Sunday, June 29, 2008
Eugene Armstrong Beheading
http://www.conservativenewswarriors.com/VIDEO-BEHEADING-Eugene-Armstrong.WMV
Saturday, June 28, 2008
State frees teachers to criticize evolution
Louisiana Gov. Bobby Jindal this week signed into law the Louisiana Science Education Act, which allows school districts to permit teachers to present evidence, analysis and critique of evolution and other prevalent scientific theories in public school classrooms.
The law came to the governor's desk after overwhelming support in the legislature, including a unanimous vote in the state's Senate and a 93-4 vote in the House.
The act has been criticized by some as an attempt to insert religion into science education and hailed by others as a blow for academic freedom in the face of pressure to ignore flaws in politically correct scientific theories.
Robert Crowther, director of communications for The Discovery Institute, a Seattle-based think tank on science and culture, called the act necessary.
In an article posted on The Discovery Institute's evolution news website, Crowther wrote, "The law is needed for two reasons. First, around the country, science teachers are being harassed, intimidated, and sometimes fired for trying to present scientific evidence critical of Darwinian theory along with the evidence that supports it. Second, many school administrators and teachers are fearful or confused about what is legally allowed when teaching about controversial scientific issues like evolution. The Louisiana Science Education Act clarifies what teachers may be allowed to do."
Specifically, the act allows teachers in the state's public schools to present evidence both for and against Darwinian theories of evolution and allows local school boards to approve supplemental materials that may open critical discussions of evolution, the origins of life, global warming, human cloning and other scientific theories.
Teachers are still required by the act to follow the standardized science curriculum, and school districts are required to authorize both the teachers' classes and additional materials. The state's Board of Elementary and Secondary Education will have the power to prohibit materials it deems inappropriate, and the act prohibits religious instruction.
Section 1D of the act states that the law "shall not be construed to promote any religious doctrine, promote discrimination for or against a particular set of religious beliefs, or promote discrimination for or against religion or nonreligion."
Despite section 1D, many national voices, including the Americans United for Separation of Church and State, a New York Times editorial, and the American Civil Liberties Union opposed the measure.
Marjorie Esman, state director of Lousiana's ACLU told the New Orleans Times-Picayune, "To the extent that this might invite religion in the public school classroom, we will do everything we can do to keep religion out."
John West, a senior fellow of the Discovery Institute, however, said opponents of the bill are misunderstanding it. Rather than being about infusing intelligent design or creationism into the classroom, he contends, the bill is about giving teachers the freedom to talk about the debates that already exist in science, even among evolutionists themselves.
"This bill is not a license to propagandize against something they don't like in science," West told the Times-Picayune. "Someone who uses materials to inject religion into the classroom is not only violating the Constitution, they are violating the bill."
Gov. Jindal released a statement at the time of the signing that read, in part: "I will continue to consistently support the ability of school boards and (the state Board of Elementary and Secondary Education) to make the best decisions to ensure a quality education for our children."
The law came to the governor's desk after overwhelming support in the legislature, including a unanimous vote in the state's Senate and a 93-4 vote in the House.
The act has been criticized by some as an attempt to insert religion into science education and hailed by others as a blow for academic freedom in the face of pressure to ignore flaws in politically correct scientific theories.
Robert Crowther, director of communications for The Discovery Institute, a Seattle-based think tank on science and culture, called the act necessary.
In an article posted on The Discovery Institute's evolution news website, Crowther wrote, "The law is needed for two reasons. First, around the country, science teachers are being harassed, intimidated, and sometimes fired for trying to present scientific evidence critical of Darwinian theory along with the evidence that supports it. Second, many school administrators and teachers are fearful or confused about what is legally allowed when teaching about controversial scientific issues like evolution. The Louisiana Science Education Act clarifies what teachers may be allowed to do."
Specifically, the act allows teachers in the state's public schools to present evidence both for and against Darwinian theories of evolution and allows local school boards to approve supplemental materials that may open critical discussions of evolution, the origins of life, global warming, human cloning and other scientific theories.
Teachers are still required by the act to follow the standardized science curriculum, and school districts are required to authorize both the teachers' classes and additional materials. The state's Board of Elementary and Secondary Education will have the power to prohibit materials it deems inappropriate, and the act prohibits religious instruction.
Section 1D of the act states that the law "shall not be construed to promote any religious doctrine, promote discrimination for or against a particular set of religious beliefs, or promote discrimination for or against religion or nonreligion."
Despite section 1D, many national voices, including the Americans United for Separation of Church and State, a New York Times editorial, and the American Civil Liberties Union opposed the measure.
Marjorie Esman, state director of Lousiana's ACLU told the New Orleans Times-Picayune, "To the extent that this might invite religion in the public school classroom, we will do everything we can do to keep religion out."
John West, a senior fellow of the Discovery Institute, however, said opponents of the bill are misunderstanding it. Rather than being about infusing intelligent design or creationism into the classroom, he contends, the bill is about giving teachers the freedom to talk about the debates that already exist in science, even among evolutionists themselves.
"This bill is not a license to propagandize against something they don't like in science," West told the Times-Picayune. "Someone who uses materials to inject religion into the classroom is not only violating the Constitution, they are violating the bill."
Gov. Jindal released a statement at the time of the signing that read, in part: "I will continue to consistently support the ability of school boards and (the state Board of Elementary and Secondary Education) to make the best decisions to ensure a quality education for our children."
Saturday, June 21, 2008
BUSH'S AMERICA: 100 PERCENT AL-QAIDA FREE SINCE 2001 (Ann Coulter)
In a conversation recently, I mentioned as an aside what a great president George Bush has been and my friend was surprised. I was surprised that he was surprised.
I generally don't write columns about the manifestly obvious, but, yes, the man responsible for keeping Americans safe from another terrorist attack on American soil for nearly seven years now will go down in history as one of America's greatest presidents.
Produce one person who believed, on Sept. 12, 2001, that there would not be another attack for seven years, and I'll consider downgrading Bush from "Great" to "Really Good."
Merely taking out Saddam Hussein and his winsome sons Uday and Qusay (Hussein family slogan: "We're the Rape Room People!") constitutes a greater humanitarian accomplishment than anything Bill Clinton ever did -- and I'm including remembering Monica's name on the sixth sexual encounter.
But unlike liberals, who are so anxious to send American troops to Rwanda or Darfur, Republicans oppose deploying U.S. troops for purely humanitarian purposes. We invaded Iraq to protect America.
It is unquestionable that Bush has made this country safe by keeping Islamic lunatics pinned down fighting our troops in Iraq. In the past few years, our brave troops have killed more than 20,000 al-Qaida and other Islamic militants in Iraq alone. That's 20,000 terrorists who will never board a plane headed for JFK -- or a landmark building, for that matter.
We are, in fact, fighting them over there so we don't have to fight them at, say, the corner of 72nd and Columbus in Manhattan -- the mere mention of which never fails to enrage liberals, which is why you should say it as often as possible.
The Iraq war has been a stunning success. The Iraqi army is "standing up" (as they say), fat Muqtada al-Sadr --the Dr. Phil of Islamofascist radicalism -- has waddled off in retreat to Iran, and Sadr City and Basra are no longer war zones. Our servicemen must be baffled by the constant nay-saying coming from their own country.
The Iraqis have a democracy -- a miracle on the order of flush toilets in that godforsaken region of the world. Despite its newness, Iraq's democracy appears to be no more dysfunctional than one that would condemn a man who has kept the nation safe for seven years while deifying a man who has accomplished absolutely nothing in his entire life except to give speeches about "change."
(Guess what Bill Clinton's campaign theme was in 1992? You are wrong if you guessed: "bringing dignity back to the White House." It was "change." In January 1992, James Carville told Steve Daley of The Chicago Tribune that it had gotten to the point that the press was complaining about Clinton's "constant talk of change.")
Monthly casualties in Iraq now come in slightly lower than a weekend with Anna Nicole Smith. According to a CNN report last week, for the entire month of May, there were only 19 troop deaths in Iraq. (Last year, five people on average were shot every day in Chicago.) With Iraqi deaths at an all-time low, Iraq is safer than Detroit -- although the Middle Eastern food is still better in Detroit.
Al-Qaida is virtually destroyed, surprising even the CIA. Two weeks ago, The Washington Post reported: "Less than a year after his agency warned of new threats from a resurgent al-Qaida, CIA Director Michael V. Hayden now portrays the terrorist movement as essentially defeated in Iraq and Saudi Arabia and on the defensive throughout much of the rest of the world, including in its presumed haven along the Afghanistan-Pakistan border."
It's almost as if there's been some sort of "surge" going on, as strange as that sounds.
Just this week, The New York Times reported that al-Qaida and other terrorist groups in Southeast Asia have all but disappeared, starved of money and support. The U.S. and Australia have been working closely with the Philippines, Malaysia and Indonesia, sending them counterterrorism equipment and personnel.
But no one notices when 9/11 doesn't happen. Indeed, if we had somehow stopped the 9/11 attack, we'd all be watching Mohammed Atta being interviewed on MSNBC, explaining his lawsuit against the Bush administration. Maureen Dowd would be writing columns describing Khalid Sheik Mohammed as a "wannabe" terrorist being treated like Genghis Khan by an excitable Bush administration.
We begin to forget what it was like to turn on the TV, see a tornado, a car chase or another Pamela Anderson marriage and think: Good -- another day without a terrorist attack.
But liberals have only blind hatred for Bush -- and for those brute American interrogators who do not supply extra helpings of bearnaise sauce to the little darlings at Guantanamo with sufficient alacrity.
The sheer repetition of lies about Bush is wearing people down. There is not a liberal in this country worthy of kissing Bush's rear end, but the weakest members of the herd run from Bush. Compared to the lickspittles denying and attacking him, Bush is a moral giant -- if that's not damning with faint praise. John McCain should be so lucky as to be running for Bush's third term. Then he might have a chance.
I generally don't write columns about the manifestly obvious, but, yes, the man responsible for keeping Americans safe from another terrorist attack on American soil for nearly seven years now will go down in history as one of America's greatest presidents.
Produce one person who believed, on Sept. 12, 2001, that there would not be another attack for seven years, and I'll consider downgrading Bush from "Great" to "Really Good."
Merely taking out Saddam Hussein and his winsome sons Uday and Qusay (Hussein family slogan: "We're the Rape Room People!") constitutes a greater humanitarian accomplishment than anything Bill Clinton ever did -- and I'm including remembering Monica's name on the sixth sexual encounter.
But unlike liberals, who are so anxious to send American troops to Rwanda or Darfur, Republicans oppose deploying U.S. troops for purely humanitarian purposes. We invaded Iraq to protect America.
It is unquestionable that Bush has made this country safe by keeping Islamic lunatics pinned down fighting our troops in Iraq. In the past few years, our brave troops have killed more than 20,000 al-Qaida and other Islamic militants in Iraq alone. That's 20,000 terrorists who will never board a plane headed for JFK -- or a landmark building, for that matter.
We are, in fact, fighting them over there so we don't have to fight them at, say, the corner of 72nd and Columbus in Manhattan -- the mere mention of which never fails to enrage liberals, which is why you should say it as often as possible.
The Iraq war has been a stunning success. The Iraqi army is "standing up" (as they say), fat Muqtada al-Sadr --the Dr. Phil of Islamofascist radicalism -- has waddled off in retreat to Iran, and Sadr City and Basra are no longer war zones. Our servicemen must be baffled by the constant nay-saying coming from their own country.
The Iraqis have a democracy -- a miracle on the order of flush toilets in that godforsaken region of the world. Despite its newness, Iraq's democracy appears to be no more dysfunctional than one that would condemn a man who has kept the nation safe for seven years while deifying a man who has accomplished absolutely nothing in his entire life except to give speeches about "change."
(Guess what Bill Clinton's campaign theme was in 1992? You are wrong if you guessed: "bringing dignity back to the White House." It was "change." In January 1992, James Carville told Steve Daley of The Chicago Tribune that it had gotten to the point that the press was complaining about Clinton's "constant talk of change.")
Monthly casualties in Iraq now come in slightly lower than a weekend with Anna Nicole Smith. According to a CNN report last week, for the entire month of May, there were only 19 troop deaths in Iraq. (Last year, five people on average were shot every day in Chicago.) With Iraqi deaths at an all-time low, Iraq is safer than Detroit -- although the Middle Eastern food is still better in Detroit.
Al-Qaida is virtually destroyed, surprising even the CIA. Two weeks ago, The Washington Post reported: "Less than a year after his agency warned of new threats from a resurgent al-Qaida, CIA Director Michael V. Hayden now portrays the terrorist movement as essentially defeated in Iraq and Saudi Arabia and on the defensive throughout much of the rest of the world, including in its presumed haven along the Afghanistan-Pakistan border."
It's almost as if there's been some sort of "surge" going on, as strange as that sounds.
Just this week, The New York Times reported that al-Qaida and other terrorist groups in Southeast Asia have all but disappeared, starved of money and support. The U.S. and Australia have been working closely with the Philippines, Malaysia and Indonesia, sending them counterterrorism equipment and personnel.
But no one notices when 9/11 doesn't happen. Indeed, if we had somehow stopped the 9/11 attack, we'd all be watching Mohammed Atta being interviewed on MSNBC, explaining his lawsuit against the Bush administration. Maureen Dowd would be writing columns describing Khalid Sheik Mohammed as a "wannabe" terrorist being treated like Genghis Khan by an excitable Bush administration.
We begin to forget what it was like to turn on the TV, see a tornado, a car chase or another Pamela Anderson marriage and think: Good -- another day without a terrorist attack.
But liberals have only blind hatred for Bush -- and for those brute American interrogators who do not supply extra helpings of bearnaise sauce to the little darlings at Guantanamo with sufficient alacrity.
The sheer repetition of lies about Bush is wearing people down. There is not a liberal in this country worthy of kissing Bush's rear end, but the weakest members of the herd run from Bush. Compared to the lickspittles denying and attacking him, Bush is a moral giant -- if that's not damning with faint praise. John McCain should be so lucky as to be running for Bush's third term. Then he might have a chance.
Oil Price Economics (Critique of Bill O'Reilly)
Bill O’Reilly of Fox News fame states in a recent article that energy independence is a national security issue. With that subject I agree, however, it is the predicate of his argument – namely, that big oil interests (e.g., petrol corporations and OPEC) are responsible for high gas prices – with which I take exception. O’Reilly’s role as a television news anchor notwithstanding, sensationalist rhetoric dodging the point at issue by Red Herring which points to the symptoms of the problem rather than the cause is naive at best and irresponsible at worst.
The US consumer is at fault here, not Iran or the mullahs, for high and rising oil prices. If household balance sheets were in order, our external debt position would not be where it is today. Moreover, if households collectively exercised prudence with regard to their political decisions surrounding the government budget (the other constituent part of our ‘twin deficits’), and specifically regarding our entitlements crises (e.g., Medicare and Social Security), by electing officials who would put an end to the abuse of unaccountable government spending facilitated via the laundering effect of statist welfare mechanisms or by simply voting away these monstrosities via referendum, our spending power, hence the price of goods such as oil, would be much different.
The rationale to back the premise that household profligacy leads to higher prices is thus: the market is more or less efficient in that investors, traders, merchants, and the like do not want to put themselves at more risk than necessary to make a living. Hence, there are limits to supply and demand, limits facilitated by the price mechanism.
(Disclaimer: If you wish to skip the wonkery, pass by this paragraph and you won’t lose any meaning behind my point.) The elasticity of demand for and supply of goods determines what degree supply and demand changes affect the [equilibrium, or market clearing] price. To be sure, the elasticity of demand for oil increases as the price rises as a percentage of household income. However, conjoined with other factors such as necessity and lack of proper substitutes, the relative inelasticity of demand for oil leads to consumption patterns which do harm to household balance sheets in the aggregate. Thus spending, investment, production, and employment growth in the economy is duly constrained. On the supply side, elasticity is affected by, among other things, the existence of raw materials (e.g., crude), production spare capacity (e.g., OPEC’s ability to put more petroleum onto the market), the length of the production process (e.g., refining Canadian tar sands) coupled with factor immobility and time (e.g., drilling and exploration).
American money is worth less than it used to be due to the monetary approach to the balance of payments whereby, according to Krugman and Obstfeld, “An increase in the supply of domestic currency bonds that the private sector must hold raises the risk premium on domestic currency assets,” (524, International Economics Theory and Policy). In other words, our trade deficit is financed, indirectly, via US government treasuries, among other securities. And the more financing activity we pursue (e.g., via household debt) the higher the risk premium we have tacked on to the price of our money. Therefore, purchasing power is directly linked to our spending activities – i.e., there is a causal link between debt and inflation.
The argument can also be made that the US is exporting inflation from wars in the Mid-East as financing overseas adventures puts a strain on government coffers. That oil prices are blowback of government overextension. Yes, that point is well received, however, government defense appropriations still do not make up nearly the proportion of the budget as entitlements (e.g., war = 20% while SS and Medicare = 60%). Moreover, estimates project that 2/3 of our economic growth has been consumption based. This suggests that the impact from government spending on war has had concomitant effects in the domestic economy (on the demand side), which have led to the impacts we now face in terms of our purchasing power [parity] reflected in higher prices.
The strength of the dollar, essentially, is determined by, among other things, our capital position (e.g., net assets or deficits) and future income earning potential coupled with past performance (e.g., market returns) and overall risk (e.g., default rates). When investors, traders, merchants, foreign sovereign wealth holders, etc. look at the US and its indefinitely increasing entitlements overhang (e.g., $42 Trillion Social Security and Medicare debt projected over the next 75 years) coupled with its increasingly stagnant economic growth (e.g., due to normal business cycle fluctuations), lending to decadent and irresponsible Americans looks less than appealing.
The meaning of our present condition lies much deeper than the vacuous notions propagated by populist demagogues of price manipulation for ‘windfall profits.’ The cost of oil is a proxy for a downgrade in [worldwide] investment opinions of the United States and these opinions reside in and are buttressed by rational economic expectations.
The US consumer is at fault here, not Iran or the mullahs, for high and rising oil prices. If household balance sheets were in order, our external debt position would not be where it is today. Moreover, if households collectively exercised prudence with regard to their political decisions surrounding the government budget (the other constituent part of our ‘twin deficits’), and specifically regarding our entitlements crises (e.g., Medicare and Social Security), by electing officials who would put an end to the abuse of unaccountable government spending facilitated via the laundering effect of statist welfare mechanisms or by simply voting away these monstrosities via referendum, our spending power, hence the price of goods such as oil, would be much different.
The rationale to back the premise that household profligacy leads to higher prices is thus: the market is more or less efficient in that investors, traders, merchants, and the like do not want to put themselves at more risk than necessary to make a living. Hence, there are limits to supply and demand, limits facilitated by the price mechanism.
(Disclaimer: If you wish to skip the wonkery, pass by this paragraph and you won’t lose any meaning behind my point.) The elasticity of demand for and supply of goods determines what degree supply and demand changes affect the [equilibrium, or market clearing] price. To be sure, the elasticity of demand for oil increases as the price rises as a percentage of household income. However, conjoined with other factors such as necessity and lack of proper substitutes, the relative inelasticity of demand for oil leads to consumption patterns which do harm to household balance sheets in the aggregate. Thus spending, investment, production, and employment growth in the economy is duly constrained. On the supply side, elasticity is affected by, among other things, the existence of raw materials (e.g., crude), production spare capacity (e.g., OPEC’s ability to put more petroleum onto the market), the length of the production process (e.g., refining Canadian tar sands) coupled with factor immobility and time (e.g., drilling and exploration).
American money is worth less than it used to be due to the monetary approach to the balance of payments whereby, according to Krugman and Obstfeld, “An increase in the supply of domestic currency bonds that the private sector must hold raises the risk premium on domestic currency assets,” (524, International Economics Theory and Policy). In other words, our trade deficit is financed, indirectly, via US government treasuries, among other securities. And the more financing activity we pursue (e.g., via household debt) the higher the risk premium we have tacked on to the price of our money. Therefore, purchasing power is directly linked to our spending activities – i.e., there is a causal link between debt and inflation.
The argument can also be made that the US is exporting inflation from wars in the Mid-East as financing overseas adventures puts a strain on government coffers. That oil prices are blowback of government overextension. Yes, that point is well received, however, government defense appropriations still do not make up nearly the proportion of the budget as entitlements (e.g., war = 20% while SS and Medicare = 60%). Moreover, estimates project that 2/3 of our economic growth has been consumption based. This suggests that the impact from government spending on war has had concomitant effects in the domestic economy (on the demand side), which have led to the impacts we now face in terms of our purchasing power [parity] reflected in higher prices.
The strength of the dollar, essentially, is determined by, among other things, our capital position (e.g., net assets or deficits) and future income earning potential coupled with past performance (e.g., market returns) and overall risk (e.g., default rates). When investors, traders, merchants, foreign sovereign wealth holders, etc. look at the US and its indefinitely increasing entitlements overhang (e.g., $42 Trillion Social Security and Medicare debt projected over the next 75 years) coupled with its increasingly stagnant economic growth (e.g., due to normal business cycle fluctuations), lending to decadent and irresponsible Americans looks less than appealing.
The meaning of our present condition lies much deeper than the vacuous notions propagated by populist demagogues of price manipulation for ‘windfall profits.’ The cost of oil is a proxy for a downgrade in [worldwide] investment opinions of the United States and these opinions reside in and are buttressed by rational economic expectations.
Sunday, March 9, 2008
Saturday, January 26, 2008
Retirees Are Not Part Of A Stimulus Package
A) Further bloat the federal budget deficit and shift even more of the onus of responsibility for debt service onto future generations (mortgage our posterity)
B) Skirt the issue of sustainability of the Social Security fund itself
There is no doubt that these suggestions of including pensioners into the proposed Congressional Fiscal Stimulus package are meant purely for political expediency. George Walker Bush (43rd President) earned plenty of enmity for, among other things, his mission to reform Social Security. By the same token, Fmr. Sen. Fred Thompson (R-TN) lost an election bid to the White House due to his [implacable] stance on Social Security reform. Needless to say, elected officials aren’t willing to risk their jobs proposing confrontational agendas with little broad-based political support.
That is why it is up to the people to demand change, to demand sustainability. Social Security pensioners need long-term solutions, namely, benefits that correct for inflation and measures which keep the government’s budget in the black.
For all intents and purposes, Social Security is bankrupt. It is not currently nor was it ever a trust fund. People cite the percentage of income tax that funds their Social Security pension, but that money could go anywhere. The fact that it is denoted "Social Security withholding" means nothing. That could say, "PETA" withholding, which might be unconstitutional, nevertheless, that money funds whatever the government and its agencies want to spend it on.
Briefly, Social Security is invested as a mutual fund and, being as top heavy* as it is, it earns miniscule returns. In fact, in 2005 (one of the most productive market years in recent history), the Social Security account earned a negative one percent return. Not only does [the fund] receive less income than it needs to survive, but the investment is tantamount to a boat with a leak, taking on water in the middle of the sea. When bureaucrats envisaged Social Security, it had more than 40 payers per retiree; now that ratio is less than ten.
From the government’s perspective, then, the present value of Social Security’s future income stream is increasingly negative. This ‘compact between generations’, therefore, is no longer actuarially sound. If private bankers were in charge of reforming Social Security, however, they would establish individual trust accounts, or government-matched 401(k)s, as it were.
In conclusion, the aforementioned hypothetical would be the best solution to our long-term problem, but this push to include pensioners in the proposed Fiscal Stimulus package is a short-term band-aid, which would be nothing more than a feint to distract attention away from the necessary debate over the future of the Social Security regime itself. As such, this policy (of including pensioners) should not be considered in the final drafting of Congress' bill.
*top heavy. Based on the principle that a large fund requires large gains to achieve a small percentage increase in earnings, whereas small funds require less to achieve more and are therefore more productive, ergo growth oriented. e.g., small caps v. large caps or blue chips. Note: Hedge funds and many other mutual funds remain closed to outside investors to guard against the effects of inefficiency caused by too much money chasing too few opportunities. Big government funding is unproductive for many reasons; this is a prime example.
Ladies and Gentlemen,
Liberals decry lower taxes citing politics of envy while these self-same tax cuts are most beneficial to those with limited incomes - namely, middle and working class families. This message will attempt to put modern debate in an historical context by citing the ancient Roman regime (in Cicero's day) juxtaposed with both right and left-leaning columnists' views toward tax debate.
a brief video synopsis of the candidates' positions on taxes and a brief tutorial of the cost of capital.
Historical:
I. [An Author Recounts] Cicero On Governorship of a Province of Rome Near the Twilight of Empire
Cicero had found widespread anxiety about the future among all he met. No chief political players had shown their hands. Cicero's own view remained much as it had always been; he preached moderation, compromise and reconciliation.
[The former governor's] policy had simply been to enrich himself. Cicero was shocked when he saw the consequences. Writing while on the road, he described a 'forlorn and, without exaggeration, permanently ruined province.' Local communities had been forced to sell prospective tax revenues to tax farmers in order to meet [the former governor's] rapacity for cash. 'In a phrase, these people are absolutely tired of their lives.'
- Cicero: The Life and Times of Rome's Greatest Politician, by Anthony Everitt
Right:
II. a) Corporate Tax Bills Are Footed By the General Public
Corporations cannot possibly pay the corporate income tax because they are not human beings. Instead, that tax always is fully passed to one or all of three groups of human beings: to customers through higher prices, to shareholders through lower returns on capital, or to employees through lower take-home pay. Under fierce global competition, the potential of shifting corporate taxes to customers often is limited. Similarly, in a global capital market, the corporate tax cannot easily be shifted to capital owners who have the option of taking their capital elsewhere. Economists therefore suspect that the bulk of the corporate income tax is shifted back to the least global mobile target, the employees.
Appearances to the contrary, cuts in the individual income tax help corporate executives more than cuts in the corporate tax because income tax reductions accrue to themselves, whereas corporate tax cuts accrue to other people (e.g., employees and investors - which may or may not be one in the same).
- notes paraphrased from: Uwe Reinhardt, Political Economy Professor, Princeton University
II. b) Cost of Capital -
The Bush tax program, particularly the 2003 Tax Act, boosted productivity by encouraging the investment to make a larger capital stock possible. That investment is what finally kicked the recovery into a higher gear.
For a capital asset to be worth creating and employing, it must be projected to earn enough to recover its cost before it becomes unproductive (depreciation), pay taxes imposed on its revenues, and leave about a 3% risk-adjusted real (after inflation) rate of return to its owners. That combined [net] rate of return is the the service price of capital, or the4 hurdle rate. The lower the service price, the higher the sustainable capital stock, the average wage and the level of GDP. The 2003 Bush ;tax cut knocked the service price down by nearly 10%.
How? The 15% cap of tax rates on dividends and capital gains was a very large reduction in the double taxation of corporate income. It was equivalent to a big cut int the corporate tax rate and the biggest boost to investment of the Bush tax packages. Lowering the marginal income tax rates in the top four tax brackets cut the service price for noncorporate businesses and rewarded work and risk-taking.
Nevertheless, the investment surge from the Bush tax cuts will taper off as the added capital made possible by the lower service price is finally acquired, by about 2008-2013. Historically, it has taken about five years for the quantity of equipment to adapt to major tax changes, and about 10 years for structures. Growth should then revert to a more normal pace, but from a higher base.
Keeping growth near the 3.2% rate of the last three years would require more reductions in the service price of capital. We need more than an extension of the Bush tax cuts: deeper cuts in the tax rate on dividends and capital gains, cutting the corporate tax rate and marginal tax rates on noncorporate businesses, and letting businesses write of their investment spending faster.
If, instead, the Bush tax cuts expire as scheduled at the end of 2010, much of the newly acquired capital made possible by the tax cuts would no longer be sustainable. We would see businesses disinvest - investment would slump to allow the capital stock to shrink back to the old-law levels through attrition. That would flirt with recession.
Killing the 15% tax rate caps on capital gains and dividends, the marginal rate cuts, the bracket widening for joint returns (marriage penalty relief), and the partial estate tax relief currently in place, would jump the service price of capital by more than 10% (to 22.5% from about 20.3% currently), according to the Heritage [Foundation] service price calculator.
A 10% jump in the service price is a big deal. A lot of capital would be unable to earn enough to pay the higgher tax; I estimate that the stock of buisiness plant, equipment, and inventories would ultimately be about 16% less compared to what it would be under current tax rates. Hours worked would fall 2%. Private-sector output and wage and capital income would drop 7%. That would mean an eventual 5%-6% reduction in GDP.
The present Congress thinks it can raise $200 billion a year (at 2006 income levels) by letting the growth provisions of the present tax system die, but with no damage to GDP. Wishful thinking.
The tax calculator shows that a 7% reduction in private-sector income would depress federal individual income-tax revenues by $140 billion (more than a 7% drop because lower incomes drop people into lower tax rate brackets). That's not all.
I estimate that payroll taxes, federal corporate income taxes, customs and excise taxes, and the estate tax would drop $85 billion. Result: a net loss of $25 billion. State and local governments also would take a revenue hit, and likely raise taxes, further depressing GDP. Worse, this would all cost workers and savers roughly $700 billion to $800 billion in lost output and income.
Those would be the permanent effects. The transition is even dicier. Reverting to a lower capital stock would mean slashing business fixed assets and inventories by $2.5 trillion over 10 years. It would require cutting investment spending by 18%, or 1.9% of GDP (more in the first five years, less later). The investment slump would reduce a 2.5% annual expansion to a crawl. If disinvestment spread to the homebuilding sector, it could mean recession.
Alarmist? Consider precedent. Lyndon Johnson pushed a 10% war surtax on income through Congress in April 1968. It was the primary trigger for the 1969-1970 recession. Congress rushed to end it early in 1970. Investment spending crashed by 7%, and rebounded after the surtax was history. That surcharge had a fraction of the impact on the service price of capital that would occur if the Bush tax cuts expire.
Consider Japan as well. In 1988-1990, the Miyazawa tax program aped and outdid the worst anti-capital elements of the U.S. Tax Reform Act of 1986. Japan instituted a capital-gains tax where there had beeen none, and ended near universal tax-favored saving incentives for everyone below retirement age. It raised land taxes twice. These hits to capital crashed stock and land prices, made banks insolvent, and crushed investment. It took Japan 15 years to recover.
If Congress goes down this road, expect a similar outcome. When Congressmen do not study history, the rest of us are condemned to repeat it.
We should rather be thinking of more rate cuts. Growth will slow even if the Bush cuts are simply extended, but we would keep the increase in the base level of GDP they made possible. Letting the cuts expire would undo a fair bit of the capital formation since 2003, forestall gainst yet to come, and shunt GDP to a lower baseline. Hiking other taxes would only make matters worse.
- Stephen Entin is President and Executive Director of the Institute for Research on the Economics of Taxation
Left:
III. McCain Lies His Head Off; NY Times Asleep at Switch
IV. Conclusion:
The analysis by the big government, tax-and-spend left ignores the cumulative effects of stimuli in the form of lower taxes, which reduce costs of capital and spur investment, leading to a virtuous cycle of increased: jobs, income, consumption, and investment. Welfare statists impute that simply increasing taxes leads to overall general welfare in that more income for the government can create jobs via bureaucracy etc. However, bureaucracy is not business and business requires truck, barter and trade - all individual activities performed by human beings who need incentive to get off their [fill-in-the-blanks] and work.
In short, a policy (and propaganda supporting it) which simply increases the tax rate and acts like a cache pulling in a greater percentage of wealth forthcoming (spurred by previously pro-business tax cuts) is an intellectually dishonest productivity freeride and a stalking horse for bureaucratic extortion.
Liberals decry lower taxes citing politics of envy while these self-same tax cuts are most beneficial to those with limited incomes - namely, middle and working class families. This message will attempt to put modern debate in an historical context by citing the ancient Roman regime (in Cicero's day) juxtaposed with both right and left-leaning columnists' views toward tax debate.
a brief video synopsis of the candidates' positions on taxes and a brief tutorial of the cost of capital.
Historical:
I. [An Author Recounts] Cicero On Governorship of a Province of Rome Near the Twilight of Empire
Cicero had found widespread anxiety about the future among all he met. No chief political players had shown their hands. Cicero's own view remained much as it had always been; he preached moderation, compromise and reconciliation.
[The former governor's] policy had simply been to enrich himself. Cicero was shocked when he saw the consequences. Writing while on the road, he described a 'forlorn and, without exaggeration, permanently ruined province.' Local communities had been forced to sell prospective tax revenues to tax farmers in order to meet [the former governor's] rapacity for cash. 'In a phrase, these people are absolutely tired of their lives.'
- Cicero: The Life and Times of Rome's Greatest Politician, by Anthony Everitt
Right:
II. a) Corporate Tax Bills Are Footed By the General Public
Corporations cannot possibly pay the corporate income tax because they are not human beings. Instead, that tax always is fully passed to one or all of three groups of human beings: to customers through higher prices, to shareholders through lower returns on capital, or to employees through lower take-home pay. Under fierce global competition, the potential of shifting corporate taxes to customers often is limited. Similarly, in a global capital market, the corporate tax cannot easily be shifted to capital owners who have the option of taking their capital elsewhere. Economists therefore suspect that the bulk of the corporate income tax is shifted back to the least global mobile target, the employees.
Appearances to the contrary, cuts in the individual income tax help corporate executives more than cuts in the corporate tax because income tax reductions accrue to themselves, whereas corporate tax cuts accrue to other people (e.g., employees and investors - which may or may not be one in the same).
- notes paraphrased from: Uwe Reinhardt, Political Economy Professor, Princeton University
II. b) Cost of Capital -
The Bush tax program, particularly the 2003 Tax Act, boosted productivity by encouraging the investment to make a larger capital stock possible. That investment is what finally kicked the recovery into a higher gear.
For a capital asset to be worth creating and employing, it must be projected to earn enough to recover its cost before it becomes unproductive (depreciation), pay taxes imposed on its revenues, and leave about a 3% risk-adjusted real (after inflation) rate of return to its owners. That combined [net] rate of return is the the service price of capital, or the4 hurdle rate. The lower the service price, the higher the sustainable capital stock, the average wage and the level of GDP. The 2003 Bush ;tax cut knocked the service price down by nearly 10%.
How? The 15% cap of tax rates on dividends and capital gains was a very large reduction in the double taxation of corporate income. It was equivalent to a big cut int the corporate tax rate and the biggest boost to investment of the Bush tax packages. Lowering the marginal income tax rates in the top four tax brackets cut the service price for noncorporate businesses and rewarded work and risk-taking.
Nevertheless, the investment surge from the Bush tax cuts will taper off as the added capital made possible by the lower service price is finally acquired, by about 2008-2013. Historically, it has taken about five years for the quantity of equipment to adapt to major tax changes, and about 10 years for structures. Growth should then revert to a more normal pace, but from a higher base.
Keeping growth near the 3.2% rate of the last three years would require more reductions in the service price of capital. We need more than an extension of the Bush tax cuts: deeper cuts in the tax rate on dividends and capital gains, cutting the corporate tax rate and marginal tax rates on noncorporate businesses, and letting businesses write of their investment spending faster.
If, instead, the Bush tax cuts expire as scheduled at the end of 2010, much of the newly acquired capital made possible by the tax cuts would no longer be sustainable. We would see businesses disinvest - investment would slump to allow the capital stock to shrink back to the old-law levels through attrition. That would flirt with recession.
Killing the 15% tax rate caps on capital gains and dividends, the marginal rate cuts, the bracket widening for joint returns (marriage penalty relief), and the partial estate tax relief currently in place, would jump the service price of capital by more than 10% (to 22.5% from about 20.3% currently), according to the Heritage [Foundation] service price calculator.
A 10% jump in the service price is a big deal. A lot of capital would be unable to earn enough to pay the higgher tax; I estimate that the stock of buisiness plant, equipment, and inventories would ultimately be about 16% less compared to what it would be under current tax rates. Hours worked would fall 2%. Private-sector output and wage and capital income would drop 7%. That would mean an eventual 5%-6% reduction in GDP.
The present Congress thinks it can raise $200 billion a year (at 2006 income levels) by letting the growth provisions of the present tax system die, but with no damage to GDP. Wishful thinking.
The tax calculator shows that a 7% reduction in private-sector income would depress federal individual income-tax revenues by $140 billion (more than a 7% drop because lower incomes drop people into lower tax rate brackets). That's not all.
I estimate that payroll taxes, federal corporate income taxes, customs and excise taxes, and the estate tax would drop $85 billion. Result: a net loss of $25 billion. State and local governments also would take a revenue hit, and likely raise taxes, further depressing GDP. Worse, this would all cost workers and savers roughly $700 billion to $800 billion in lost output and income.
Those would be the permanent effects. The transition is even dicier. Reverting to a lower capital stock would mean slashing business fixed assets and inventories by $2.5 trillion over 10 years. It would require cutting investment spending by 18%, or 1.9% of GDP (more in the first five years, less later). The investment slump would reduce a 2.5% annual expansion to a crawl. If disinvestment spread to the homebuilding sector, it could mean recession.
Alarmist? Consider precedent. Lyndon Johnson pushed a 10% war surtax on income through Congress in April 1968. It was the primary trigger for the 1969-1970 recession. Congress rushed to end it early in 1970. Investment spending crashed by 7%, and rebounded after the surtax was history. That surcharge had a fraction of the impact on the service price of capital that would occur if the Bush tax cuts expire.
Consider Japan as well. In 1988-1990, the Miyazawa tax program aped and outdid the worst anti-capital elements of the U.S. Tax Reform Act of 1986. Japan instituted a capital-gains tax where there had beeen none, and ended near universal tax-favored saving incentives for everyone below retirement age. It raised land taxes twice. These hits to capital crashed stock and land prices, made banks insolvent, and crushed investment. It took Japan 15 years to recover.
If Congress goes down this road, expect a similar outcome. When Congressmen do not study history, the rest of us are condemned to repeat it.
We should rather be thinking of more rate cuts. Growth will slow even if the Bush cuts are simply extended, but we would keep the increase in the base level of GDP they made possible. Letting the cuts expire would undo a fair bit of the capital formation since 2003, forestall gainst yet to come, and shunt GDP to a lower baseline. Hiking other taxes would only make matters worse.
- Stephen Entin is President and Executive Director of the Institute for Research on the Economics of Taxation
Left:
III. McCain Lies His Head Off; NY Times Asleep at Switch
One of the most common-supply-side talking points is that tax cuts always lead to higher tax revenues. It's not really true (revenues crashed after the 2001 Bush tax cuts) but even if it were, it's misleading: Tax revenues tend to rise over time as a natural result of inflation, rising population, and economic growth. Taken at its face value, the supply-side logic would imply that tax hikes always cause revenue to fall, which is ridiculous on its face, and which explains why supply-siders never mention this silly corrollary to their claim.
Until now! John McCain is a recent convert to supply-side economics and still working on getting the talking points down. Speaking yesterday in South Carolina , the straight talker:
proclaimed himself a believer in the notion that cutting taxes increases revenue for the government by spurring economic growth. "Don't listen to this siren song about cutting taxes," Mr. McCain told supporters gathered here under a tent in a driving rain. "Every time in history we have raised taxes it has cut revenues."
What? Every time? Okay, how about we go back and look at the last time taxes were raised -- 1993. It's true that conservatives predicted revenue would fall as a result of the tax hike. (Typical quote: "Higher taxes will shrink the tax base and reduce tax revenues" -- Newt Gingrich.) But it didn't exactly work out that way:
The amazing thing is that New York Times, which printed McCain's quote, made no effort whatsoever to ascertain the truth of his point. Just the typical, "McCain says earth is flat, and meanwhile in other news..." stuff. I realize that campaign reporting is hard, and reporters don't usually have time to check on the truth of candidate's statements. (And yes, this is a huge flaw with reporting, but that's another story.) But this claim is so obviously false it could have been refuted after maybe thirty seconds of research. Didn't the author (Michael Cooper) realize that tax hikes don't always, or even usually, lead to reduced revenue? Does he remember the 1990s? Is he aware that the federal government raised taxes and started collecting dramatically higher revenues during World War II? (Taxes were raised and revenues quintipled.)
The expecially annoying thing is that when Mitt Romney promised he could rebuild Detroit's auto industry, the media hammered him as a liar -- and it wasn't even a lie, just a matter of opinion, albeit a highly optimistic promise. Meanwhile, McCain disagreed and was treated to another worshipful round of press coverage. (The Washington Post credited him with telling "hard truths," which, again, takes McCain's side on an issue that's a question of opinion rather than fact.)
As my book explains, political coverage almost never bothers to check on the truth of candidate's claims about public policy. So, okay. But can they at least stop praising McCain as a brave truth-teller when he's totally reversed his position on the Bush tax cuts and now defends them with obvious lies?
--Jonathan Chait
IV. Conclusion:
The analysis by the big government, tax-and-spend left ignores the cumulative effects of stimuli in the form of lower taxes, which reduce costs of capital and spur investment, leading to a virtuous cycle of increased: jobs, income, consumption, and investment. Welfare statists impute that simply increasing taxes leads to overall general welfare in that more income for the government can create jobs via bureaucracy etc. However, bureaucracy is not business and business requires truck, barter and trade - all individual activities performed by human beings who need incentive to get off their [fill-in-the-blanks] and work.
In short, a policy (and propaganda supporting it) which simply increases the tax rate and acts like a cache pulling in a greater percentage of wealth forthcoming (spurred by previously pro-business tax cuts) is an intellectually dishonest productivity freeride and a stalking horse for bureaucratic extortion.
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