Is it time for a real stimulus bill? 27 August, 2009Posted by David Anderson in Economic Policy, Energy, Jobs.
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After the fiasco in February, the term stimulus bill is a dirty word. Yet, the recent CBO projections sustained high unemployment and larger deficits makes me think that a proper stimulus bill would be an investment. The projected deficit is up by two million million (trillion) dollars before new programs are taken into account because of poor economic performance. The real unemployment rate is said to be 16%. Instead of speaking about raising energy taxes to pay for global warming concerns, income taxes to pay for health reform, income taxes on the wealthy to pay for whatever, payroll taxes on workers to pay for health reform, and business taxes to pay for an aggressive retread liberal agenda, why not first go for economic stimulus?
I want real economic stimulus not the sham of Christmas, Hanukkah, Kwanzaa, and every Special interest lobbyist birthday rolled into one bill. We know what works. Why don’t we do it?
First let’s stop holding up the oil drilling permits authorized under the Bush Administration and mandated by Congress. It will help create downward pressure on future oil prices and create well paying jobs. It will actually bring money into the government instead of spending money.
Let’s do the same for wind farms. While we are at it, let’s create energy enterprise zones where the manufacture of alternative energy qualifies for investment tax credits. Let’s give a huge reward for the better battery.
Second, Let’s continue the payroll tax credit for another year and make it for both the employee and the employer so that the cost of employment is cheaper.
Third, let’s try cash for appliances without the bureaucracy. Energy efficient appliances would help lower energy prices and stimulate the economy. The Cash for Clunkers program was a great idea to move people to more energy efficient cars, but it was very poor in execution. I would love to see the program done again, but if it is announced too early that would depress car purchases. It is best to let it go.
Fourth, ask the Fed to stop the payment of interest on excess reserves. It is stopping the free flow of money and dampening the vaunted multiplier effect.
Fifth, Just eliminate the income tax, payroll tax, and corporate income tax and implement the FAIR Tax. I know that won’t happen with this Congress. In spite of scores of economists saying it would be the best move possible.
Sixth, barring number 5, reinstate the Reagan era investment tax credit and give small and medium business accelerated depreciation options.
Seventh, Make December of 2009 a tax holiday from personal income and payroll taxes.
Eighth, Give huge prizes for the creation of the Better energy storage system, increasing the efficiency of solar panels to 18%, a more energy efficient way to extract shale oil, and a better nuclear waste recycling system.
Ninth, Extend the first time homebuyers tax credit for 5 years.
Tenth, exempt the first 2% of an interest rate in bonds or CD’s from income taxes.
Eleventh, Declare any county with unemployment and underemployment over 10% an enterprise zone where local businesses that expand will get a 5 year investment tax credit in addition to the general one proposed.
Finally, Break the foreclosure cycle by funding state programs that help people by loaning them money interest free to catch up on mortgage payments once they find a new job. Give the banks more incentive to negotiate by reforming the bankruptcy laws to what they were before Jimmy Carter exempted mortgage terms from being changed. Give the banks tax credits to make up for loses in the voluntary modifications.
These proposals would cost a lot less than anything discussed and could in fact be done with the 250 billion set aside for bank relief that the President is thinking of relinquishing. If you want sustained economic growth, you have to build a supply side strategy into the mix. The current stimulus is based solely on the demand side. You have to do both. It is like trying to fly flapping one wing.
Balance, Cut, and Save 26 August, 2009Posted by David Anderson in Action Item, Budget, Tax Hikes.
The Constitution starts with “WE THE PEOPLE” and it’s time you start remembering that.
American families on a daily basis make hard choices in order to live within their means.
Why can’t Congress and our federal government do the same?
I urge you to work towards balancing the budget.
I urge you to cut our taxes so families can save more and to cut the wasteful spending that is mortgaging the future of generations of Americans and severely limiting their ability to prosper.
Instead of your own re-election, put families in your district and state first.
I am signing this simple: “BALANCE, CUT, SAVE” petition because I believe it is these three things that you should remember when making decisions about new spending, taxes and health care in the weeks ahead.
If you stick to these guiding lights, you can’t go wrong.
Mr. President and members of Congress, I’ve kept it simple for you:
BALANCE, CUT, SAVE.
That’s what should guide you in your decisions in the week’s ahead. My family can’t afford the decisions you are making on my behalf so I am signing this petition to remind you of what is important:
My Family, My Country And My Freedom.
A Few Questions for Ben Bernanke 25 August, 2009Posted by David Anderson in Economic Policy.
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Chairman of the Federal Reserve Ben Bernanke has been nominated for a second term. He has a 99% chance of confirmation allowing for a heart attack or complete collapse of the economy. That does not mean he should not be asked to justify a few policies.
The Federal Reserve is paying interest on excess reserves which discourages lending. Then it acts in extraordinary ways to try to pump money into the system such as by purchasing commercial credit. If it went back to not paying interest on excess reserves, the market would correct itself. Why are taxpayers borrowing money at interest to loan to the banks which then do not have to put that money into circulation because they can have a risk free investment where they get paid interest to keep excess reserves (beyond what is required to insure solvency) in the proverbial vault?
It would be nice for him to justify all of the new regulatory powers he requests step by step. The Fed is already the most powerful economic institution in America. Giving it unchecked power directly over the non-banking part of our economy gives a private stock holding corporation direct regulatory enforcement powers.
Who is more likely to be right the CBO or the OMB when it comes to unemployment numbers? The CBO is projecting an average of 9.8% unemployment for next year.
Finally what level of disclosure should the Fed give to the public. There is a move to audit the Federal Reserve. The Chairman opposes it. Fine, what is his counter proposal. We are being asked to give unprecedented powers to a privately held corporation that we don’t even know who all the stockholders are let alone have ever seen its books. Can we at least see the tax money that goes in and leave the rest private?
The good news for the Chairman is that I am not on any Senate committees. It is not that he can not easily answer these questions. It is that he does not desire to answer them. I hope at least one person gives him the opportunity.
Delaware’s Jack Markell a mixed bag so far 17 August, 2009Posted by David Anderson in Uncategorized.
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The Budget was passed on time and balanced (even if part of it was on the already strained backs of taxpayers) and for the first time in a 30 years it was smaller than the previous budget. Real education reform was passed which will test students in real time, reward successful teachers, and cut extraneous regulations. The beginning of a renewable energy industry strategy was laid down. The Economic Development office was reordered to help Delaware businesses as well as attract new ones. The state finances are more transparent to the public and the state government is more open. He has made quality appointments in a state known for a touch of cronyism. For all of these achievements, I applaud Governor Jack Markell.
In spite of his achievements in the first session, I am not ready sign up for the fan club. The governor is undermining the long term economic viability of this state with an energy rationing scheme forcing a 15% future cut in energy sales. He is committed to an insane and unsupported idea of a man made global warming crisis.
Instead of making strategic reordering, the governor tried to make short term budget fixes and long term tax increases which was only blunted by the Republican minority in house. The governor’s agenda to expand gaming lacked economic sense. 3 new casinos would be unsustainable. He would trade short term boosts in revenue for a long run gutting of the goose. He is bent on one of the most radical left wing social agendas in America. He achieved a gay rights victory this session, but was not satisfied. He insisted on going where the legislature specifically rejected when he added “gender identity” to his executive order on civil rights. He undermined efforts in his own Democratic party to protect marriage with a constitutional amendment.
His budget instincts were short term cuts and long term tax increases. If we lose the 2/5’s plus one minority status for Republicans that is exactly what we shall have. Everything has not been openness and light. There have been a few issues still. Some obvious waste is still flowing unimpeded state government.
The Governor has been a mixed bag. It will be interesting to see next session were that mix ends up.
Nationalized Health Care 16 August, 2009Posted by David Anderson in Uncategorized.
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In Britain, health administrators outnumber doctors and nurses.
The biggest bailout yet?? 16 August, 2009Posted by David Anderson in Uncategorized.
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Joseph Murin must have read the inspector general’s report and is retiring from his post as CEO of the Government National Mortgage Association which markets FHA and VA mortgages. It is the only one of the Mae and MAC family that actually has the full faith and credit of the U. S. government.
If the housing market does not turn around, this could be the biggest bailout of them all. That is something we should keep in mind when we have the healthcare debate.
A few facts:
* The agency, which issues the only mortgage bonds to carry the “full faith and credit” of the U.S. government, packaged a record $43.5 billion in federally backed loans into securities in June. The agency’s mortgage bond volume almost doubled in the first half of this year, to $207 billion from $107 billion during the same timeframe a year ago, as the mortgage markets seized and borrowers turned to federally supported mortgage financing.
* FHA mortgages represent about half of new loans for home purchases, up from about 10 percent at the start of last year
Easy as that – 1 in 2 mortgages are now being funneled through the easiest agency to get a loan. And with the cost of living adjustments Congress passed in 2008 to get as many people as possible under government mortgages FHA loans as high as $700Ks are now being placed in states like California.
Kennedy and Dodd Health Bill Attacks Wages 12 August, 2009Posted by David Anderson in Economic Policy, Healthcare, Jobs.
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The Senate HELP committee’s version of Health Care Reform is billed “The Affordable Health Choices Act”. It had better be affordable because if it is implemented it may provide a disincentive to many employers paying higher wages. It gives credits to small employers to help with a mandate of coverage. The problem is that it only covers the micro business side. If you hire 50 people instead of 49 or if you have a lot of high flying sales people and well paid mechanics, you may not want to give a raise to that hard working receptionist. The incentive would be to keep some people with low pay to get the money. I didn’t think that Senate Democrats were so angry at the bottom 50%. Weren’t they suppose help the forgotten middle class? Yet they wonder why we get testy.
To qualify for the credit, employers must have fewer than 50 full-time
employees, pay an average wage of less than $50,000, and must pay at
least 60% of employee health expenses. The credit is equal to $1,000
for each employee with single coverage and $2,000 for each employee
with family coverage, adjusted for firm size (phasing out as firm size
increases) and number of months of coverage provided. Bonus payments
are given for each additional 10% of employee health expenses above
60% paid by the employer. Employers may not receive the credit for more
than three consecutive years. Self-employed individuals who do not
receive premium credits for purchasing coverage through the Gateway
are eligible for the credit.
Require employers to offer health coverage to their employees and
contribute at least 60% of the premium cost or pay $750 for each
uninsured full-time employee and $375 for each uninsured part-time
employee who is not offered coverage. For employers subject to the
assessment, the first 25 workers are exempted.
Levin and a New Isolationism 11 August, 2009Posted by David Anderson in Fair Tax, federal, President Obama, Tax Hikes.
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Some in the administration and the Senate would put America behind a wall of taxation is the new isolationism. The excuse is trying to prevent people from being able to hide income off shore. The truth is the largest forms of tax evasion are local. What this is doing is locking American investors out of the hottest economies in the world. The Levin bill has the backing of the administration which is hungry for new revenue streams.
While it is advertised as punishing countries that use banking laws to shield anonymous investors. Its sweeping language would punish countries that don’t tax dividends and capital gains like Hong Kong and Singapore. It would be a form of economic imperialism. They are responding by threatening to ban U. S. investment. The damage done to their economic system by losing investment of Americans would be far smaller than the damage of hurting both local and global investment by adopting Democratic tax policy.
If other nations follow suit this could be as damaging as Smoot Harwley Act. If we are to ever have a sustained economic recovery, it has to be based upon sound policy not failed ones.
America needs fundamental tax reform designed by clear thinking, real world, economists. We need policies which encourage American production not flight of production. Levin is right that it starts with the tax code. He couldn’t be more wrong about the solution. Maybe would should take a page from the growing economies instead of closing the book on learning.
Tea Party Silent no More 10 August, 2009Posted by David Anderson in Dover, Event.
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Photo By Maria Evans of DelawarePolitics.net
For videos and more pictures go to DelawarePolitics.net
The event was well attended. I don’t know how many people were present do to the fluid nature of the event. I counted around 500 at one point, but with it being a 4 hour event that was only a snap shot I have heard 750 or more. We had the pleasure of meeting scores of our readers and a few of our commenters. That was one of my highlights. Thank you all for attending and a great number of you for participating in our Delaware Politics survey. Maria will tell us if we found Waldo, the insurance lobbyist (who liberals say is behind the movement) at the rally. He certainly forgot to charter the bus or give organizational grants. Hey, Waldo send your grant forms to email@example.com and we will get them out to everyone. (I won’t hold my breath.)
The people who attended were a credit to Dover and the movement. They had spirit but weren’t rowdy. They were attentive, passionate, and looking for information. Book sales were the hot item. I don’t think any one could keep the 5000 year leap or Glen Beck’s Common Sense around for long. I am going to give a review on the 5000 year leap that I obtained in the future. What really impressed me was the way the people took care of the grounds. I had been to many rallies, but this was one of neatest. People picked up after themselves by the time it was over all we had to do was pack up and leave. I didn’t see one piece of trash.
Democrats in House Want 8 New Jets 10 August, 2009Posted by David Anderson in Uncategorized.
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The love some of you may have for Congressperson may be priceless, but their 8 private jets on our nation’s charge account costs $550,000,000.00 before interest. The administration requested 4 for them and that was called and raised. Do you have a feeling that this Congress likes to gamble with how far they push the voters?
Senators are not from safe districts and are getting a little worried. After all if you live by stoking envy and class resentment, you will die by hypocrisy.
“The whole thing kind of makes me sick to my stomach,” said Sen. Claire McCaskill (D., Mo.) in an interview Sunday. “It is evidence that some of the cynicism about Washington is well placed — that people get out of touch and they spend money like it’s Monopoly money.”