach possibly in a swimsuit:

Picture of book Michele Bachmann reads on the hot beach
Picture of a book Michele Bachmann reads on the hot beach

The Wall Street Journal explains more:

As we rush from her first-floor digs in the Cannon House Office Building to the House floor so she can vote, I ask for her explanation of the 2008 financial meltdown. “There were a lot of bad actors involved, but it started with the Community Reinvestment Act under Jimmy Carter and then the enhanced amendments that Bill Clinton made to force, in effect, banks to make loans to people who lacked creditworthiness. If you want to come down to a bottom line of ‘How did we get in the mess?’ I think it was a reduction in standards.”

She continues: “Nobody wanted to say, ‘No.’ The implicit and then the explicit guarantees of Fannie Mae and Freddie Mac were sopping up the losses. Being on the Financial Services Committee, I can assure you, all roads lead to Freddie and Fannie.”

Consider Walter Williams’ “Liberty vs the Tyranny of Socialism”. Here’s a picture of that book which Michelle Bachman reads on the hot beach possibly in a bathing suit:

Photo of a book Michelle Bachman reads on the hot beach
Photo of a book Michelle Bachman reads on the hot beach

The Wall Street Journal explains more:

Ms. Bachmann voted against the Troubled Asset Relief Program (TARP) “both times,” she boasts, and she has no regrets since Congress “just gave the Treasury a $700 billion blank check.” She complains that no one bothered to ask about the constitutionality of these extraordinary interventions into the financial markets. “During a recent hearing I asked Secretary [Timothy] Geithner three times where the constitution authorized the Treasury’s actions, and his response was, ‘Well, Congress passed the law.'”

Insufficient focus on constitutional limits to federal power is a Bachmann pet peeve. “It’s like when you come up to a stop sign and you’re driving. Some people have it in their mind that the stop sign is optional. The Constitution is government’s stop sign. It says, you—the three branches of government—can go so far and no farther. With TARP, the government blew through the Constitutional stop sign and decided ‘Whatever it takes, that’s what we’re going to do.'”

Does this mean she would have favored allowing the banks to fail? “I would have. People think when you have a, quote, ‘bank failure,’ that that is the end of the bank. And it isn’t necessarily. A normal way that the American free market system has worked is that we have a process of unwinding. It’s called bankruptcy. It doesn’t mean, necessarily, that the industry is eclipsed or that it’s gone. Often times, the phoenix rises out of the ashes.”

Consider Milton Friedman’s “Capitalism and Freedom”. Here’s a pic of that book which Michelle Bauchman reads on the hot beach possibly in a bikini:

Pics of a book Michelle Bockman reads on the hot beach
Pics of a book Michelle Bauchman reads on the hot beach

The Wall Street Journal explains more:

“For one, I believe my policies prior to ’08 would have been much different from [President Bush’s]. I wouldn’t have spent so much money,” she says, pointing in particular at the Department of Education and the Medicare prescription drug bill. “I would have advocated for greater reductions in the corporate tax rate and reductions in the capital gains rate—even more so than what the president did.” Mr. Bush cut the capital gains rate to 15% from 20% in 2003.

She’s also no fan of the Federal Reserve’s decade-long policy of flooding the U.S. economy with cheap money. “I love a lowered interest rate like anyone else. But clearly the Fed has had competing goals and objectives. One is the soundness of money and then the other is jobs. The two different objectives are hard to reconcile. What has gotten us into deep trouble and has people so perturbed is the debasing of the currency.”

That’s why, if she were president, she wouldn’t renominate Ben Bernanke as Fed chairman: “I think that it’s very important to demonstrate to the American people that the Federal Reserve will have a new sheriff” to keep the dollar strong and stable.

[…]Ms. Bachmann attributes many of her views, especially on economics, to her middle-class upbringing in 1960s Iowa and Minnesota. She talks with almost religious fervor about the virtues of living frugally, working hard and long hours, and avoiding debt. When she was growing up, she recalls admiringly, Iowa dairy farmers worked from 5 a.m. to 10 p.m.

Her political opponents on the left portray her as a “she-devil,” in her words, a caricature at odds with her life accomplishments. She’s a mother of five, and she and her husband helped raise 23 teenage foster children in their home, as many as four at a time. They succeeded in getting all 23 through high school and later founded a charter school.

Michele Bachman is actually willing to pass a lower corporate tax rate than even Tim Pawlenty’s 15% rate:

If she were to take her shot, she’d run on an economic package reminiscent of Jack Kemp, the late congressman who championed supply-side economics and was the GOP vice presidential nominee in 1996. “In my perfect world,” she explains, “we’d take the 35% corporate tax rate down to nine so that we’re the most competitive in the industrialized world. Zero out capital gains. Zero out the alternative minimum tax. Zero out the death tax.”

The 3.8 million-word U.S. tax code may be irreparable, she says, a view she’s held since working as a tax attorney at the IRS 20 years ago. “I love the FAIR tax. If we were starting over from scratch, I would favor a national sales tax.” But she’s not a sponsor of the FAIR tax bill because she fears that enacting it won’t end the income tax, and “we would end up with a dual tax, a national sales tax and an income tax.”

Her main goal is to get tax rates down with a broad-based income tax that everyone pays and that “gets rid of all the deductions.” A system in which 47% of Americans don’t pay any tax is ruinous for a democracy, she says, “because there is no tie to the government benefits that people demand. I think everyone should have to pay something.”

On the stump she emphasizes an “America-centered energy policy” based on “drilling and mining for our rich resources here.” And she believes that repealing ObamaCare is a precondition to restoring a prosperous economy.

[…]Ms. Bachmann also voted for the Republican Study Committee budget that cuts deeper and faster than even Mr. Ryan would. “We do have an obligation with Social Security and Medicare, and we have to recognize that” for those who are already retired, she says. But after that, it’s Katy bar the door: “Everything else is expendable to bring spending down,” and she’d ax “whole departments” including the Department of Education.

Below are some links to learn more about Michele.

Campaign speeches, interviews and debates

Speeches:

Reactions from her recent debate performance:

Profiles of Michele Bachmann:

And here are some of her media interviews and speeches in the House of Representatives.

You can contribute to her campaign right here. You can be her friend on Facebook here and also here.

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And tweeted by Kathleen McKinley and Robert Stacy McCain.

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