In the early days of the great depression the genious's in the White House and Congress decided we need to raise taxes and increase tariffs on imports. The result of this policy was the worst economic disaster in American history. Now today the demos in congress are talking about taxing everything they can think of from raising the gas tax to winfall profits taxes on oil companies to this stupid idea.
Quote:
Conservative "Blue Dog" Democrats blocked a vote last week over Democratic leaders' attempts to add an additional $51.8 billion over the next decade for veterans education to the $183.8 billion war funding tab. They insisted on finding a way to pay for the new benefit without simply adding to the deficit.
"What we're talking about is a one-half percent income tax surcharge on incomes above $1 million," said Rep. Mike Ross, D-Ark., a leader of the Blue Dog group. "So someone who earns $2 million a year would pay $5,000. ... They're not going to miss it."
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Now giving the Vets more educational benefits is a great thing but raising taxes is not a good idea, and this 1/2 of one percent will not yield the $52 billion they think it will. Rich people don't like to pay taxes even if they don't need the money. So they'll figure out a way to avoid it.
Today we have a recession. Many people knowing that I am an authority on history and Economics ask me what is the difference between a depression an a recession? An old joke goes like this, "IF your neighbor loses his job it's a recession, if you lose your job, it's a depression." Some people think that a depression is a really bad recession, you here this in the media a lot. There is actually no difference.
Originally an economic slow down was called a "Panic" and an expansion was called a boom. After a couple of bad panics the government changed the terminology to Depression so that people wouldn't freak out at the sound of the word. After the Great Depression of the 1930's Economists began using the term "Recession" for the same reason. If a govenment Economist had used the word "Depression" to describe a slow down after what people had live through in the 30's you'd surely have a panic.
What's my point in this. We do have a recession starting right now. The fed has been cutting interest rates and inflating the money supply, thus causing the US Dollar to fall against other currencies and the most important currency of all OIL. The weak Dollar is driving the oil price to it's new highs. This is acting like a tax increase on the drivers of cars and trucks, as well as causing inflation in the price of everything due to higher transportation costs. With this "Currency" situation causing the Gas prices to soar, the money coming out of pockets of consumers to buy their gasoline will surely cause a reduction in spending in other areas.
This is it kiddies we are headed to a serious recession unless something is done to avoid it. Bush can't do anything being a lame duck with a hostile congress, who has done nothing in the last 2 yrs. The "stimulas" deal will help some but will not address the root cause of this recession. It's not the war, it's the Dollar losing value. Everything is going up in price because of the weak Dollar. Oil is the worst part of this because it is essential to everyday life for most people.
What can be done. Stop cutting interest rates. In fact the Fed should raise the Discount rate and the Fed funds rate gradually over the next six months. Sending a signal to the world that we are boosting the dollar. We should take immediate action to cut Oil consumption.
A 55 mph national highway speed limit strictly inforced would shave about 10% off the daily gas and diesel used in the USA. The shift in the demand would cause oil prices to drop and singnal that we are serious about getting our energy act together. In additon to this we should begin making gas out of coal. We have a 200 yr supply of coal in this country and it time to start using it. Also there is currently 50 times as much Natual gas in the USA as there is Oil, we could begin converting cars to run on compressed natual gas(cng) a clean burning fuel that is comparable to gasoline in energy content. We would also need to put in CNG stations in major cities.
Commentary on the Demos Proposed tax hike.
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