Do you think Trump is anti-immigration?

Democrats, Marxists, and Social Justice Warriors all claim that Donald Trump is opposed to immigration.  Many libertarians and Objectivists agree.  Many of these people believe that this is obvious because Trump has acted to prevent the flood of illegal aliens from crossing our borders that had taken place during the Biden administration.  Mind you, Congress has created immigration laws which were signed by previous Presidents.  It is the duty of the current President to enforce those laws.

There are good reasons why the immigration laws create a process of evaluation for those we allow to reside in the USA.  Terrorists, murderers, thieves, slavers, rapists, child molesters, and those who would wind up on the welfare rolls of a country already deeply in debt are all very reasonably considered undesirables or even Deplorables.  Many a Democrat believes that most Republicans are Deplorables, so surely the above enumerated undesirable immigrants must qualify as Deplorables.

Wait.  Judgments are made in a context.  Democrats have a different context for their evaluation of immigration.  For Democrats, a Deplorable is someone who is not dependent upon government and therefore not easily controlled.  So these undesirable immigrants are actually quite desirable in the eyes of those who lust for power.  No one lusts for power more than the Democrat, Marxist, Social Justice Warrior elitists.  The quest for power justifies any act.

Is there a basis for people who are not lunatics to believe that Trump is anti-immigration?  On the surface, his implementation of a $100,000 fee for H-1B visas appears to justify a belief that Trump is anti-immigrant.  Let us consider this evaluation with some care.

The H-1B visa program allows people with special skills, generally based on years of education, to reside in the USA for 3 years.  They may renew their H-1B visa for another 3 years.  There is a lottery to apply for an H-1B visa for those who would work for a for-profit company.  Non-profits, universities, and federal laboratory candidates do not have to be filtered and limited by the lottery.  There is a general lottery of 65,000 visa applications for those with a bachelor's degree or higher.  There is a smaller lottery of 20,000 for those applicants with master's degrees or higher which were awarded by U.S. accredited universities.  In Fiscal 2025, there were 343,981 registrations for the opportunity to apply for the H-1B visa.  There were about 120,000 selections.  First off, there are many more nationals of other countries who have master's degrees or higher than 20,000 and there are many more total registrants than there are total slots available.  The $100,000 fee did not apply to these 2025 applicants.  It will apply in 2026, but not to those foreign nationals who are already legally in the USA.  Most of them have graduated from U.S. universities.  One of the main consequences of Trump's changes to the program is that the foreign nationals who are already legally in the USA and who have been educated here, will be much less likely to be forced to leave the USA because someone who is not already here is being brought into the U.S. to work.  About 250,000 international students graduate from U.S. universities each year.  There are almost certain to be more than 120,000 registrants for H-1B visas from these students in 2026.  The number of H-1B visas awarded will not be very different after the Trump changes than before them.

In fact, Trump made it very clear to Laura Ingraham, who hates the H-1B visa program, that he sees a need for the special skills of H-1B visa holders.  I fully agree with Trump on this.  I have sponsored four scientists for H-1B visas over the years to work for my laboratory.  I currently have one Ph.D. scientist on my staff who is awaiting word on his application, which appears to have been delayed by the government "shut-down."

Laura Ingraham, J. D. Vance, and other Republicans who oppose the program commonly cite the idea that there are plenty of American residents who can meet all of our technical and scientific needs without foreign workers.  I have news for you.  Getting a Ph.D. in the hard sciences is a much tougher challenge and much more work than most Americans wish to undertake.  The IQ requirement is very high to begin with and the U.S. population compared to the world population is about 4%.  Laura, this means that there are many more high IQ people in the rest of the world than there are in the USA.  Yes, we more than hold our own on a per capita basis, but we are foolish to not import as much of the intelligence and dedication to professional skill development that the rest of the world can offer us.  The people we keep in the USA under the H-1B visa program have proven to be so productive that they have raised the standard of living for all Americans.  These are people we should welcome with open arms.

There have been abuses in the H-1B program by some companies.  Trump has been addressing some of those abuses.  The $100,000 fee on hires from outside the USA is one way he is addressing the abuses.  There is a claim that companies pay H-1B visa holders less than they pay comparable Americans.  This is not the case for my laboratory.  I am required by the Department of Labor to pay my present applicant more than I pay my American scientists.  In addition to that, I had to pay application fees and lawyer fees and put in tens of hours of my own time to do the voluminous paperwork for his application.  Believe me, if I could find a comparable American citizen scientist, I would find it much easier and more profitable to hire him (or her).

I would like to see the U.S. immigration law be more welcoming of immigrants than it is.  I do believe in a vetting process.  Open borders is not a viable option for a country with concern for the safety of its people and when that country is substantially a welfare state in extreme debt.  We benefit from immigrants who are committed to being productive.  Productivity is a necessary measure of merit. I think Trump realizes this.

An Update on My Immediate Family Share of the National Debt

The national debt of the federal government of the USA is now about $36.506312 trillion.  There are currently about 341.374 million Americans.  This means that each living American has a debt of $106,939.

My wife and I, plus our 3 daughters, plus our 3 granddaughters combined owe $855,512.  I doubt that my wife and I will live long enough to pay down our share of that sum, so whatever is left will devolve to our daughters and granddaughters.

The federal debt will likely continue to grow, despite the heroic efforts of DOGE.  Congress has not shown much appetite for reducing spending to the level of its current revenues in several decades.  I will be watching for any signs of increased responsibility on Congress's part.

See the historical plot of the Federal debt as a percentage of the USA GDP below:

As of the year 2024, our national debt as a percentage of GDP is about equal to that of 1946 at the end of WWII.  This is serious debt without the justification that the nation had with WWII.  After WWII, the population growth rate of the USA was high for several decades, which made it easier to grow the economy and hence the GDP.  The population growth rate is much lower now.  Congress will have to work harder to restrain spending increases in the near future than it did then if the national debt is to fall as a fraction of GDP.

Summarizing a Few Spending and Deficit Comparisons for Obama to Bush

The Tuesday, 20 January 2015 issue of Investor's Business Daily offered a few comparisons of George W. Bush's budgets compared to those of Obama in its Issues and Insights Section.  These observations are timely given that Obama's budget for 2016 would increase spending by $68 billion.  Every single year Obama's budget request exceeded that which was approved by Congress, while all but one year under Bush, Congress insisted on spending more than he requested.  Every one of Obama's budgets called for a higher deficit than wound up being approved by Congress.  This spendthrift Democrat Socialist posed as a much more fiscally responsible man than Bush in his first presidential campaign, consistent with his unsurpassed proclivity for the Big Lie.

If Obama's budgets had been approved by Congress, the USA would have a gross national debt $1.8 trillion greater than it is now.  If Congress had only spent as much as Bush requested, the increase in the national debt under Bush would have been $800 billion less.

Under Obama, the gross national debt has grown by $7.5 trillion already and it has nearly two years more to go up, compared to its growth under Bush of $4.9 trillion.  So if Obama had had his way, the national debt would have been $9.3 trillion greater in 6 years, while if Bush had had his way, it would have gone up $4.1 trillion on his 8-year watch.

Yes, the spending, the deficits, and the debt were all handled poorly in Bush's budgets, but they were handled even more recklessly under Obama's budgets.

A Piecemeal Approach to Appropriations is Exactly the Way for Congress to Proceed

We are constantly hearing from most of the media and from Obama and his allies generally that the proper way to appropriate funding for government is to pass an omnibus authorization to continue the massive spending of the government and every current program.  They demand a "clean" continuing resolution that includes the very dirty ObamaCare program with full funding.

They choose to ignore many things in this assertion.  Among them:

• The debt due to this unsustainable spending has surpassed the GDP and will be harder and harder to roll-over.  The debt will saddle the People with much higher interest rates in the future.  Any attempt to increase taxes to pay the increased debt payments and the increases in Medicare, Social Security (retirement and disability), Medicaid, and ObamaCare spending, will slow the growth of the economy enough to result in a decrease in tax revenues.  In other words, only spending less is a possible sustainable solution.  This solution is to be avoided at all costs according to Democrats.

•  It is the job of Congress, especially the House of Representatives, to carefully review spending and only authorize that spending which is constitutional and necessary.  This constitutional responsibility is forfeited in the continuing resolution process.  Only in a piecemeal consideration of government program funding will irresponsible, unnecessary, and unconstitutional programs be ended as they ought to be.  Programs should be examined closely by Congress.  This takes time and effort, which it is all too clear Congress is not up to.  Neither is Obama up to it.  This is a great reason to demand huge reductions in government spending and in the number of programs all by itself.  Giving Congress so much money and so many programs is like giving a five-year-old a house, a gun, and a car of his own and filling the house to the ceiling with hundred dollar bills.

• The infamously named Affordable Care Act is very unpopular with the People.  It is a major source of increased government spending.  This spending will add greatly to the national debt.  Many will push for higher taxes to fund it in the future, despite the fact that higher taxes will result in less tax revenue over time, while lowering our standard of living.  Of course a past Congress passed ObamaCare without reading it and without regard to its many violations of individual rights and of the limited powers given the government by the Constitution.  This does not mean that the present or future Congresses are not obliged to stop the funding for this program if they assess it to be unworthy of funding, unconstitutional, or against the will of the People.  Indeed, if any is the case, then it is Congress' responsibility to stop the program.

So much for the nonsense that only a Continuing Resolution to fund all government programs at present levels is responsible.  Nothing could be more untrue.

Obama's Job Destruction Plan Illustrated

We have long been seeing updates of the graph that Obama and his henchmen used to illustrate the effect of their jobs creation plan with comparison to the jobs recovery with no such plan.  The effect of his distributing huge sums of printed and borrowed money among his campaign contributors and such of his constituents as he expected had purchasable votes is clearly shown in this most recent update of that graph.  The actual unemployment (actually understated) through the recession is shown with the red dots and this far exceeds the anticipated unemployment rate if Obama did nothing.

Surely we should assume that the difference between the original projected unemployment rate and the actual unemployment rate is the result of Obama's policies.  In other words, instead of improving the jobs situation, those policies clearly worsened it during this Great Socialist Recession.  They worsened it far worse than this plot implies too, since the actual unemployment rate is really much higher than the stated rate as I have many times pointed out.  This is due to the many people who have given up hope of finding employment and stopped looking for it.  It is also due to the many people who have become comfortable on food stamps, extended unemployment benefits, and on Social Security disability payments under Obama's inducements to do so.

14th Amendment Gives President Authority to Raise the Debt Ceiling: Another Socialist Taradiddle

Bill Clinton, Nancy Pelosi, Majority Whip Sen. Dick Durbin, Representative Peter Welch, and numerous Progressive Elitist columnists have called upon Obama to raise the debt ceiling himself using the 14th Amendment as the basis for his power to do so.  Examining this claim of presidential power by the socialist left will inform us greatly about their values and how seriously they take the Constitution.

In Article 1, Section 8, the Congress is given its powers.  It says:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States; ....

To coin Money, regulate the Value thereof, and of foreign Coin, ...

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States; ....

Section 8 also goes on to describe its role in the defense of the country, including that of providing for military forces and placing a two-year appropriations limit on its doing so.

The powers of the President are given in Article 2, Section 2.  There is no mention of any power to appropriate money, to issue debt, to issue coin or bonds, or any other power pertaining to the use of the People's money.  This is not surprising given that control over money, taxes, and debt were the primary powers that the Congress was invested with for the purpose of limiting the power of the Executive.  We have to remember that Americans had just fought for their independence from a much too powerful King of England.  They had also faced too powerful governors in the colonies in most cases who ruled those colonies for the King's advantage, not the People's welfare.  The Executive under the Articles of Confederation had been nearly non-existent and was much strengthened under the Constitution, but was still subject to great distrust.  Were we as wise today, we would still view the Executive with great distrust.

The 14th Amendment was passed in 1868 to deal with issues resulting from the outcome of the Civil War.  In Section 4, it says:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.  But neither the United States or any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or the emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Section 5 of the 14th Amendment says "Congress shall have the power to enforce, by appropriate legislation, the provisions of this article."

So whatever power is granted here is granted to Congress.  There is no mention of the President.  What is more, the debt to be honored without question, was only such debt as had been authorized by law, which only Congress can do.  One can go further in understanding this amendment's requirement about the debt.  It is clear that it imposes an obligation upon Congress to pay its debts in full and without dilution.  A rational person would question repayment of a debt with a devalued currency, for instance.  Therefore, if Congress, or in our present condition, the Federal Reserve is printing money to make up the difference between tax revenues and government spending, then Congress itself is in violation of the 14th Amendment.  Any rational broad interpretation of the 14th Amendment would note that Congress is constrained in its spending to a sustainable debt.  It cannot default on the debt, but it also cannot allow the debt to rise to such heights that a rational person would question that it can be repaid in full with a fully valued coin.

As we see, it is a ludicrous taradiddle that the President can raise the debt ceiling without an act of Congress.  There is no such power in the 14th Amendment.  This is why even Obama has been disinclined to claim this power.  Even though he dislikes the Constitution and holds it in low regard, even he dares not traduce it is such a blatant manner.  Not only would he have to assert a power he clearly does not have, but he would also have to violate multiple acts of Congress, duly passed.  First, he would have to break the law setting the current debt ceiling, as Congress has been doing since 1917.  Second, he would have to violate the Antideficiency Act which states that the President or any government official must have an appropriation from Congress before he can authorize payments.  It could not be more obvious that the power of the purse belongs to Congress, not the President.

This being such an open and shut case, it is very revealing that so many of the top leadership of the Democrat Party are so eager to subvert the Constitution and support such an egregious taradiddle as the claim that the 14th Amendment gives their great socialist leader the power to raise the debt ceiling by himself.  This is an attempt to claim dictatorial powers.  If Republicans had made such a claim when the Democrats controlled one of the houses of the Congress, you can be certain they would have been screaming in opposition.  It is way beyond time for the American People to understand that their dominant party is one eager to subvert the Constitution and thereby the control the people exercise by choosing their representatives to the Congress.  There is an eagerness for dictatorship, so long as the dictator is a Democrat Socialist.  This is a predilection to be feared and against which we must stand in firmest opposition.

taradiddle: 1) a trivial or childish lie, a fib, or 2) pretentious nonsense.

Social Security Blahs

On the verge of the new year, 2013, let us consider some of the gloom due to the government Social Security Ponzi Scheme to be faced eventually in our future:

•  2012 deficit of SS was $48 billion, which was added to the national debt.
• SS beneficiaries hit new record of 56,758,185 people.
• People collecting disability payments hit new record of 8,827,795.
• 112.5 million full time workers in 2011 to support those on SS.  Only 94.7 million full time workers were in the private sector.
• 1.67 full time private sector workers support each SS recipient.
• 1.27 full time private sector workers support each SS recipient or full time government worker.
• 2012 is the third straight year that SS has spent more money than it received in tax receipts.
• Baby Boomers have barely begun to retire.
• The National Debt is now $16.42 trillion, in excess of the $16.4 trillion debt ceiling and the National GDP of 2012 estimate of $15.9 trillion.
• Politicians are almost universally happy to pretend there is no problem, as are the voters.

Have a happy 2013 in some Galt's Gulch of your own making, while the nation whistles its way merrily to self-immolation.  The nation is drunk, not just tonight, but everyday.  As long as the con man Obama and his henchmen entertain them with being conned, they are happy drunks, jobless or not.

Economic Stagnation, Unsustainable Debt, Lawless Government Chosen

The majority of voters rejected the American Principle of limited, constitutional government whose purpose is the protection of our sovereign individual right to life, liberty, property, the ownership of our own bodies, minds, and labor, and the pursuit of personal happiness. Socialism and anti-human extreme environmentalism coupled with crony mercantilism and constant, blatant lying were chosen by the majority of voters within the boundaries of America.

I cannot say how unbelievably disappointed I am in half of the people of this country.  I cannot even think of them as Americans due to their failure to value the American Principle.  I cannot understand how so many could so radically embrace organized thievery, thinly veiled as redistribution in the interest of materialistic equality.

The voters have chosen four more years of such violations of economic rights that economic stagnation is assured.  We are assured four more years of very high unemployment and decreased full-time employment thanks to ObamaCare and a weak economy.  We are assured of the further destruction of whole industries, such as the coal, oil, and natural gas industries.  We can count on continued high gasoline prices.  We are assured of a government controlled medical system characterized by fleeing doctors, deteriorating medical service and expertise, aging medical equipment, lengthening waits for critical medical care, and of course much increased costs.  Government-run schools will become still greater propaganda factories deceiving the minds of our children and college students with tall tales of how government control will solve most any problem.  They will serve blue collar union teachers and not the children who will be deprived of real knowledge about American history and civics.  The cost of this hollow education will continue to skyrocket.  America's producers will be vilified for another four years and then taxed heavily, not to fill the gap between government spending and tax revenue, but to penalize the productive for being so productive.

Most voters say they want smaller government, but most voted for Obama.  This is a total disconnect.

Most voters say they want less national debt, but they chose the debt champion of all Presidents.

The voters also chose to return a Democrat Senate so they could continue the Obama-Reid regime record of no budget for a total of 8 years, in violation of law.

They chose Obama and a Democrat Senate so they would continue to have the unpopular ObamaCare, really ObamaUncaringTax, shoved down their throats by rationing bureaucrats and IRS thugs. 

Most voters cared not a wink about the cover-up of the New Black Panthers, Fast and Furious, and Benghazi.  Most care nothing that Obama flushed tens of billions of dollars down the toilet of hollow green energy companies with no possible market run by his campaign bundlers to fill their pockets in a race to the company bankruptcy.  Most voters did not mind the constant misrepresentations of the truth, the constant lies, and the fallacious arguments.  They embraced their celebrity con man.

This con man and the Democrat Senate will not address the fact that the U.S. government spending on ObamaCare, Medicaid, Medicare, Social Security, Food Stamps, and the interest on the debt are unsustainable.  We are hurtling down the road hacked out by Greece.  Collapse of the government is coming.  The only hope to avoid that was to free the economy and allow growth in it that exceeded that of the government.  Most voters never understood this simple fact.  Thanks to Obama and the Democrat Socialist Party and their most unworthy, unthinking supporters, collapsed government is our future.

Government Gone Wild on the National Debt and Liabilities

Daniel J. Mitchell of the Cato Institute just drew my attention to this excellent video created by Government Gone Wild.  Earlier videos from Government Gone Wild that I have seen have been excellent also, which is an assessment with which Daniel Mitchell agrees.

Obama Cruelly Threatens to Withhold Social Security Payments

There is no cruelty to match that of a frustrated socialist yearning for control over the People.  Obama has told tens of millions of very frightened seniors on Social Security that if the Republicans do not cave-in and give him a blank check to continue spending massive amounts of taxpayer money and then add much more to the national debt, he may not send out Social Security checks in August.  This is probably an empty threat, but that does not diminish the brutality of it.

By any rational analysis, it is also an absurd threat.  In 2010, Social Security income was $677.1 billion according to the Social Security Fund Trustee's Report.  Social Security outgo was $584.9 billion, which means it had a surplus of income over outgo of $92.2 billion.  That surplus was used to help fund the massive deficit spending on all other government programs, as the Social Security surplus has been used for decades.  Because of this, of the $677.1 billion of income, $108.2 billion is interest on government bonds the Social Security Trust Fund bought to help the government finance its deficits in the general fund for decades.

The Obama administration wants to keep spending money it does not have on such things as

• the expenses of setting up the bureaucracy and rules for ObamaCare, 
• setting up the bureaucracy and rules for the Dodd-Frank finance "reform", 
• paying ethanol, windmill, electric vehicle, solar, and other "green" energy subsidies, 
• paying higher electric and gasoline bills because it is foolishly convinced by its own propaganda that man is causing a catastrophic global warming, 
• paying hordes of scientists to prove this false catastrophic man-made global warming hypothesis,
• persecuting business with reinvigorated threats of anti-trust actions, 
• putting more people on Medicaid and Medicare,
• paying bloated union wages on federal contracts,
• using the Labor Department to provide site requirements to companies for their expansions while considering only Union Shop states,
• using the Justice Department to promulgate injustice against the states and the people and discrimination against those not in government-favored minorities,
• funding universities that long ago became bloated with government money and stopped educating students,
• promulgating tens of thousands of new regulations which serve no useful purpose but to increase the power of bureaucrats over the People who do not have the time to read the regulations,
• and providing funding to the United Nations, the IMF, the World Bank and many other international institutions that do not like the U.S. and hate our Constitution and concept of individual rights.

Apparently, Obama is now telling us that he is so unwilling to stop such foolish spending that he is going to transfer more than the surplus in the Social Security Fund income out to cover these other expenses.  It is his decision to do this which will prevent him from sending out the August Social Security checks!  Actually, I do not think the law will even allow him to do this, but then he is accustomed to ignoring the law, so that does not mean he will not do it.

Let us suppose that he chooses not to use the federal income from income taxes, corporate taxes, capital gains taxes, tariffs, gasoline and cigarette taxes, and many other taxes to pay the $108 billion owed the Social Security Fund in current interest payments.  In other words, he might make payments on interest to the Chinese and to investors, but not to the Social Security Fund.  The Social Security surplus of $92.2 billion would then be turned into a small deficit of $16.0 billion.  If he then did not send out that $16.0 billion, but did send out the remaining $568.9 billion of checks, this would mean that 2.8% of Social Security payments would not go out.  But, there is no way that $16 billion shortfall due to the default on the interest payment would not be made up by any President not grasping at power as a lust-driven would-be dictator.

Obama's threat really has struck terror into the hearts of many Americans on Social Security.  This was a totally irresponsible and pernicious act on the part of this cruel and evil man.  It seems to take such people to be the strongest advocates of socialism.  Despite its pretenses of caring for the needs of some of the People, those who pursue this so-called ideal as a career are never actually caring people.

This entire fuss about the debt ceiling is due to the failure of the Senate to produce a budget for over two years.  The House would not produce one either until the Republicans took it over.  But, the Senate and the President have ignored their budget.  Since no agreement has been reached on what the government will spend in 2012, there is no basis for an agreement on what spending cuts will be made to reduce the deficit to some manageable proportion of our GDP.  All we know is that the record over the last three years was for the government to spend an average of more than 24% of GDP, while before 2008, the spending was below 20% of GDP.  Obama and the Democrats appear to want to continue spending much more than 20% of GDP even though that will mean huge on-going deficits.  Apparently, they intend that this funding will be the result of many more continuing resolutions on spending, so they will never have to recognize that the welfare and crony mercantilist government they want is not sustainable.  They can ignore the failure of big government socialism as long as they do not have to produce an actual budget.  Unless, of course, we collapse as Greece is and Italy may be on the verge of doing.

A 4% of GDP reduction in government spending is more than a $600 billion reduction per year.  It is clearly easy for the government to function at its 2007 spending levels, so there is no excuse for spending cuts that are not in the $600 to $700 billion per year range relative to the spending of this year and the two previous years.

More Taxes to Pay the National Debt?

Do we need higher taxes and fewer tax deductions to pay the deficit of $1.597 trillion this year?  According to the Office of Management and Budget, the federal government will spend $3.771 trillion this year, which is an increase of $1.043 trillion of spending since 2007.  This is a 38.23% increase in spending in 2011 compared to 2007!   The spending increase since the 2008 Democrat Congress budget is 32.2%.

The deficit ballooned because of this spending increase coupled with a smaller $393 billion loss of tax revenue because Americans have been made much poorer now in comparison with 2007.  Many see that as the result of government shackling the private sector with higher taxes, many more regulations, the threat of still more draconian administrative regulations, the increasing requirements and expenses of ObamaCare, and the massive printing of money.  The result has been a massive transfer of wealth from the jobs-creating private sector to the jobs-devouring government sector.

If we were to start repaying this national debt today over a 30-year period in equal payments, our annual payment would be $900 billion.  Note that is almost all of the massive spending increase that has caused our present debt woes.  If we are to come up with an extra $900 billion per year to pay our debts, we already face a frightening task.  Perhaps it is so frightening that few people are willing to face the crisis at all.  If we ignore the debt until 2012, but then start to make repayments, the long-term interest rate of 5% is likely to have returned and the annual principal and interest payment will be about $2 trillion!  Imagine making debt payments equal to 73% of the total spending of 2007.  Can you imagine squeezing defense spending, medicare, medicaid, the administration of ObamaCare, and Social Security into 27% of the budget?

We must make a choice.  We must either increase taxes and slightly decrease spending as the Democrats want to do, or we must greatly decrease spending and allow the economy to grow with modest tax decreases as the Republicans mostly want to do. 

Tim Geithner, the Treasury Secretary, just told the House Small Business Committee on 22 June that the Obama administration wants to squeeze another $1 trillion out of people earning more than $250,000 a year over the next 10 years.  Most of these people are small business owners.  They are precisely those small business owners who are making enough money that they can hire more people.  Nonetheless, Geithner maintains that cutting spending by $1 trillion would have a more negative impact on the economy than will the tax increase on the "rich."  Like most people, he is ignorant of the effect this will have on company owners choosing to invest in new production-enhancing, and thus job-creating, equipment.  He does not think about the need to buy more building space to put more production capability and employees into.  Finally, he is not thinking about the fact that few employees are sufficiently productive soon after being hired to carry their own weight.  Money has to be set aside to pay them while they get enough on-the-job training to become profit centers.  Expanding a business is commonly a very expensive proposition.  Adding one person in a small business is a big incremental step in terms of the necessary addition to company income.  Rational businessmen do not expand a business without a strong sense that they will be able to make a decent profit for their risks and effort in doing so.

ObamaCare and the Dodd-Frank financial reform act raised taxes.  The inheritance tax was brought back by the Democrats as a special scourge of small businesses.  While most other developed countries have learned the advantages to reducing the corporate tax rate, the U.S. has not.  It now has the highest corporate taxes in the developed world, since Japan recently reduced its previously equally high corporate taxes. We are also one of the few countries that taxes earnings a company makes in another country.  This causes U.S. companies to invest those earnings in other countries rather than in the U.S.  Our tax policy encourages them to create more jobs abroad than at home.

As a result, more and more companies financed by Americans are being started in other countries.  Many American companies are re-incorporating in other countries with lower taxes.  Favorites for such purposes are Luxembourg, Bermuda, and the Cayman Islands.  In 2008, there were 3 U.S. initial public offerings (IPOs) by companies incorporated in tax-haven countries for every 10 that were incorporated in the U.S.  Ten years ago, only 1% of U.S. IPOs were incorporated in either the Cayman Islands or Bermuda.  In 2010, 26% of them were!  So far in 2011, 21% of new IPOs have been incorporated in these island tax-havens.

In 2004, Congress acted to limit incorporations in tax-haven countries.  Companies with a substantial change of ownership could re-incorporate in a tax-haven country, however.  This actually encouraged the sale of many companies.  The IRS changed the rule to require a complete buyout in 2009.

The venerable American company Samsonite was taken over by CVC Capital Partners and is now incorporated in Luxembourg, but headquartered in Hong Kong.  Asia is now its primary market.  The semiconductor spin-off of H-P, Avago Technologies Ltd., was bought out by Kohlberg Kravis Roberts & Co. and is now incorporated in Singapore, though its headquarters is in San Jose, CA.  It now has built extensive operations in Singapore.  Freescale Semiconductor Holdings I Ltd. went public in the U.S. last year after a buyout from Motorola Inc. which used to own it, but now it is incorporated in Bermuda.  It still has extensive operations in Austin, Texas.  U.S. investors in 2009 had so many securities holdings in Cayman Island companies that they are the fourth highest total for any country in the world!

Most other developed countries have learned either from the disasters of their own adoption of socialism and the anti-business mentality or from watching the deleterious effects of socialism in other countries, that economic growth will be stunted by soak-the-rich and squeeze businesses schemes to fund the welfare state.  Many of those countries are stuck with the welfare state, but have learned that it cannot be sustained at all without a growing economy.  The American Democrat Socialist Party has not learned this lesson.  RINOs in the Republican Party have not learned it very well either.  As a result, we are growing at a much slower rate than many countries around the world now.  We used to talk about the Old Men of Europe.  Well, we are becoming the Old Man of the World. 

This is totally unnecessary.  We have only to unshackle business and stop penalizing the so-called wealthy or the small businessman to completely change this around.  The Democrats have made it perfectly clear through Obama, Biden, Geithner, Reid and Pelosi that they have learned nothing.  Chris Van Hollen, a particularly wrongheaded Democrat from wrongheaded Maryland, is a Democrat negotiator in the Biden deficit-reduction talks and has said that Democrat principles require a tax increase on the wealthy and business owners.  He is accompanied on the Democrat side by the radical James Clyburn of South Carolina.  It is no wonder that Eric Cantor, the Republican House Majority Leader, and Senate Minority Whip Jon Kyl were compelled to leave the Biden talks.  It had become too ridiculous to work toward a compromise with these ignorant job-killers and company-killers from the Obama administration and the Democrat sides of Congress.  Earlier, Tom Coburn, Senator of Oklahoma, had similarly given up hope of a rational outcome from talks in another set of negotiators known as the Group of Six.  I have to applaud these sensible Republicans.

When the lemmings swarm over the cliff edge, sensible men refuse to follow them.  Actually, I have heard that lemmings are more sensible than Democrats.  They really do not rush over the cliff.  That is just a fable for them, but it is the everyday purpose of our Democrat political leadership.

Slothful IRS Reduces Consequences of Exceeding Debt Limit

Treasury Secretary Timothy Geithner has told us that the government has a few tricks it can use so that even though the government debt exceeds the debt limit, the government will not have to shut down until early August.  One major reason is not discussed.

The IRS is running late this year on refunding excess taxes paid.  Part of the reason for this is that Congress and Obama did not manage to work out an agreement and sign it into law to prevent a drastic raise in taxes until 17 December of 2010.  In addition to changes that affected future payroll withholdings, some changes required retroactive changes to 2010 tax forms, which delayed the start of filing for many people.  Among these,

• Taxpayers were allowed to continue choosing to either deduct state income taxes or the state sales tax.  This affected the 50 million filers who itemize deductions.
• A change was made in who was affected by the Alternative Minimum Tax or AMT, which also affected those who itemize deductions.
• Teachers who claim the $250 deduction for money spent on classroom supplies which had been scheduled to expire.
• Qualified college expenses could allow a deduction of up to $4,000 which had been scheduled to expire.

Consequently, the IRS was going to be jammed more than usual due to these late changes.  There is, however, another problem the IRS has on top of this one.

The first Democrat-controlled Congress of four years ago decided that the IRS should provide loans to first-time home buyers at no interest.  A million home buyers took advantage of this program, so that IRS computers are taking in monthly mortgage payments in addition to handling the usual business payroll tax deposits and trying to get the many refunds out to taxpayers.  The IRS is running seriously behind.  This is the normal problem of poor central planning that we have come to understand is central to big government.

But, government has also earned our cynicism.  Could it be that this is also a good excuse for getting refunds, which averaged $2,324 in 2007, back to taxpayers late?  During the period between now and August, the longer it takes for the IRS to refund excess tax payments, the easier it will be to avoid the consequences of having exceeded the debt limit.  The delays on many tax refunds are expected to be 4 months.  Four months from 18 April will be 18 August.  This is very convenient for our overspending government.  Is it possible the IRS and its tax-dodging leader, the Secretary of the Treasury Timothy Geithner, are taking advantage to the fullest of such excuses?  This would help to allow the administration to continue its free-spending ways unabated until August.

Your Payment on the National Debt Interest

If you are employed, what is your share of the cost of the interest on the national debt?  The national debt is presently $14,255,760,000,000.  The interest paid in 2010 on the national debt was $413,954,825,362.17, according to the Treasury Department.  [The White House claims the interest paid in 2010 was only $196 billion on a public debt of only $9.019 trillion, but we know how creative the Obama administration is in misinforming us.]  In February 2011, the Bureau of Labor Statistics says 138,093,000 Americans were employed.  The average debt interest payment per employed American is then $2997.65.

I sure am not making enough to be able to pay about $3,000 a year of interest payments on the national debt.  Actually, I am not paying that much.  There are a few rich people covering most of my share, I am sure.  This will also be true for most readers.  But, we should be asking ourselves if we have any business spending about $3,000 per employed person just to make interest payments.  Don't you think we have a strong incentive here to greatly reduce government spending to the point we can pay down the national debt and reduce these incredibly high interest payments?

Dems: We Don't Need No Stinking Budget!

The Budget Impoundment and Control Act of 1974 requires that a budget resolution be produced by 15 April each year in the House of Representatives.  The Pelosi House still has not produced that required budget resolution, let alone an actual budget.  First, the Democrats are divided.  One faction wants to spend lots and lots of money, none of which is covered by tax receipts.  The other faction wants to spend a little less.  Second, neither Democrat faction wants to go on record with an actual budget deficit and thereby allow easy and definitive projection of the national debt given the upcoming fatal elections.  If they produce no budget until after the election, they hope the bloodbath for the Dems will be lessened.  This is pathetic.

The Democrat chairman of the House Budget Committee complained when the GOP did not pass a budget resolution in 2006, "If you can't budget, you can't govern."  Now he and the Democrats are proving they cannot budget and cannot govern.  Obama is calling on non-security departments to suggest 5% budget cutbacks.  A Democrat proposal in the House for a 2% budget cutback will not get a vote on the floor of the House.  Without the budget resolution, each of next year's 12 spending authorization bills will have no limits. 

IMF Projects Some Out-of-This-World National Debts

The International Monetary Fund (IMF) has produced the debt predictions for the year 2014 given below.  The chart is from the 27 March - 2 April 2010 issue of The Economist.  The bar graph plot is actually of the increase in the national debt from 2007 to the projected debt of 2014, which is given in the small boxes on the right as a percent of the nations GDPs.

The United States IMF-projected increase in the national debt from 2007, when the Democrats were in their first year of controlling Congress, looks to be about 47% between then and 2014.  Both Japan and Great Britain will have added even more to their national debts, but note that the U.S. has recently been much more profligate in its overspending than even such stalwart socialist countries as France, Germany, and Italy.  While Japan's projected 2014 national debt will guarantee its sluggish growth for decades as it struggles under an unimaginable debt 246% greater than its GDP, the projected national debt of the U.S. at 108% of GDP will make us stagger a good deal also.  We will wind up with a national debt worse than that of Britain, France, and Germany, each of which we recognize as irresponsible socialist countries.  What does this make the U.S.?

Kudos belong to Canada, which has been much wiser in managing its economy throughout this recession.  It is increasing its national debt by only about 5% from 2007 to 2014 and its 2014 national debt will be a mere 69% of its GDP.  That should position Canada for solid growth in the near future and leave Canadians much less burdened with debt and the interest on that debt than the wayward Americans to the south.  It looks as though I would be wise to shift some of my retirement investment to Canada, where it may be safer and have better prospects for growth.

Obama Falsely Boasts He Saved Economy

Obama, the same megalomaniac who swore he would cure all diseases and end all poverty in his Democratic nomination acceptance speech, has been running about blowing his own horn that He saved the economy. How did he do this?

Well, apparently by letting Nancy Pelosi and Harry Reid construct a hugely wasteful and highly unproductive stimulus bill. Yes, that same bill which give socialist Democrats every wasteful and lunatic spending program they had wanted for years. It gave large sums of money to ACORN and to alternative energy development. Neither of which has ever produced anything very useful ever. It was said that it was going to put large sums of money into shovel-ready infra-structure projects, but actually the sums going in that direction were small. And, most interesting of all, even though the bill was said to be necessary to fight an immediate emergency in the state of the economy, most of the money is actually to be spent in the months leading to the 2010 election. To date, only about 5% of the money has actually been spent, so one cannot expect that there is much in the way of positive effects.

Because so little has been spent, while the huge debt to pay for it looms over our future, the main present effect of the stimulus bill is the uncertainty it creates looking forward. There are clearly going to be many negative ways this will affect the economy in the near future. The bill shifts huge sums of money from productive uses and uses that individual's desire to political uses. Many of those political uses will enrich the enemies of free enterprise. In other cases, the money is to be used to create advantages for some industries over other industries, which they are incapable of achieving in the free market. This is a misallocation of resources.

The stimulus money will create some jobs, but the critical issue is whether each job created is a lasting job and whether it kills more than one private sector job. The answer is that many of the jobs created are not lasting and that each created job kills more than one private sector job. This stimulus bill will create more unemployment than employment.

Obama is a false prophet.

Our Federal Government Debt

While considering which problems the Federal government should add to its goals to find and develop solutions, we should consider the size of the national debt. It is now over $9.5 trillion, with each and every family owing an $80,831 share of that amount. This is just the money we have already overspent.

Far more alarming is the unfunded future obligations to Social Security, Medicare, and other social programs. These unfunded promises now amount to $53 trillion.

Maybe we should stop to think about Obama's promises to spend still more on alternative energy, ending global climate change, and funding a national health care system, among many other new programs. Possibly, our resources are limited, despite his rhetoric being unlimited.