Posted on 11/20/2009 1:34:18 PM PST by arthurus
As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC.
Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the second greatest secular bear market bounce in history.
(Excerpt) Read more at seekingalpha.com ...
“This morning’s news that housing starts “unexpectedly” dropped by 11 percent month on month is consistent with my grim view of the American economy. The crystal-meth monetary policy at the Fed makes everyone feel better, until they don’t. The nonstop rise in the price of dollar hedges tells us that it can’t last forever. Large balance sheets attached to the Fed’s money pump can show profits, and the price of spread assets (as PIMCO’s Bill Gross keeps emphasizing) is stupid rich. But at the capillary level, through, the economy is dying and gangrene is setting in.”
Consumers are toast.....This is the bottom line. No more spending for a long time.
So why don't the egos in Washington do this? Because the ability to dole out yours and my money to someone else gives them political power...pure and simple. I say we clean house starting next year and not quit until they're all out on their ass.
Let's give credit, where it's due:
"The 0baMao Depression"
we’re not yet. A lot of pre-Obama policies are still in place.
Why our economy is subject to political hacks and not economist and real business people I will never understand.
I’m having a depression. Probably won’t recover until November 2010, if ever. Obamacorn is destroying my kids future!
The Democrats get elected through handouts. They can’t fix the economy, because they would then have to admit they were wrong the whole time and enact free market solutions. The recession will go deeper. The Democrats will just increase spending, continue the devaluing of the dollar, and continue blaming Bush. It’s all they can do at this point.
What you posted describes my thinking many years back.
And then, my thoughts and passions ended up here:
Geitner tried to use this dodge in Congressional testimony yesterday and sorta got away with it. He blamed the current situation on the previous eight years of Bush. True, Bush screwed things up, but Obama doesn't have a clue and Timmy is in WAY over his head. The American people just pushed Obama's rating below 50% for the first time today and part of the reason is because they're getting sick and tired of the Blame Bush excuse. It's your ship now, sir, so kick out the Marxists and try to do something right with it.
“To end the recession, make permanent cuts in both personal and corporate tax rates.”
Not only stimulative but cheaper than the “stimulus” spending.
its the govt workers vs the peasants....
we have to move our money and our enterprise underground somehow....we must stop funding this corruption.....
I have to say that I am not proud of my country anymore....all of this....our beloved parents fighting in WW2 and for what?....for what?
Taken from a discussion of real estate on itulip.com, here is another list of why things are not rosy:
9.64 % of outstanding loans are not giving cashflows to the banks - Check
The Banks “assets” are deteriorating as the house prices fall - Check
Banks are marking these impaired assets to fantasy -Check
10.6% fall in New housing starts in October -Check
Liquidity at Banks (for a Buffer) is at all time Highs -Check
Banks reluctant to write new loans - Check
Borrowers reluctant to take on “new debt” - Check
Credit Cards are being removed from circulation at alarming pace- Check
C/C interest rates @ 10x prime cost- Check
The Government is the only buyer of Mortgages -Check
Delinquency rate does not include those undergoing F/closure -Check
Fannie Mae is losing dollars at an alarming rate - Check
New Unemployed of 500,000 Americans each week is acceptable - Check
S&P at PE ratios never seen before - Check
Canary in the coal mine - Gold - has flown away - Check
US $ depreciating to Bum paper - Check
T- Bills for Jan & Feb 2010 now Negative - Check
FIDC wants to borrow 3 years of your money from banks to Boost its ammo for Zombies -Check
No one is talking Green shoots - Check
The Chamber of Commerce in a town where my family owns some commercial property is offering discounts on gift cards for local businesses.
Think about that one for a moment, folks.
ObaMao’s intent. Kill the currency, bring in the amero, kill the country bring in the NAU.
You got that right. Globalism is nothing more than international communism. The global elitists are the pigs and we are the rest of the animals, right out of Orwell’s Animal Farm. Our country has been systematically dismantled by these guys (through their puppet politicians) so we have no choice but to accept whatever they ram down our throat (or so they think).
The only thing going for us is 80 million armed citizens that no military or police force on the planet would want to deal with if push came to shove.
There is a very good reason for the Rebate. It is the most brilliant part of the legislation once its purpose and the history behind it are understood.
But take for example your objection, that the rebate allows government to “hand out money”. Well, government can do that regardless of whether there is a FairTax or not.
But if the FairTax is passed, enacted and survives, the 16th Amendment will be repealed as part of the FairTax Act.
Now think of that, no more 16th Amendment. That means we fall back to the original two forms of taxation, ‘indirect’ and ‘direct with apportionment’. I don’t believe under the original constitutional provisions for these two forms of taxes that our government can return or “hand out” any money for tax purposes that is not in the same amounts for every qualified taxpayer. In fact, I know this to be the case from the lawyer and economist who is an architect of the legislation.
The FairTax ‘tax’ is an indirect tax and its Rebate must be handled as an indirect credit. That means it must be rebated in the same amount to every qualified person.
But that does not and never does stop government from using any of its tax revenues for redistribution. But a Tax Rebate has to be handled indirectly meaning no favorotism.
Take Social Security. There are many earners who pay much much more into the system than others yet they get the same as everyone else who has paid into the system to qualify for full benefits. The reason is that the Social Security Tax is viewed as an indirect tax, it is the same percentage on gross wages for everyone. If someone chooses or commands a greater wage, it is their choice, just as it is a person’s choice to spend more than others. But it is true that once the 16th Amendment is repealed, Social Security may require an alteration in its collection authority.
The bottom line is that there will be no end of the Income tax (without apportionment) without the FairTax as it is now with its Rebate provision. Because otherwise a return to pre-1913 excise tax America is a return to the problems that brought about the Income tax (without apportionment) in the first place. It was a mistake to legalize a direct tax on incomes without apportionment with passage of the 16th Amendment. But the reasons Americans went along with it are because they knew there was a built-in unfair bias in the excise system and because it did not apply to 98% of American workers at the time.
Americans in 1913 could not do a FairTax because they did not have the technological capability and also the technical administrative experience to administer it. But all of that functionality is commonplace today. Our government can easily collect tax revenues from retailers or from State Tax Collectors. They can also mail out tax rebates easily and that has been demonstrated recently. So the capability and ability are there now, but it wasn’t there in 1913.
Reasons:
Prior to 1913, Americans were fed up with what was called the ‘disproportionate burden’ of excise taxes. Small tenant farmers were incensed that they were required to fund federal government while the land barons they paid crop fees to (rents) paid nothing at all. In short, the Founders had innovated a wonderful simple system that was based on principles of fairness, but the fairness aspect of it got twisted around between property owners and workers. So the solution at the time was the Marxist graduated income tax.
The original tax code in 1913 was 14 pages long, it was a flat tax of only 7% on the richest 2% of Americans. Most Americans thought they would never see an Income tax.
But because the 16th Amendment did not carefully limit the definition of ‘Income’, it became a game to change, alter its meaning or to define certain income as nonincome or nontaxable income, etc. The result is the 16th Amendment is like a single cancer cell that grows and metasticizes rapidly through the great idea known as the American Experiment. We have had five major tax reforms since 1913, each reform attempted to make the tax code simpler, fairer and flatter. This is why a Flat Tax will never work because within a decade it will no longer be flat.
Since the last major tax reform signed by Ronald Reagan in 1986, there have been more than 17,000 tax code amendments and a quadrupling of tax gaming lobbyists inside the Beltway. As it is now there are about 50,000 members of the DC aristocracy that pull up the draw bridge to their Income tax castle. Their potential opposition is in the 144 million filers who are in the process of being educated. On average 800 persons are joining as members of the FairTax grassroots every day. It only takes about 3000 committed FairTax activists in each congressional district to turn the elected representative to the FairTax.
The Income tax without apportionment was first levied unconstitutionally in 1861 by Lincoln. It was shot down by the Supreme Court then and several times after as subsequent Congresses tried to repeat that form of taxation in some variety or another.
It took the Income tax without apportionment 52 years to become legalized by the 16th Amendment. The FairTax has only been around about 12 years. It is necessary to think years out about the FairTax and to be committed to a lifetime of advocating for its passage. Many of us would like to see it passed in 2013, exactly 100 years after the Great Mistake.
Even without the 16th Amendment the Income tax is not illegal as long as it is appropiated ‘with apportionment’ meaning collected from states according to their census. The Income tax with apportionment was a direct tax and was constitutional. Direct taxes were allowed for emergencies such as war or for grand projects such as canals or large bridges. There is a long history here and knowing it helps to explain the brilliance behind the FairTax Rebate.
So as the uninformed call for cuts in corporate tax rates, downsizing government, cutting spending and so on, just be aware that all of the issues along that vein will be lost within a few sessions of Congress. All of that disappearing act that the uninformed feel are the ‘solution’, all of such disappearances are brought to them courtesy of tax aristocrats using the 16th Amendment as their business license. They will slowly add doses of 16th Amendment poison to evade and counter cuts in tax and spending. In short, a tax cut victory if ever achieved will be short-lived unless the 16th Amendment is sheared off the Constitution. And the the question will then be how to collect taxes? Under what code? The answer is the FairTax.
Give it some more thought. Study tax history and read the FairTax legislation. I am sure that whatever your tax ideas, you will want them to stand on a firm foundation, without being twisted and perverted shortly after and without feeling like a fool that you did not understand the American history of taxation.
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