Day: July 29, 2009

Tax Cuts?——Yet Again?

This is a Daily Agitation:

TAX CUTS?  Tax Cuts?  What the hell are they thinking?  The Repubs, that is.  They just cannot move past a tired old cry from the past.  I see that the Repub talking heads are at it again….that the US needs tax cuts to bring the economy out of its free fall.  Why?  Because France, Germany and Hungary are considering it.  What is the old saying about if others are doing it…….?

I guess I need to cover this territory yet again…..The government depends on its revenue to carry on business…its revenue is Corporate tax, Income tax, payroll tax, and excise tax along with a very few other sources.  By cutting taxes you would be limiting the amount odf income that the country brings in.  So if you cut corporate tax there wilkl be a shift to make up that difference from another source….another tax…..

France, Germany and Hungary are trying to lower taxes not because it will help the economy, but rather it will help a leader whose popularity is sinking.  It will be for political advantage, not a way to save the economy or the people of their countries.

All along the Repubs have said that the country should be run like the budget of a family…if that is so what happens to a family that loses income?  At this juncture in time, the US needs all the income it can muster…there are too many irtons in the economic fire to lose any revenue.  It is possible that in 5 years or so, depending on the economy, a tax cut could be a good idea, but that time is NOT now.

Today there are millions unemployed, that alo9ne puts a sizeable bit into the amount of income generated from payroll taxes.  Also revenue generated off of consumption is lagging.  Why would anyone consider cutting the limited amount of revenue that the government would have to work with?  When revenue is at a low end, it is not the time to lose more of it to some unrealistic BS like tax cuts.

The sad part is that Americans are starting to buy into the fantasy of tax cuts.  They do not see it for what it is…….. political posturing, misinformation and out right lies.

Comedian Ron White says it all, “you cannot fix stupid”!

More Bad News For Taxpayers

The markets are up, slightly….and the investors are happy…..if investors are happy then the markets remain happy and rising…but all that good news is overshadowed, at least in my opinion, but a few things happening behind the scenes…it will effect the taxpayer and not in a good way.

First good ol’ Ben of the Fed is saying, according to Wall Street Journal:

Bernanke acknowledged that “financial conditions remain stressed, and many households and businesses are finding credit difficult to obtain.” In response to a question about the prospects for a jobs recovery, he said, “We have a very long haul here. Unemployment is going to stay high for quite a while, and so it’s not going to feel really like a strong economy.”

However, he called a second economic stimulus package “premature” and proposed no measures either to provide immediate relief for the millions hit by plant closures, layoffs, and the collapse of home values and savings, or to allocate government funds to create new jobs. Nor did he propose any measures to compel the banks, which have received more than $200 billion in taxpayer cash and trillions more in low-interest loans, subsidies and government backing for their debt, to increase their lending and make credit available to working families.

At the same time, Bernanke made clear that the Fed would continue to allocate whatever funds were needed to prop up the banks. In response to the plea from Senate Banking Committee Chairman Christopher Dodd, Democrat from Connecticut, Bernanke said he was prepared to extend one bailout program, the Term Asset-Backed Securities Loan Facility (TALF), beyond its December 31 expiration date.

Okay, the possibility of more taxpayer money being thrown at the markets, the banks and the wealthy is there….what exactly ius the government doing for the taxpayer?  The answer is simple…they are doing the same thing that Repubs do for the working class….as little as possible and still keep some support for the next election.

There is more for the workers to consider….do you recall the name John Yoo?  Well, he is up to his butt in legal probs brought on while he served in the Bush Admin.

By pulling out of Yoo’s defense, the Justice Department has now spared itself from having to defend Yoo’s expansive and much-criticized views of executive power, which would have been an embarrassment to the Obama administration.  And as Carrie Johnson of The Washington Post notes, it also frees Yoo to point the finger at other former government officials he might say were giving him orders — notably Vice President Dick Cheney, President George W. Bush, adviser David Addington and then-White House counsel Alberto R. Gonzales. That would be a sticky, if not impossible, argument for government lawyers to have made.

Yoo hasn’t completely lost his government support, though. His choice of private counsel, who’s defended Yoo in such sticky controversies before, is Miguel Estrada, a former Bush nominee for the U.S. Court of Appeals for the D.C. Circuit whose appointment was quashed in 2003 by Senate Democrats — a point harped on by Republicans during the recent confirmation hearing of Supreme Court nominee Sonia Sotomayor. Estrada’s fees will be paid by U.S. taxpayers.

WE, as taxpayers are on the hook for all the monetary antics of the governement, I say let the fool pay his own legal fees……which he would not have accured if he had done nothing illegal.  Just a thought.

What Are The Chances That There Is More Bailouts?

We taxpayers have bailed out just about everybody….banks, insurance, Wall Street and auto makers and let us not forgot those darn pesky mortgage crooks.  But what is then left that could be in dire straights and need our help….by our I mean the taxpayer, since apparently we have unending funds?

A recent commentary in the Houston Chronicle written by Loren Steffy sates:

The second quarter is supposed to be the highlight of the airlines’ year, the period when planes are stuffed with leisure travelers and travel demand is at its peak. This year, though, the recession, the swine flu scare and rising fuel prices have hammered results.

Houston-based Continental Airlines, for example, posted a $213 million loss last week as revenue plunged 23 percent. The airline also said it planned to shed 1,700 jobs.

Where will the additional capital come from? Bond investors are showing little interest in pouring more money into the carriers. Rates for credit-default swaps — which shield investors from losses if the airlines are unable to repay their debt — have been rising steadily for the parent companies of American and United, Bloomberg News reported. Rising swap rates are a sign that bond investors are increasingly wary the two carriers will default.

Last week, Moody’s Investors Service cut the debt ratings for industry stalwart Southwest Airlines to the lowest grade above junk. Meanwhile, Standard & Poor’s placed the ratings for American and United, which already are below the junk threshold, on its watch list with negative implications, citing concerns about liquidity and declining revenue.

So if the courts can’t help, might we actually see one or two of these perpetually troubled airlines go out of business?

Don’t count on it. It’s unlikely that lawmakers and the administration, facing stubborn unemployment numbers, are going to allow tens of thousands of airline workers — many of whom are unionized — to lose their jobs. Expect, at the least, government-backed loan guarantees to help carriers shore up their balance sheets with fresh capital.

If Washington really wanted to help, it would do nothing. It would turn a deaf ear to the pleas of the beleaguered carriers, allowing the chance that maybe, just maybe, one or two of them will actually stop flying and enable the surviving airlines a shot at sustained profitability when the recession’s over.

So, will the taxpayer be tapped again?  Probably not……there is a bailout fatigue setting in on Main Street….that could have been a different story if only Main Street could have been the main concern and not the creeps on Wall Street……but as they say “hindsight is 20/20”.  It is a shame that the government cannot or will not see the errors of their ways.