Republican Presidential debate in Iowa tonight
I watched the debate tonight and it was quite interesting.
Prior to the debate I liked Ron Paul and Herman Cain; I was neutral to Bachman; I did not care much for Romney, Pawlenty, or Huntsman; and I really did not care for Santorum or Gingrich.
The clear winner of the debate was former Speaker of the House Newt Gingrich. He won by a large margin.
My favorite two candidates before the debate are still my favorite candidates. I thought Ron Paul had a mediocre debate performance and I thought Mr. Cain fared pretty well; especially as the debate progressed.
I am still unsure about Bachman. She portrayed herself as a fighter and likely appealed to many members of the Tea Party.
I thought Romney did fairly well. I thought Pawlenty lost the debate and I think his Presidential ambitions are over unless he does well in the Saturday Straw poll. I was pretty impressed with Huntsman. I like the fact that he does not hide from his record and does not try to conform with the rest of the Republicans.
Santorum is a candidate I really do not care for. This debate did not change that. I also do not care for Gingrich; however, he won the debate and really was impressive.
Rick Perry will join the race on Saturday. That will bring the field to nine. I hope that Santorum and Pawlenty both drop out of the race in the next week or two. Neither has ANY chance of winning and they should get out of the way of the stronger candidates.
Here is a ranking of the nine potential candidates and I have listed them in the order I like them. Note that it is early and I expect this list to change often as I learn more about them. I really need to learn more about Perry.
- Ron Paul
- Herman Cain
- Perry
- Huntsman (Which kind of scares me)
- Bachman
- Romney
- Gingrich
- Pawlenty
- Santorum
Michigan Food Stamp Program Abuse
I am sick and tired of listening to liberals who continually cry and lie and say that we cannot cut government spending. Give me a break…
We could cut Government spending by 10% or more just by eliminating waste, fraud, and abuse. We could cut another 10% by eliminating programs that should not exist, combining programs, etc.
The Federal food stamp program is chock full of abuse. The Food Stamp program will cost about 85 billion this year. Currently about 46 million Americans are on food stamps; mostly children in homes with a single parent. To qualify you must have annual income that is 130% of the Federal poverty income or less. For a family of four that is $29,055. In fact one in every seven Americans is a beneficiary of the food stamp program. The average recipient receives about $1,600 in annual benefits. The remaining eleven billion is used in administrative costs and is split between the Federal government and the States.
The United States is in BIG trouble, Part 2
Gross Domestic Product reflects the overall size of the economy, public sector and private sector. Gross National debt measures the total amount of debt the government currently owes on a cash basis. In other words, this is money that has already been borrowed and spent.
Economists have been arguing about how much debt is acceptable for as long as there have been economists. Recently there was a detailed study that claimed that gross national debt is not a hindrance to economic growth until it gets above about 90% of GDP. These studies show that when a country gets a gross national debt above 90% it loses about 1% from its annual economic growth. That is because the country is spending a lot of money to pay interest on past spending and this money cannot be used to pay for current government spending; it is being used to pay for past sins. Losing 1% per year from annual growth is of critical importance.
More Americans need to pay Federal income taxes
Did you know that between 1950 and 1990 on average 21% of the Federal income tax returns filed resulted in the taxpayer paying no Federal income tax or getting back more then was paid into the system? Also please understand that MANY low income Americans (and many criminals) do not even file Federal income tax returns. I believe that this was the original intention of the Progressive Federal income tax. I believe that Congress intended that those in poverty would not pay Federal income taxes.
From 1990 - 2000 (Mostly due to the policies of Democratic President Bill Clinton and a Republican Congress) this percentage increased to 25%. This is due to the child tax credit which helps low and middle income Americans with kids 16 years old or below and due to an expansion of the earned income tax credit which benefits the working poor.
From 2001 - 2010 (Due to BOTH parties) this percentage has increased to just under 50%. This is due to the Bush tax cuts of 2001 and 2003 and then the Obama tax cuts of 2009 and the recession itself.
As everyone knows I favor a national sales tax; that being said that is not going to happen. So the next best thing is to start fixing the current system.
One of the first things we need to do is to ensure that a lot more people pay at least one dollar in Federal income tax. In fact I think we should change the tax code so that 80% of all Americans who file Federal income tax returns pay at least one dollar in Federal income tax.
Mike
We are so screwed…
Readers of this blog know that I greatly dislike debt. Readers of this blog also know that I feel that American citizens, units of local Government, the fifty states, and the Federal Government have accumulated an incredible amount of debt. In fact the amount of debt accumulated in the United States is staggering and completely unsustainable.
S&P downgraded the Federal debt of the United States to AA+. This is not the end of the United States; however, when the other two major credit agencies follow suit this will be very damaging to our economy and to the world economy. There is little doubt that the other two major ratings agencies will downgrade the US debt in the next couple of years… It is just a matter of time…
Realistically there are two main reasons the US Federal debt was downgraded. Both Republicans and Democrats are desperately trying to point their fingers at each other to gain advantage in the 2012 elections and the truth is something all Americans need to understand. Our current problems are due to the Democrats AND the Republicans. Both parties are AT LEAST 40% responsible for our current situation.
The first reason cited was the fact that our political system is so dysfunctional that it can no longer be relied upon to craft a plan that will deal with the countries unsustainable financial situation. I 100% agree with this assessment by S&P. BOTH parties are dysfunctional on this issue. BOTH parties are spending all of their efforts trying to improve their electoral prospects in 2012 rather than crafting a long term plan. Heck just listen to the partisan attacks the parties have leveled at each other in the last 24 hours…
The second reason is the long term fiscal situation itself. Our tax revenues as a percentage of GDP are the lowest in this country in the last fifty years and Federal spending is 25% of GDP. Federal spending has not been this high since 1943, 1944, and 1945. Gross Federal debt is 100% of GDP. The annual deficit is about 10% of GDP.
Please understand that the last year the Federal budget was balanced was 1957. Per the current CBO projections the Federal budget will NEVER be balanced again. Your read that right, based on current budget projections the Federal budget will NEVER be balanced again.
The idiots in DC; both Dems and Reps need to quit screwing around and they need to get together and make a serious long term fiscal plan and they need to stick to it. This plan needs to cut a great deal of Federal spending and it needs to generate some additional tax revenue. Nothing else will work. Our problems are so serious that the problem can no longer be fixed just by cutting spending.
Mike
The United States is in BIG trouble, part 1
The long term financial outlook of the United States is grim. Each year the annual long term Financial Outlook produced by the Congressional Budget Office is at least a little “grimmer” than it was the year before.
The long term finances of the United States deteriorated somewhat from 2001 - 2007. The rate of deterioration has escalated since 2007. The long term financial outlook of the United States is significantly worse today that it was back in 2000. This is not a political statement, it is a fact.
Back in 2008 I started working on a post similar to this. I went back and read that research today and it is stunning how much worse things are today than they were just three short years ago.
Worse yet Washington DC seems oblivious to the magnitude of the problem and seems determined to continue to “kick the can down the road.”
This series of posts will analyze the long term fiscal outlook of the United States.
My wife and I have discussed this in detail over the last few years. To be honest with you we have changed our financial plans and investments due to the grim outlook for the United States.
Mike
Effects of the Bush tax cuts on tax revenues
The Republican Party, conservatives, and most people in favor of smaller government have a common belief about tax cuts; they tend to believe that lowering marginal tax rates will increase revenues. They feel this way because they think that lowering tax rates will increase the size of the economy and that the increased size of the economy will generate more tax revenues.
Interestingly enough liberals have done many studies that refute this belief. Conservatives have done similar studies with markedly different results; their studies support their beliefs. The truth of the matter is these studies have different results because they use different statistics. Both sides use statistics that support their beliefs.
I have done extensive research on this over the last several years and have always felt that both sides lie; the truth is somewhere in the middle.
I spent some time in the last couple of months analyzing this again. The Bush tax cuts of 2001 and 2003 were significant tax cuts that lowered tax rates and increased deductions and credits for both companies and individuals. There were smaller tax cuts implemented in 2009 in order to combat the financial recession.
I analyzed several statistics (all of which I got from the OMB):
- Annual GDP, the overall size of the economy
- Annual Individual Federal income tax receipts
- Annual Corporate Federal income tax receipts
- From 2001 - 2010 GDP grew a total of 48%. This is a great growth rate.
- Federal income tax receipts were LESS than they were in 2000 in SEVEN of the ten following years.
- Federal individual tax receipts as a percentage of GDP dropped from an average of 8.5% of GDP to only 7.6% of GDP.
- Federal individual tax receipts as a percentage of GDP was lower in EACH of the following ten years than it was in 2000.
Debt ceiling theatrics, part 3
The debt ceiling theatrics in DC would be comical if they were not so serious…
It is hard to believe how idiotic Republicans AND Democrats are behaving. The US is on an unsustainable path as far as our National debt goes and the idiots in DC are posturing for the 2012 election rather than doing their jobs.
Unless you are a partisan hack you should realize:
- Each party accumulated AT LEAST 40% of our current national debt
Debt ceiling theatrics, part 2
Well it is July 20th and we are less than two weeks from a default of the Federal Government.
I am going to discuss the performance of the three main players:
First is President Obama. He has shown no leadership on this issue and has NOT proposed a formal plan. Instead he has spent his time bashing the plan of the House Republicans. His performance has been dismal.
Next is the Democratic Senate. They have completely ignored their responsibilities and instead are wasting time and naming Post Offices. The Democratic Senate has not even proposed a budget in the last 800 days. Yesterday “the Gang of Six” did release a vague and undefined plan. There is no way this plan can pass the Senate in time. Their performance has been dismal.
The House Republicans have dragged their feet for too long. They did vote on a long term plan a couple of months ago (The Ryan plan) and they should get credit for that. They just passed a cut, cap, and balance act that I will need to analyze further. I do like the idea of cut, cap, and balance. The “devil is in the details” and I will read through this legislation and let you know what I think. The Republican House should have passed the cut, cap, and balance legislation two months ago. The House Republicans have done better then the Senate Democrats and President Obama. That being said they should be willing to compromise and stop acting like it is “their way or the highway” because that is wrong.
Mike Sylvester
The truth about corporate income taxes
In an earlier post we started discussing corporate income taxes down in the comment section. The Federal income tax system for both individuals and corporations is completely broken. As the readers of this blog know I support abolishing all income taxes and instead using a National Sales Tax. That being said; our current members of Congress will not abolish the current system because they use it to help their re-election chances.
My main problems with our current corporate income tax structure are:
- It is far too complicated; in fact it is so complicated that hundreds of thousands of lawyers and accountants are necessary. It is almost impossible for a small business to file their own corporate tax returns. Please realize that I am a Partner in a firm that handles corporate income taxes for over one hundred local businesses. I am very familiar with this topic. I make my living by helping local businesses comply with the current tax laws.
- It puts US companies at a disadvantage against their foreign competitors. This has helped move millions of jobs overseas.
- Members of Congress help choose winners and losers by giving tax credits to certain industries and not other industries.
