Sidney^®

It’s becoming one of the most clichéd phrases in American politics. Everyone’s saying it. Just the other day, Michael Bloomberg, the Mayor of New York City, agreed with it. And, it’s pretty hard not to agree with him. The rich must pay their fair share of taxes. But, what does that actually mean? No one really says. It’s pretty much whatever politicians want it to mean at a given time. That works for them, of course. They never want to be pinned down on anything. But, what about for the rest of us?

Not so much. The politicized notion of the rich paying their fair share is bogus times three and hurts everyone. The first part of the fakery is the illusion that the rich are our social welfare safety net. We don’t have to cut spending, we just have to cut deeper into their bank accounts. So, for example, Obama’s debt reduction plan pins 25% of the projected decrease on grabbing more from households with incomes exceeding $250,000 annually.

Sound great? Not if you think beyond the emotional “us-against-them” appeal inherent in the fair share con. The amount of Obama’s latest proposed tax increase won’t put a pea-sized dent in the debt. In fact, we can take all of their money and still not satisfy the enormous entitlement appetite our politicians have been whetting for decades. The fair share sales job has put us where we are today, in the debt throes of a fiscal disaster. And still, politicians play that card.

Even worse is the fact that taking more from the taxpayers Obama has targeted stunts economic growth. They are the builders of a robust economy. Their businesses create jobs. Their spending expands economic opportunity for all of us. It’s an elementary school lesson that many of us have forgotten over the years. Using these folks as our revenue punching bag won’t be cutting off our noses to spite our faces. It will be shooting ourselves in the head.

The next ingredient of the fair share hustle is that the taxman’s super-sized ammo will never hit us, the non-rich. But, of course, we’re wrong about that, too. Even now a bigger gun is turning in our direction. After all, those making more than $250,000 aren’t really rich. No question, they’re well off. But, statistically, they’re no closer to Warren Buffet’s $50 billion net worth than the 47% of Americans who pay no federal income tax at all. Unless we make Ryan-deep cuts in our spending, we’ll all be hit with much bigger tax bullets. The arithmetic doesn’t add up any other way.

The final piece of the fair share shakedown is the way in which “fair” is calculated. For example, Obama’s determination of which taxpayers to hit with hikes is not based on an objective assessment the value of the benefits they receive. It’s a function of the amount he needs to keep his spending agenda on track and the size of the increase he can sell.  It’s a purely political reckoning, an end run across the expediency goal line. That’s very scary because it’s a subjective technique that can be used to justify any action against any group.

If we use a cost-benefits approach to determine fairness, taxes would be lowered for the rich and raised for everyone else. That is, we’d end up with a flat tax because the rich don’t benefit anymore than we do from government services. In fact, they benefit less. We all share equally from national defense, public safety, infrastructure and education expenditures. But, the rich miss out on most of the government’s largesse.

Obama does offer a fairness argument of sorts. The rich owe more to repay all this country has given them, as if it made the money and throw it on their doorsteps. The biggest thing the country really did was create opportunity and get out of the way.  That’d be nice for the rest of us, too.

See you on the left-side.

We’ve got debt problems coming out of our ears. Everyone knows it and most of us have our own ideas about how to deal with it. Even politicians are finally, albeit very reluctantly, making noise about the yawning ugliness of our massive federal money pit. But, that’s only because they can no longer run away from it. Everyone also knows there’s very little agreement across the political spectrum on what to do about it. Tax and keep spending or cut, cut, cut. Whatever shall we do?

I have a great idea; fair to all, guaranteed to solve our money problems and very simple. But, before we get to what the solution is, let’s review why we need it. Knowing why something needs to be done makes the choice a lot clearer. The first part of the why is to end the “raise taxes vs. cut spending” war of words. And they are just meaningless words since it goes without saying that spending must be cut. A tax raising solution is stupid because, eventually, we’ll run out of money. Of course, running out of money solves the spending problem, too. Raise your hand if you think that’s a good idea.

How much money do we have to cut? That’s answered by the size of the debt. Today, it’s over $14 trillion. By 2020, it will be over $21 trillion as spending continues to increase. To put that into perspective, the projected 2011 tax revenue for the Feds is about $2.57 trillion. That means the current debt is more than five times this year’s revenue. By 2020, it will be eight times greater. In that year, just the interest on the debt will burn through annual Federal revenue and a lot more. How does paying interest on the interest sit with you?

To figure out how much spending we have to cut, let’s look at it like a grade school arithmetic problem. If a speeding debt is racing towards you at 21 trillion miles per hour and your back’s to the wall, when will it flatten you? Never, if you blow it up first. Where do we put the debt-busting fuse? Under the biggest piece of the spending pie, of course. The rest of it is peanuts by comparison so cutting in those places, while helpful, doesn’t get the job anywhere near done.

The biggest piece of the pie is the collection of sections known, inappropriately, as “entitlements”. As if anyone has the right to use Uncle Sam’s long arm to lift your wallet. We really do need to put our brains back in gear, people. “Entitlements” is just a successful marketing term. It gets us to buy into paying more than our their fair share for the upkeep of people who pay nothing at all. Like, say, a family of four making $50,000 annually.

But, how are we going to cut welfare payments when politicians have been increasing them for decades to get elected? Look at Obama’s irresponsible budget proposal. Or at the teeth gnashing going on now about cutting spending over the next ten years by less than this year’s deficit. Remember a couple of years ago when the media was taunting us about being addicted to welfare? According to those guys, we will never reduce payments once we have them. They’re going to have to be very wrong about that.

So, here’s the solution. It stops campaigning for votes in exchange for greater welfare largesse and it keeps people who don’t pay into the system from controlling your wallet. If you don’t pay federal taxes, you don’t vote in federal elections. By “pay taxes”, I don’t mean the more than fifty million American households that file returns but, thanks to tax credits, pay zero dollars. I mean people who have less money than they otherwise would have because the taxman actually takes it away.

Fair’s fair. No skin in the game? You don’t get to be a signal caller. It will take a constitutional amendment, of course, but, with almost half of American households paying no taxes, there’s no time like the present. We’ll see how long the debt lasts when people who pay have the say.

See you on the left-side.

As President, Barak Obama has consistently pushed U.S. foreign policy in one direction, straight into a kumbaya coalition of countries. To him, we are no longer the dominant player on the world stage. Instead, our nation is merely one of many. This shift in policy from past Presidents fits nicely into Obama’s community organizer world view. We can finally all come together to explore our common issues, rise above our differences and live happily together. It works because our fates are neatly intertwined, or so he says.

Whether Obama’s view is realistic or not, it’s real enough to him. He even goes so far as to chide and lecture those who disagree. Who can forget his apology to the world for the Bush years of so-called arrogance and dismissiveness to our allies?

So, no more one deciding for the many. That’s wrong, unless, of course, the one is Obama himself. Turns out, he can decide for everyone without the need to persuade or even disclose, which, given his past pronouncements, is truly shocking.

In 2007, Senator Obama claimed that the President can unilaterally authorize military action only to stop an actual or imminent threat to the nation. In the same year, Presidential Candidate Obama said the American Public has the right to participate in deciding whether the country uses military force.

But, in 2011, President Obama didn’t even consult the U.S. Congress before he bombarded Libya. Wow. He must have thought Gaddafi’s air force was an imminent threat to our nation. Of course, he did consult the UN and the Arab League prior to administering the Libyan smackdown. But, they’re not part of the American Public that has a say in whether we go to war, right?

Or, it could be that Obama simply changed the constitutional standard for Presidents pushing the bomb button all by themselves. According to his press secretary, Obama can use military might, strictly on his own initiative, whenever lives need saving. Of course, the Congress just gets in the way when lives are at stake so it’s o.k. to bypass them.

That’s quite a departure from the actual-or-imminent-threat-to-our-nation principle preached by Senator Obama when Bush was Commander in Chief. So, perhaps the constitution doesn’t have anything to do with Obama’s actions. Maybe, he says whatever he has to and does whatever he wants. Shocking.

Last May in his commencement address at West Point, Obama stated that the U.S. can no longer act alone in the world. But, it’s o.k. for him to act alone with the world while completely ignoring his country. We finally understand what kumbaya really means. Awe, shucks.

See you on the left-side.

With all the absurd verbiage flying around from union leaders and politicos lately, you’d think the sky has fallen. Take the emotion-charged responses of the unions over last week’s passage of the Wisconsin bill restricting collective bargaining rights.  It “jeopardizes fundamental American values”, is “an abuse of power”, a “slap in the face to the middle class” and a pretense to “fix a phony budget crisis”. Phony? Really? These people probably started the rumor that the moon landing took place in a TV studio.

The orchestrated union hysteria aside, what is the real issue in the high-profile debate over busting public unions? Make no mistake, many want the public unions put out of our collective misery. There’s not a fiscally troubled state in the Country that can pay off its unfunded public liabilities. Unless, of course, they impose devastating tax increases and/or take a serious axe to services. The wolf has finally blown the door down and stands drooling over every morsel we’ve got.

So, it seems that the pubic union debate must be focused on the economic value of government workers. There’s no other rational way to assess their spiraling cost to taxpayers. The growing wages. The sky-rocketing benefits. The expanding employment rolls. Someone, somewhere decided years ago that government workers have a great value to the Country. The debate today should be about whether that decision is justified.

Back in the day, before unionization hit government, public workers were paid less than their private sector counterparts. But, it was also difficult to fire them and job security was a pretty good tradeoff for a slightly smaller paycheck. Plus, the public guys had decent benefits and the shortest, fulltime workweek around. If you didn’t want to devote your life to your work, a government job was a good way to go. And, you still made a decent living for your family. I know because we have more than one proud former state employee under our roof.

But, in 1958, not that long ago really, public employees began bellying up to the union bar. Public unions were the brain child of a NYC politician who needed help at the polls. He started throwing power to public employees and they kept him in office. The model spread like political wildfire across the Country. In 1959, Wisconsin was the first state to allow public employees to unionize. The Feds soon followed suit. Today, three-quarters of our states have public unions within their borders. Occasionally, their members raise the solidarity fist with their unionized brethren in construction and manufacturing. But, they have as much in common with them as they would have with a union of silver spooners.

In a short fifty years, public unions have grown to include more than half of all unionized workers in the Country. In last November’s elections, they donated more than $200 million to favored candidates nationally. That’s some very serious political pull. No wonder they’ve skipped several chapters in How Things Really Work. They live in fairy tale land.

Here on Planet Earth, reward is based on the value of your work to those it benefits. Public employees work for, and owe their service to, the public. To taxpayers, not to politicians. It’s time they started acting like it. Instead of reaching even deeper into our pockets, they should start thinking about what public service means. Not sacrifice, but not blind selfishness, either. It’s time to return to the good old days when compensation was a measure of fairness and not political payback.

Some predict that the Wisconsin bill is merely the first anti-union domino to fall in a long line of them. It can’t happen soon enough.

See you on the left-side.

We are inundated on what seems like a daily basis with information and proposals on the illegal immigration problem. And it is huge a mess. Annually, illegal immigrants cost taxpayers over $100 billion with no end in site. While Congress kicks that one around like the political football it’s become, few are paying attention to the other immigration problem occurring within our borders. That one makes our territorial boundary woes look almost penny ante by comparison. While this other problem should, in theory, be easier to solve, we aren’t making any headway there, either.

Residents of states that have been particularly irresponsible with their money are migrating to states with sound fiscal policies. This internal migration to sunnier financial climes is creating an even bigger problem for us than the flow of illegals into our Country. Don’t get me wrong. The lid on the illegal immigration can of worms has to be snapped shut. But, the dilemma of internal immigration has a much greater negative potential: the economic decimation of large portions of our Country’s map.

Take the sovereign State of Illinois. Obama’s stomping grounds is in the worst financial shape of any of the red inked Federated Fifty. In January, the day before the new legislature was sworn in, the lame ducks passed a massive income tax increase. They raised the rate by two-thirds over the existing level. Rather than pare down spending, which has amassed a debt equal to half of the budget, lawmakers laid the burden of their irresponsibility on taxpayers. As one observer noted, the Illinois legislature has been a huge boon to Florida. The latest tax increase is expected to motivate a new wave of immigration to the southern State.

Sitting just a few rungs below Illinois in the list of states with the bleakest financial outlook is California. It’s the not so proud parent of a bouncing $25 billion deficit. In January, Governor Jerry Brown proposed a budget that would balance the State’s ledgers for the first time in a very long time. If Brown gets his way, the axe will cut deeply into several sacred cow services including welfare and education. Temporary tax hikes, enacted in 2009 and set to expire this year, would be extended for five years. But, the Governor’s proposal, due for a vote in the legislature later this month, is facing opposition from both sides of the aisle. Even if it passes, voters in a June special election must approve the tax hike extensions.

Rounding out the top ten of the most fiscally unfit are New York, Connecticut, New Jersey, Louisiana, Mississippi, Ohio, Massachusetts and Wisconsin.

Why are these states in financial trouble? To be sure, the recession is part of it. But, it only accelerated the inevitable financial meltdown of governments with a long history of spending like there’s no tomorrow. Not coincidentally, the ten worst favor public unions and large welfare programs. Even though their individual tax rates are among the highest in the country, they’re not high enough to finance the largesse flowing from public coffers. Making matters much worse, fiscal failure inevitably drives the tax base out, reducing the amount of revenue even high taxes generate. And it’s not just people who are splitting to friendlier confines. California, for example, has witnessed a long line of businesses bolting from the State like the Israelites fleeing Egypt.

Deficit spending is a sickness, an addiction its junkies cannot overcome. In the same bill that increased taxes in January, the Illinois legislature reduced spending not at all. Instead, it capped increases in future years at 2% per year. With their dying breath, and over voter objections, the lame ducks shot up one last time. How sick is that? We just can’t get rid of them fast enough.

I’m betting that the June election in California will validate Brown’s fiscal solution. Taxpayers can swallow a tax extension a lot easier than the bitter pill of state insolvency. Maybe the migration will stop for those willing to take the pain to restore the gain.

See you on the left side.

Barack Obama released his proposed 2012 budget on Monday. It was not the Valentine many were hoping to get. The budget’s spending figure of $3.73 trillion includes $1.1 trillion, or more than 29%, in deficit dollars. Apparently, the flowery promises of budget cutting our way to fiscal health have died on the President’s lips.

He did propose $1.1 trillion in total reductions over the next 10 years. But, that isn’t even peanuts. The combined deficits in just 2010, 2011 and 2012 add up to more than $4 trillion. The Congressional Budget Office projects the national debt will increase by almost $8 trillion between now and 2020. The interest on the debt during that period will consume Obama’s proposed cost savings. He’s some comedian.

Even funnier is the fact that Obama’s proposed 10-year reductions are all in the “discretionary” spending category. His knife does not touch “mandatory” dollars to Social Security, Medicare, Medicaid or even unspent 2009 Stimulus funds. Obamacare is no where near the cutting table. Asked why his proposal leaves the mandatory category in tact, the President replied that he’s insisting on co-operation from Republicans before he even begins. Translation: in the Obama White House, political gamesmanship has run leadership out of town. Or, he prefers playing the role of President as a comic.

The President’s standup routine is not funny any more, if it ever was. He needs a different shtick. It’s time for him to try being a leader for a change. On the deficit stage, he needs to propose meaningful cuts. Cull the sacred cow herd before we’re all trampled by it. It’s not like he has no idea what to do. He did appoint a Deficit Commission one year ago. Last December, it filed its report recommending $4 trillion in across the board cuts through 2020.

To be sure, there was a lot of gnashing of teeth over the prospect of wholesale spending reductions. But, a leader’s job is not to please. It’s to take the hard road and convince the led that we’re on the right path. When the Commission’s report was released, the White House promised to “harvest” alot of its ideas for the 2012 budget. Unfortunately, from the looks of Obama’s offering, there’s been a serious John Deere malfunction. Commission members would be hard pressed to find many of their recommendations in the President’s 2012 proposal. None of the mandatory cuts made it.

Maybe the problem is that, when the national debt reaches critical mass and we have a major meltdown in ten years, Obama won’t be around. We’re not like the Chinese who take the long view on problem solving. Our politicians focus on the near term, between today and the next election. With Presidential term limits and a cranky electorate, it’s safer to play hide the ball with Republicans. Let future politicians deal with future problems. Hilarious.

White House insiders say that Obama will sit down with both Republicans and Democrats to kick around “mandatory” spending cuts but only behind closed doors. It will be the Stimulus and Obamacare all over again only with GOP’ers included this time. To the politicians involved, meeting in secret is just fine. After all, candidates, not candidness, are for voters. So, we’ll just have to sit on the sidelines and see how the game unfolds.

Meanwhile, 2011′s deficit, predicted by the Administration to reach $1.65 trillion, is the largest in our history and the greatest percentage of GDP since WWII. Not very funny after all.

See you on the left side.