Obama needs to lead on budget cuts.

Thanks to the Des Moines Register for printing the editorial by Peter Morici on 2/16/2013.  (Obama blackmailing taxpayers to stick blame on Republicans – see link below.)  President Obama and other politicians and pundits who say the sky will fall if the sequestration cuts are allowed to go into effect are using misleading fear tactics.  Politicians at all levels of government who don’t want to see spending cuts always say that the services that will be cut are those that are the most needed and the most visible.  Examples include President Obama’s statement in his State Of The Union address: “These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs.”  Agriculture Secretary Vilsack has warned us that layoffs of food inspector will result in food shortages.    A top general stated that troops in Afghanistan will have their stay extended because there won’t be enough money to train replacement troops.  Homeland Security Secretary Napolitano said the we should expect increased wait times in airports due to mandatory furloughs of security staff.

 As Morici wrote:, “It puzzles me how $85 billion in a $16 trillion economy could make such a difference, especially when tax increases of similar size, implemented on Jan. 1 at the President’s behest, had no such similar effect in his mind.”  Why can’t President Obama prioritize the cuts so that less needed services are cut?  President Obama got his tax increases on the wealthy as part of the negotiations to extend our borrowing limit.  Now is the time for him to take the lead and implement meaningful cuts based on priorities.  Everything is not a top priority.  Even entitlement changes, such as continuing to raise the normal retirement age for both Social Security and Medicare, should be on the table.  The debt that we are piling onto future generations is immoral and unsustainable.  It must stop.

Link to Register article: http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2013302160059

We are united!… in loyalty to our Country.

In the Dec. 12, 2012 issue of Cityview, in the “Your View” column, the Rev. Vernon Naffier bemoaned that we are no longer a united nation.  The Pledge of Allegiance, from which several parts of Rev. Naffier letter were taken, is a pledge of loyalty to the United States, not a pledge to agree on collective goals.  I believe that we, the people of the United States, are united in our loyalty to the United States, and against any person or group who would try to harm our country.  But, we are not united on domestic social goals, and there is no reason that we should be.

“Liberty and justice for all” means that our government should treat all of us equally, (no special political privileges for anyone), and that our government should mostly not interfere with the activities of honest and peaceful adults.  The primary and proper role of our government is to protect our pre-existing natural rights and liberties against those who would use force or fraud against us.  “Equal opportunity for all” means that our government should not do anything to prevent or disadvantage any individual or group from exercising their rights and liberties to their own best advantage.

On the other hand, our government should not give special favors or preferences to politically favored groups or individuals.  Unfortunately, throughout a large part of the history of our country, our government has used its force to provide political advantages to self-serving crony capitalists, (as opposed to free market capitalists), and well intentioned collectivists, all under the guise of “providing for the common good or promoting the general welfare.”  We are facing the “fiscal cliff” and can’t agree how to fix it because so many people and groups are recipients of government largess and no one wants to give up their benefits.

We need to dramatically reduce the size and scope of our government.  There are many proper roles for our government.  But, what is considered immoral for an individual to do does not, somehow, become moral simply because it is done by our government and approved by a majority of the people.  Taxes, which are taken by force, should be used only for things that truly are for the common good and promote the general welfare, not those things which benefit politically favored groups.  Unfortunately, I think it will require a major financial crisis, like that being currently experienced by Greece, for us to make the changes necessary for us to have a stable, sustainable government.

Link to Cityview article: http://www.dmcityview.com/your-view/

Obama needs to compromise.

President Obama has built his own wall to prevent agreement to avoid the “fiscal cliff”.  There is no public outcry to raise the 35% top income tax rates on those with the highest incomes.  The outcry is against the 15% – 17% average tax rate paid by the super wealthy like Warren Buffet and Mitt Romney, not against high wage earners who pay 35% on most of their income.  If the 1% paid taxes on most of their income at the current top rate of 35%, there would be no problem.  We need eliminate special interest tax breaks.  For example, carried interest (otherwise known as bonuses for hedge fund managers) should be taxes at regular rates up to 35%, not as capital gains at 15%.  Capital gains should be taxed at 15% only if the gains were earned over a much longer period of time, say 10 years.  Currently, the 15% tax rate is applied to gains on assets held for only 1 year or more.  Eliminate the home mortgage interest deduction on second homes.  Cap the  home mortgage interest deduction to loans of up to $250,000.  There are many other special cases where income is taxed at less than the top rate of 35%.  Those are the special tax breaks that we should look at ending – not raising the top rate.

Don’t raise top tax rates.

I just don’t believe most people think we should raise the top income rate above the current 35%.  All of the examples given are of the super rich, like Warren Buffet and Mitt Romney, who earn millions each year and pay a total tax of between 15% and 20%.  This is the unfair situation that most people think of and most politicians describe when they ask the rich to pay their fair share.  Maybe the easiest way to fix this problem is to revamp the Alternative Minimum Tax.  Why can’t we simply tax all earnings over $250,000, no matter the source, at the maximum 35% rate?  This would include interest earned on tax exempt bonds, dividends, capital gains, carried interest, and any other type of income that is otherwise tax exempt or taxed at lower rates.  It that doesn’t generate enough revenue, then start taking away itemized deductions based on income.  If need be, take away all itemized deductions.

The idea above presumes that we need to increase revenues (taxes) to help solve our deficit problem.  Of course, the biggest cause of our problem is that spending has increased too rapidly.  So, the biggest part of the solution should be to reduce spending.

The chart at the link below shows clearly that our deficit problem is due to uncontrolled spending, not that revenues (taxes) are too low.

Chart showing the history of federal revenues and federal spending:  http://www.heritage.org/federalbudget/growth-federal-spending-revenue