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Sometimes politicians, journalists and the liberal left exclaim; “It’s just a tax cut for the rich!” and it is just accepted to be fact.

But what does that really mean?

Just in case you are not completely clear on this issue, I hope the following will help. Please read it carefully.

Let’s put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

a. The first four men (the poorest) would pay nothing.
b. The fifth would pay $1
c. The sixth would pay $3
d. The seventh would pay $7
e. The eighth would pay $12
f.  The ninth would pay $18
g. The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.” Dinner for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still eat for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his “fair share?”

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested:
a. The fifth man, like the first four, now paid nothing (100% savings).
b. The sixth now paid $2 instead of $3 (33% savings).
c. The seventh now paid $5 instead of $7 (28% savings).
d. The eighth now paid $9 instead of $12 (25% savings).
e. The ninth now paid $14 instead of $18 (22% savings).
f. The tenth now paid $49 instead of $59  (16% savings… the least proportionate savings).

Each of the six was better off than before.  The first four continued to eat for free, but once outside the restaurant, the men began to compare their savings:

“I only got a dollar out of the $20,”  declared the sixth man. He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than me!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The first nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works.   The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D
Professor of Economics
University of Georgia

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A “Sound” Economy?

by Thomas Sowell

(reposted from here.)

“The truest thing that Senator John McCain said during this election campaign is what got him into the most trouble: “The economy is sound.”

“Sound” does not mean bullet-proof. Nor does it mean that everything is going wonderfully at the moment or that nothing needs to be done.

You may be as sick as a dog from having eaten the wrong thing. But that does not mean that you need to have your arm amputated or to receive massive doses of morphine. In other words, your body may be perfectly sound– and radical medical treatment can do more lasting damage than your temporary suffering will.

The political left has always known how to exploit temporary economic problems to create lasting institutions reflecting their ideology. The “progressives” did that during the brief time that America was involved in the First World War, less than a year and a half.

In that brief time, they clamped on all kinds of economic controls and even restrictions on free speech that led to landmark Supreme Court cases.

When the Great Depression of the 1930s brought many of those same “progressives” back to power, led by one of the “progressives” from Woodrow Wilson’s administration, Franklin D. Roosevelt, they brought the same mindset to government again, calling themselves “liberals,” now that the label “progressives” had been discredited by their previous actions.

By the end of the 20th century, “liberals” had again discredited themselves, to the point where they went back to calling themselves “progressives” to escape their past, much as people do when they declare bankruptcy.

Wars, economic crises and other disruptions all provide opportunities for the left to seize on current problems to create enduring changes in the institutions of society. That is what we are witnessing today.

The media have hyped current economic problems to the point where you might think we were heading for a replay of the Great Depression of the 1930s. They have been dying to use the word “recession” but there is a clear definition of recession– two consecutive quarters of negative growth– and we have yet to reach that.

If the meaning of words can be changed to suit political convenience, then discussions become an exercise in futility.

Official data show that the output of the economy in the most recent quarter is down– by less than one-half of one percent– but at last the media have one of those two quarters required to qualify as a recession.

Whether they will get the other quarter that they need, in order to start using the word “recession” legitimately, is another story. In fact, the data-gathering process is by no means so precise that we can expect the one-half of one percent decline to hold up, since such statistics often get revised later.

It is not just a question of being able to put scare headlines on newspapers or alarmist rhetoric on television. Such things are just the prelude to massive political “change” in fundamentally sound institutions that have for more than two centuries made the American economy the envy of most of the world.

If the left succeeds, it will be like amputating your arm because of a stomach ache.

To add to the painful irony, many of those who are most eager to have a massive government intrusion into the market are among those whose previous intrusions into the market are largely responsible for the current financial crisis.

It was the left– the “liberals” or “progressives”– who led the charge to force lending institutions to lend to people whose credit history made them eligible only for “subprime” loans that were risky for both borrowers and lenders.

It started way back in the Carter administration, with the Community Reinvestment Act, and gained momentum over the years with legal threats from Attorney General Janet Reno and thuggery from ACORN, all to force lenders to lend where third parties wanted them to lend. Now we have a bad stomach ache– and now the left wants to start amputating the market.”

– reposted by Julian

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As the election approaches there is certainly no shortage of issues to distinguish the candidates, however one area which gets an unfortunately small amount of attention is the future President’s potential appointees to the federal courts.

Front and center to a President’s nominee selection process rests on the question of judicial philosophy. McCain has said he will appoint “strict constructionists” who would follow in the Antonin Scalia and Clarence Thomas mold. These judges attempt to interpret the Constitution in accord with its original meaning and context. The argument for this constitutional reading is that if we in fact live in a democracy only democratically elected officials can change our laws.

By contrast Obama has stated he would appoint judges like Steven Breyer and Ruth Bader Ginsberg, who can be described as adherents to the “Active Liberty” interpretation of the Constitution. Under this view Judges take it upon themselves to go beyond the original intent of the Constitution. This view point supported cases such as Roe v. Wade, and Miranda v. Arizona. The argument in favor of this review standard is that courts require the authority to override democratic rule in the areas deemed important by the Court, even though not addressed explicitly by the Constitution.

Here are links from the dueling view points, Justices Scalia and Breyer over the question of judicial philosophy

As you think about how the Constitution should be interpreted, consider the following cases:

Boumediene v. Bush, 5-4 decision addressing the War on Terror: The Court ruled that alleged terrorists have a Constitutional right of access to domestic courts. This ruling overrode the Congresses’ specific denial of domestic court access to alleged terrorists. In my own research and reading of the opinion I have not found one prior instance in this nation’s history where warring alien enemies of this nation had access to our domestic courts.

Kennedy v. Louisiana, 5-4 decision addressing the Death penalty. The Court ruled that child rape did not qualify as a crime warranting the death penalty under the “evolving standard of decency”. This opinion overrode Louisiana’s democratic decision to permit the execution of a child rapist and the history of the American death penalty which allowed State to execute far far less horrid offenses.

Gonzales v. Carhart, 5-4 decision addressing the ban of a particular partial birth abortion ban. The Court upheld a state law prohibiting a particular form of partial birth abortion. The ruling affirmed the right of state’s to democratically pass laws on the termination of late term fetal life

Kelo v. City of New London, 5-4 decision addressing the reach of Eminent Domain. In this opinion the Court ruled that the Takings Clause permitted government’s to seize homes and other forms of private property for any “public purpose” despite the 5th Amendment’s much more restrictive language.

– Ignacio

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I got the following comment on the photo of Obama dressed as Che Guevara…

“I’m not even sure what this means. I’m guessing it’s a swipe at Obama by likening him to Saddam Hussein. Or likening him to a Cuban Communist? What I’m unclear about is why?

I appreciate that everyone is entitled to their opinion. And if you don’t like his policies, fine. But why go there of all places? Can’t you say I do not support a woman’s right to choose? Or I don’t believe in global warming? Or I support more deregulation of the banking industry? Or I don’t like raising taxes on the super wealthy? Or even I don’t think gays should be allowed to marry? Or I don’t support funding public education? Or how about I do not support health care for everyone?

Why is it people feel the need to go there? It reminds me of when Saxby Chambliss portrayed Max Cleland as unpatriotic.

Let go of the ignorance. Let go of inciting hate and fear. Promote your policies on their merit, unless you are afraid they have no merit.”

—-

Below was my answer to her…

Thank you for posting.

What I did is point out unfavorable policies by likening Obama to a historical figure who shared the same policies. It’s very effective cause it’s 1) humorous, and 2) able to show the direct effect of policies held by Obama.

Kinda like how Lefties love to say McCain is Bush.

But let me answer your questions, since you asked so nicely…

1) I don’t believe women have the right to choose. A baby is a separate human life. A baby in the womb is like a person in your house. You can kill the baby, but you can’t kill the person. Why? Because we like to confuse ourselves as to when a baby is “alive” out of convenience. Now, I know a woman’s life is sometimes made more difficult by pregnancy, which is why I would be open to some sort of 1-3 abortion limit per person. Above that, you don’t deserve a uterus.

2) I don’t believe in global warming being only caused by man. I believe it’s more of a cyclical occurrence that history proves quicker than man-made global warming. And when you ask developing countries in Africa to spend money on solar technology that is hundreds of times more expensive than fossil fuels at the moment… that’s just wrong.

3) I support appropriate deregulation in the banking industry. Remember… Fannie Mae collapsed because democrats like Clinton and Carter forced them to buy up bad loans. And when they couldn’t be repaid, they blamed the republicans for lack of regulation. What? Did the Democrats want the Republicans to regulate Fannie Mae and tell them what the Democrats were doing was wrong and destined to fail?

4) I don’t like raising taxes on the super wealthy. There is NO government/economic problem that can be fixed by taxing the wealthy more. That process digs us deeper into a hole… and fills the hole with water.

5) I think people in the gay community should be allowed to join legally in a union exactly like marriage. Just don’t call it marriage. Marriage is a religious word, with religious origins, and has nothing to do with government or policy. Gay people are just as deserving as straight people in every other respect.

6) I don’t support increasing funding the public education system that’s in place now… that was created by Democrats who have soley ruled public education in all major cities. And have done so to disastrous, miserable failures. I would much rather talk to teachers … who aren’t in unions… to find the solution on the education system. Democrats screwed up royally here.

7) I want everyone to have health care, but government funded universal health care is unattainable… and unsustainable. For example… medical technology in Canada is stuck in the 1970s… because their government can’t fund for advances in medicine like the free market can.

People go where I went all the time, Smartandfemale. I thank you for reading and commenting… but you have to be a little more light-hearted on this. Have a sense of humor. What i posted, and been done hundreds of times by Democrats. Obama himself incites fear in his ads. Don’t come to me with your righteousness.

You have no rule on morality.

Is this merit enough for you?

Please come back, since you’d like to debate on merit.

– Julian


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It’s been proven throughout time. Socialist economic policies, though they sound nice at the time, are horrible plans that stiffle our free market economy, lead to stagnation and eventually cause economic failure. Take two examples from good ol’ FDR’s administration…

Fannie Mae: Created in 1938 under FDR. It helped at the time. And that’s probably the truth with most socialist policies. They’re great to aid the government in helping it’s citizens for the short time it’s needed. But short-sighted democrats want to hold on to these policies and establish them. The result? The horrible economic mess we’re in now. Come on. I want to argue with you on it.

Social Security: So we’re paying into a program that isn’t going to have money for us when we retire, as promised, cause it will be bankrupt? Thus: Take our money… don’t give it back? Awesome.

And the keystone? The point to this post? These were social initiatives enacted by a socialist president voted into office by our grandparents.

– Bread lines existed in communist Russia. We haven’t had bread lines in The States in decades.

– Unemployment in Europe is double what it is in The States.

– Want to get an operation in Canada? Get in line. The waiting list is 16-months long, on average.

Let’s not do the same thing to our grandchildren. Spreading the wealth leads to a welfare state. A bunch of lazy citizens waiting for a handout.

– Julian

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The economy has a wall, it is in a state called liquidity trap. The Fed dropped the Federal Funds Rate yet again, and has done everything it can in the short run. Banks are not loaning any money and companies cant get loans. What do we do now? Who can we trust? Trust McCain he got it right. He said, “We need to hire people to dig a hole, and then get some more workers to come in later and fill that whole up.” What he is referring to is if people get more income there will be more consumption and consumer confidence, thus stimulating the economy. In the Obama plan raising capital gain taxes, and taxing more the small businesses will just cripple our economy more than it is now, and reduce investor confidence.  These are the 4 steps needed to be taken to get out of this recession:

  1. reduce the growth of government spending,
  2. reduce marginal tax rates on income from labor and capital,
  3. reduce government regulation of the economy,
  4. control the money supply to reduce inflation.

Obama’s economic plan is quite the opposite of what we need right now, i know its scary to think what could happen.

Stay Tuned for more

If you have any questions please feel free to ask.

-Javier

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Barack Obama refusing to go to Washington and help fix this economic problem confirms a few things:

1. Obama only knows how to talk about problems. He doesn’t know how to fix them, or does he care to fix them.

2. Obama has never written a major piece of legislation. He doesn’t want to start to help us out.

3. If he’s scared to go back to Washington and actually work (while he currently holds a position that actually calls for him to do that right now), why should we elect him into the TOP position that would call for him to do exactly that?

Obama has never done multiple things at once. He knows nothing about how to juggle.

Plus, this is not McCain trying to get out of a debate. McCain wanted 10 debates, and Obama didn’t want to debate him and only wanted to debate 3 times.

– McCain backed out of only 1 debate in this whole campain (to go to Washington and help Americans by doing his job)

– Obama backed out of 7 debates. (because he’s a chicken and knows he can’t stand on the issues against McCain.) He probably couldn’t hire enough writers to script 10 debates total.

We can debate next week. Obama’s campaign is just sucking wind, running scared and is trying to spin an honest concern on McCain’s part into a false, selfish move.

– Julian

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