An outline of my approach to reviving the economy

In mentioning that the Obama economy made it much more difficult for small businesses such as my materials analysis laboratory to continue to operate, a scientist with whom I had been corresponding about his analytical needs claimed that no one could do the job of reviving the economy better than Obama.  He then asked what I would do.  Here is my 13-point reply with minor embellishments:


1)  Kill ObamaUncaringTax, too nicely called ObamaCare.

2)  Kill the Dodd-Frank Too-Big-to-Fail Act which is stultifying the loan markets and setting up the next colossal financial bubble.

3)  Enforce the work requirement on government charity programs and begin rapidly phasing them out.  The private sector can pick up whatever programs it wants to.

4)  Stop the EPA's vendetta against the use of coal.  The mercury and other pollution arguments are greatly exaggerated and really mostly an excuse to act on the failed hypothesis that man's CO2 emissions are causing a catastrophic global warming.

5)  Recognizing that the catastrophic man-made global warming hypothesis is wrong, stop discouraging other fossil fuel use and freely allow the development of new sources of oil and gas. Open up leases on federal land and offshore for development.  End federal subsidies and mandates for green energy development. 

6) Kill the federal CAFE requirement for 54.5 mpg by 2025 or any other date.

7)  Authorize the building of the Keystone XL pipeline so the Gulf of Mexico refineries are fed plenty of Bakken shale oil and Albertan tar sands oil.

8)  Increase the retirement age for Social Security and the coverage age for Medicare.

9)  Eliminate the Dept. of Education, the Dept. of Energy, the Dept. of Housing and Urban Development, the Labor Dept., most of the functions of the Dept. of Health and Human Services, the Agriculture Dept., reduce the Dept. of the Interior, eliminate the Transportation Dept., and reduce the Dept. of Homeland Security.  Fold the legitimate functions of the Labor, Agriculture, and Transportation Departments into the Commerce Dept.  Eliminate corporate welfare programs in the Commerce Dept., as well as the labor union welfare programs now in the Labor Dept.  Kill the Davis-Bacon Act and federal requirements that union wages be paid on federal contracts.

10)  Convert the Medicare program into a defined benefits program so that Medicare patients care about how much they spend and will not allow overcharging.  All government fraud, waste, and abuse programs are a pretense and are only used selectively to occasionally prosecute someone who is not playing the game to the liking of the powers that be in government.

11)  Sell most of the federal lands with mineral rights and use payments to pay down the debt.  The main purpose of this is to see that the land will be used more productively.

12)  Convert the Social Security program over time from a Ponzi scheme to a tax-deferred personal investment program with the investment truly held by the investing individual.

13) Reduce tax revenues as drastic spending cuts are enacted and simplify the tax laws and codes.  Preferably move to consumption taxes as opposed to taxes that inhibit production.  Consumption taxes will eliminate almost all reporting of financial information to the government.  Eliminate Sarbanes-Oxley.  Government spending will be quickly reduced to 18% or less of GDP and then cuts will continue until it is no more than 10% of GDP.  The economy will grow by leaps and bounds as the cost of government is kept growing somewhere between the rate of population increase and the rate of GDP increase, but definitely significantly less than the rate of GDP increase.

That is the gist of my program to transform the American economy consistent with the American Principle of government limited to the protection of our equal, sovereign individual rights to life, liberty, property, the ownership of our minds, bodies, and labor, and the pursuit of happiness.  The key to the preservation of our rights is a rich and vibrant private sector where we are free to pursue our own values, to trade goods, services, and ideas, and to associate with others of our choice for the purposes of our choice.

There are many other reforms needed to fully protect all of the rights of the individual.  Some of these will have major economic implications as well.  For instance, all education should become private education.  It is not the business of the government to educate the people, since that would be an infringement of the rights of many and government has a very serious conflict-of-interest problem with respect to teaching about its legitimate functions, about ethical matters that must enter into issues affecting the freedom of conscience of the People, and about the history of failure of big government and the success of highly limited government.  Much more needs to be done to protect privacy, the freedom of movement, freedom of speech and the written word whether in press or on the Internet, freedom of assembly, freedom of association, freedom of contract, freedom of trade and the ownership of one's own labor and its fruits, the freedom to create a domestic partnership contract with any consenting adults of one's choice, and the freedom of property ownership, including that in one's mind and body.

Obama: I will go through the budget line by line

Do you recall when Obama said he would go through the budget line by line and cut wasteful programs?  Do we call this a failed promise?

On the one hand, perhaps he could not keep this promise because his Democrat Senate has never produced the budget they are required by law to produce.  Not one single budget in the entire Obama presidency has ever emerged from the Democrat Senate.

On the other hand, what kind of President cannot show even enough leadership to get the Senate well-controlled by his own party to produce a budget as required by law.  Recall that the President is supposed to execute the laws, which among other things means he should surely be putting unrelenting pressure on the Senate to produce a budget.  Besides, he should be eager to keep his promise to go through that budget line by line to eliminate wasteful spending.  But not this man.  He is more a celebrity than a leader.

The Good and the Bad in the Lame Duck Congress Bill to Avoid a Huge Tax Increase

The Lame Duck Congress bill about to be approved by the Senate to prevent a huge tax increase mixes good measures with bad measures.  In evaluating the overall desirability of the bill, we need to remember that this is a Congress whose complete record is one of huge overspending and micromanagement of individuals and the economy by central planners.  The recent election will change the character of the incoming Congress in January, but did nothing to change the individual characters of the members of the Lame Duck Congress.  They remain at heart taxers who will spend still much more than tax revenues will allow.  The great news is that the big spenders will be constrained in the next Congress by a dose of more spending-responsible Congressmen.  In the meantime, this bill is much less bad than one would expect from this Lame Duck Congress, though far short of what it should be.

Some of the bill provision evaluations I will make below are not based on the model of a truly legitimate government.  They are based on the situation we live in with a federal government having tax and spending levels about three or four times what they would legitimately and constitutionally be.  They are also based on the fact that the reason we are in a deep recession still owes in large part to the Obama and the Progressive Socialist controlled present Congress.  These judgments are made in the context of these facts and out of concern for the present suffering of many Americans.

The Good:

• Extension for 2 years of the income tax brackets of the Bush tax cuts.
• Extension for 2 years of the reduced capital gains and dividends taxes of the Bush tax cuts.
• Extension of adoption expense tax credit.
• Continuation of the American Opportunity Tax Credit for college tuition for 2011 and 2012. Context dependent.
• Extension of the Child Tax Credit.
• Extension of the increased amount of the alternative minimum tax exemption and for nonrefundable personal credits.
• Continued elimination of the death tax on estates of less than $5 million.
•  100% expensing for small business investment up to $125,000 in 2012 and up to $25,000 thereafter.
• Deduction of State and local sales taxes, which rights wrongful discrimination against states with no or low income taxes.
• Research credit for businesses.
• 15-year depreciation for some leasehold improvements, restaurant buildings, and retail improvements.
• Mortgage insurance premium tax deduction extension through 2011.

The Bad:

• Extension of unemployment benefits for up to 99 weeks for another 13 months, thereby ensuring that businesses under strain pay for unemployment to remain higher than it otherwise would be.  Companies are not responsible for people being unemployed up to 99 weeks.  Anyone unemployed that long is lacking severely in self-initiative.
• 2% reduction in the 12.4% Social Security tax bringing it down to 10.4% and further underfunding the highly underfunded Social Security Ponzi Scheme.  This is almost a toss-up evaluation since the Social Security tax money is really treated as though it is general fund money.  It has been a fiction that it is dedicated to the Social Security program and this contributes to revealing that fiction.
• A 35% tax on estates valued at $5 million or more, which will badly damage many businesses and immorally attacks the results of many years of productive labor.
• Extension of the Earned Income Tax Credit through 2012, which is unearned income.
• Increased gift taxes.
• Incentives for biodiesel and renewable diesel.
• Credit for refined coal facilities.
• New energy efficient home credit.
• Tax credits and subsidies for alternative fuel and fuel mixtures.
• Extension of the cash grants of 30% for renewable energy projects with no profits due to lack of economic usefulness.
• Extension of ethanol production supports, which is a numskull program.
• Energy-efficient appliance credits, which should need no credits if they make sense.
• Alternative fuel vehicle refueling property tax credit extension.
• Exclusion from income of employer benefits for mass transit use and parking.
• Indian employment tax credit, which is clearly racial discrimination.
• Accelerated depreciation of business property on Indian reservations.
• Tax incentives for investments in the District of Columbia.
• Tax credits dedicated to Puerto Rico, the Virgin Islands, and American Somoa.
• Work Opportunity Credit to business for hiring certain favored groups with high unemployment.

In addition to these provisions, there are many more.  Since the bill itself consists of a list of how a line or phrase in a previously passed law is changed, it is very difficult to assess just what the effects of many provisions are.  This is the studied way in which our Congress makes its activities transparent!  This practice keeps both citizens and Congressmen alike from reading the bills before the Congress.  We are really governed by the staff of the Congressmen and the lobbyists who assist them with the writing of these obscure documents.

This bill is loaded with nonsense that should not be in it.  At the same time, there are also many good provisions.  Compared to what we have seen in the prior actions of this Congress, this is a good bill.  It has too many additional spending components such as the extension of unemployment benefits and a continued commitment to the uneconomic and foolish alternative energy projects.  If it is passed as such, it will not be as good a bill as one which would likely be passed in January when the new Congress begins its session.  There are advantages to letting everyone know next year's tax rates, but this bill also has some sad pork in it.  At this point, I think it is pretty much a toss-up whether this bill is passed now or a better bill is passed in a few weeks. 

I am leaning marginally toward the somewhat better bill in a few weeks in the next Congress though.  That is also not without its problems.  The main problem is that one would like the new Congress to get right to work on spending cuts.  Unfortunately, the Progressive Socialists still control the Senate and occupy the White House, which means the improved Congress is not likely to be able to make cuts in previously funded programs.  Fortunately, this now Lame Duck Congress has not done its budget approval job and the new Congress will be able to do much more to constrain the current fiscal year spending than would otherwise be the case.  If the present bill to stop the massive tax increase is passed in this Congress, the next one will be able to more quickly get down to business on spending cuts.  It also needs very badly to cut the highest in the world American corporate tax rate.  That is not too bad an alternative situation.