Tag Archives: Taxes

The Geography of a Recession

Watch this video which provides a time elapsed county by county update to the advancing unemployment. It is both unsettling and confirming. America is being fundamentally transformed right before our eyes.

or you can watch it here:

http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html

We are in trouble and the administration is not addressing the real issue – UNEMPLOYMENT! No more phony stimulus plans – we need tax cuts and the government to get out of the way.

In the week ending Dec. 12, the advance figure for seasonally adjusted initial claims was 480,000, an increase of 7,000 from the previous week’s revised figure of 473,000. Insured unemployment during the week ending Dec. 5 was 5,186,000, an increase of 5,000 from the preceding week’s revised level of 5,181,000.

Currently, there are 38,093,394 Americans on food stamps. With 15,407,486 Americans “officially unemployed” and 26,486,807 actually unemployed; stimulating job creation should be the primary focus of Congress. However, their role is only to create tax breaks that reward investment the markets will do the rest. The only reason business owners are not investing is because of the government’s over involvement in the market. The government has created fear with talk of Cap & Trade, Healthcare Reform and tax increases so everyone has taken a wait and see attitude.

Wake up America – we can not survive this level of unemployment for long. It will bring another collapse. A jobless recovery is not a recovery. We can not afford anymore wasteful spending or pork barrel politics.

Restore the Republic, Reject the Agenda of the Democrats!

Government Employees are Tax Delinquents!

The IRS says that unpaid taxes by federal employees has reached about $3.04 billion.

According to Internal Revenue Service data the U.S. Postal Service has more employees who are delinquent on their taxes any other federal agency. Their total is $297.93 million which is almost 10% of the total.

The Treasury which includes the IRS (and Tim Geithner) owes $6.99 million. At the IRS employees can be fired for failing to pay taxes. (I sense an opportunity.)

And then there is the Congress and the Executive Branch: $2.47 million for the U.S. Senate; $5.81 million for the House of Representatives; and about $813,000 for the Executive Office of the President.

Ironic isn’t it? This should be embarrassing since the federal government has record deficits and wants to raise the debt limit to $12 trillion so that it can continue spending at record levels next year. You would think that they would at least want to avoid this type of press since all government employees re paid with tax revenue. They do not create wealth – their jobs consume wealth.

“If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy.” – Thomas Jefferson

“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” — Thomas Jefferson

Economic and Employment Update – Losses Continue

Despite what the administration is saying, the economy is still very sick.

From http://www.economicindicators.gov/

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $351.4 billion, an increase of 2.7 percent (±0.5%) from the previous month, but 5.3 percent (±0.7%) below August 2008. Total sales for the June through August 2009 period were down 7.6 percent (±0.3%) from the same period a year ago. The June to July 2009 percent change was revised from -0.1 percent (±0.5%)* to -0.2 percent (±0.2%)*.

Retail trade sales were up 3.0 percent (±0.7%) from July 2009, but 6.0 percent (±0.7%) below last year. Gasoline stations sales were down 26.7 percent (±1.5%) from August 2008 and building material and garden equipment and supplies dealers were down 13.6 percent (±2.0%) from last year.

The up tick in consumer spending was artificially created by the Cash for Clunkers program. This may ultimately hurt the car companies by pulling forward sales that would have occurred naturally over several months. This created a short term but unsustainable spike which may be followed by a long sales slump. Note that this is a straight spending comparison and that prices are not considered, so if prices go up on essentials the increase in spending will follow out of necessity. Also note that while spending is up slightly it remains significantly down from last year.

From http://www.economicindicators.gov/

New orders for manufactured goods in July, up five of the last six months, increased $4.6 billion or 1.3 percent to $355.5 billion, the U.S. Census Bureau reported today. This followed a 0.9 percent June increase. Excluding transportation, new orders decreased 0.7 percent. Shipments, down eleven of the last twelve months, decreased $0.2 billion to $359.7 billion. This followed a 1.8 percent June increase. Unfilled orders, down ten consecutive months, decreased $0.1 billion to $740.6 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992. This followed a 0.8 percent June decrease. The unfilled orders-to-shipments ratio was 5.95, down from 6.00 in June. Inventories, down eleven consecutive months, decreased $3.6 billion or 0.7 percent to $503.1 billion. This was the longest streak of consecutive monthly decreases since March 2003-January 2004 and followed a 1.1 percent June decrease. The inventories-to-shipments ratio was 1.40, down from 1.41 in June.

Other areas of concern are the residential real estate market and what appears to be an attempt to re-inflate the housing market.

From The Center for American Progress (this source proves even the left is not buying the fairy tales)

http://www.americanprogress.org/pressroom/statements/2008/08/foreclosures.html

It’s 1930 all over again. While cheerleaders for the real estate industry proclaim the housing markets are ready to turn the corner, with first-time homebuyers ready to jump into the market, the reported 55 percent increase in foreclosure activity over last July should put a damper on the excitement. July marks the third month of accelerating increases in foreclosure activity reported by RealtyTrac and an unbroken streak going back to January 2006 of year-over-year increases in monthly foreclosures. With RealtyTrac reporting in excess of 750,000 bank-owned properties, we estimate that nearly 0.6 percent of all housing units in the United States are now bank-owned. While this may appear to be a small slice of the total housing stock, this is the same ratio of foreclosed properties to housing units in 1930. Foreclosures increased steadily from 1930 until peaking in 1933, at which point 10 percent of all homes had become bank-owned. They did not return to pre-Depression levels until 1938.

Now that Congress has passed and the president has signed housing legislation, there is a danger of complacency in thinking the problem has been addressed. The ball is in the loan servicers’ court to see if they will participate at meaningful rates in the new FHA loan program to refinance at-risk borrowers into sustainable loans. The Hope Now alliance of over 30 major loan services holding vast numbers of home mortgage loans reported modifying 220,000 loans during the second quarter of this year. To put that figure in context, RealtyTrac reported 272,121 foreclosure actions (notices of default, auctions, or repossessions) in July alone. If the mortgage industry doesn’t pick up the pace and more rapidly restructure or refinance existing mortgages headed for default and foreclosure, things will get worse before they get better.

Whether the situation is truly a harbinger of things becoming as dire as they did between 1930 and 1933 is something we will only know after the fact. But foreclosures are mounting, with 1 in 11 American families with a home loan in trouble as of June. If voluntary programs do not begin taking effective advantage of the tools offered by the recent housing bill, we would expect to see calls for still greater government action to avert a 1930s-like economic plunge.

The last line of this article is cause for concern , “we would expect to see calls for still greater government action to avert a 1930s-like economic plunge”.

Excerpts From The Associated Press

It could be another year before the final taxpayer tab for Fannie and Freddie is known, and that outcome will depend on when delinquencies and foreclosures finally crest.

The Obama administration doesn’t expect to announce its plans for the two companies until early next year, but powerful interest groups aren’t waiting until then. The Mortgage Bankers Association on Wednesday offered a detailed plan to replace Fannie and Freddie with several federally regulated private companies.

In the meantime, both Fannie and Freddie have been drafted to implement the Obama administration’s effort to reduce the number of foreclosures.

The early results have been disappointing. For example, while Fannie or Freddie refinanced 2.9 million loans from January through July, only about 60,000 were taking advantage of an Obama administration plan to help “underwater” borrowers who owe more than their homes are worth.

At the same time, nearly 70 percent of U.S. mortgages made in the first half of this year went through Fannie or Freddie, up from 62 percent last year, according to Inside Mortgage Finance, a trade publication.

See full article at:

http://www2.timesdispatch.com/rtd/business/local/article/B-MORT05_20090904-213604/290762/

Again the story is in the last paragraph, if “nearly 70 percent of U.S. mortgages made in the first half of this year went through Fannie or Freddie”, that means that the “government” is still guaranteeing these loans – which really means unfunded taxpayer liabilities continue to grow.

Jobs:

Excerpts From The Associated Press 

By CHRISTOPHER S. RUGABER 

WASHINGTON – September 18, 2009 — Forty-two states lost jobs last month, up from 29 in July, with the biggest net payroll cuts coming in Texas, Michigan, Georgia and Ohio.

The Labor Department also reported Friday that 27 states saw their unemployment rates increase in August, and 14 states and Washington D.C., reported unemployment rates of 10 percent or above.

The jobless rate nationwide is expected to peak above 10 percent next year, from its current 9.7 percent

The United States lost 216,000 jobs in August, the department said earlier this month, down from 276,000 in July. Employers have eliminated 6.9 million jobs since the recession began in December 2007.

Texas lost 62,200 jobs as its unemployment rate rose to 8 percent in August for the first time in 22 years.

Michigan saw 42,900 jobs disappear, including 25,000 in manufacturing, as the state continued to suffer along with its struggling auto industry. Michigan’s unemployment rate rose to 15.2 percent, the highest in the nation.

Nevada has the second-highest rate at 13.2 percent, followed by Rhode Island at 12.8 percent and California and Oregon at 12.2 percent each.

The jobless rates in California, Nevada and Rhode Island were the highest on records dating to 1976. California and Nevada have been slammed by the housing bust, while Rhode Island has lost thousands of manufacturing and government jobs in the past year.

Georgia and Ohio reported the third and fourth-highest job losses… respectively,

New Jersey added 800 jobs, but its jobless rate jumped to 9.7 percent, the highest in 33 years, from 9.3 percent.

Bottom line: The recovery so far is not creating new jobs in the private sector. The majority of new hires right now are in the government sector which will not result in boosting the GDP. Government does on create earnings, it consumes them.

The facts are this, we have unemployment of 9.7%. The stimulus was supposed to prevent us from going over 8.0%. What happened to those shovel ready projects that were going to put people to work right away? We have lost an additional 2.5 million job since Feb. 2009. We have more people on food stamps than ever before. Since the stimulus money is not creating jobs, maybe we should return all the unspent money to the Treasury. Then we can use it to pay down the debt, fund tax credits for business and capital investment to jump start the economy.

Even more concerning is; if the administration is successful in its’ efforts to put through Tax and Cap, Health Care Reform and tax increases more jobs will be lost.

It is time for a new plan. It is time to start telling your representatives that; we want the unused portion of the stimulus money returned to the Treasury, no more bailouts as well as tax breaks to stimulate business investment and job creation. We need to create jobs! We need to create them immediately. Government can hire people but that does not create revenue or national economic prosperity. No good will come from more government regulation and involvement in the markets. We do not want or need a welfare state. If the government spending does not stop and the free market be allowed to function on its’ own, we will bankrupt America. I for one have no desire to become part of a global nation that takes away my rights, liberties, freedom and the American Dream.

Restore the Republic, Reject the agenda of the Progressive Left!

“But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years”.….. The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”.  –  Thomas Jefferson

A Tribute to the Mob…..

A reminder that the fight is just beginning…… not almost over. An inspirational look at how far we have come in the last 5 months, keep up the fight!

“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale”. – Thomas Jefferson

Quick Hits – More creative thinking from the left…….

 

The Administration sets up its’ U.A.W. Outreach Office

If I studied all my life, I couldn’t think up half the number of funny things passed in one session of congress. – Will Rogers

If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don’t get wet you can keep. –Will Rogers

(AP Perrysburg, OH)— President Barack Obama is creating a White House council to handle issues that affect American communities and workers tied to the automotive industry.

“Today’s announcement reiterates the president and vice president’s deep commitment to standing with our auto communities and workers during these very tough economic times. The White House Council on Automotive Communities and Workers will ensure that the federal government is responding quickly and accelerating recovery efforts to those communities hardest hit,” said Dr. Montgomery. “It builds on the foundation we have laid over the past months to speed up and increase recovery to the region and ensure workers see a coordinated response from their government.”

The recession has been particularly hard on the auto industry, which has lost more than 400,000 jobs in the last decade. Northwestern Ohio has been hit hard by the job losses, and now is banking on more “green” factory jobs.

I am as empathetic as the next guy and I feel bad that so many auto workers are unemployed. But what about all the other industries with unemployment reaching six figures (Examples; Construction & Printing), who is looking out for them? I guess it is harder to pin down the vote of this worker demographic. Seems like the administration is good at creating government jobs between the new departments they keep setting up and all those Czars, they must have created a few thousand jobs by now. The problem is it requires more taxes to pay all these government salaries and it adds nothing to the GDP.

California cities monkey around as the state goes bankrupt…..

(L.A. Daily News) After hiring a feng shui expert and spending more than $7.4 million on a special exhibit, Los Angeles will not be getting three rare golden monkeys from China promised in a 2002 trip led by former Mayor James Hahn, officials said Wednesday.

“It was a decision by the Chinese government and we’re disappointed,” said Councilman Tom LaBonge, whose district includes the Greater Los Angeles Zoo. “But, it is not a waste. We have a beautiful facility and we will put other animals on display there.” The special exhibit was designed to create the sense of a rural Chinese village.

The agreement to bring in the golden monkeys, identifiable by their blue faces and long flowing blond hair, was developed by Hahn during his trip to China.

He went to China hoping to win a panda exhibit for the zoo, but came back with what was seen as a consolation prize – a commitment by China to loan the city three golden monkeys for 10 years.

Now even the consolation has been withdrawn.

Low‐Income Student Food Program Funds Used for Employee Bonuses – California ($3 million)  

The  San  Diego  school  district  misused  $3  million  in  federal  funds  intended  for  nutrition  programs  to  assist  low‐income  students  by  spending  it  on  bonuses  for  employees  leaving  the  district,  according  to  the  Voice  of  San  Diego.   The funds  were  given  to  the  school  district  by  the  Department  of  Education,  which  had  not  yet  decided  whether  the  school  district  would  be  required  to  pay  back  the  misused  funds. (Source: 2008 Worst Waste of the Year, Sen. Tom Coburn, (R) OK)

So California is going broke, they are considering selling off state monuments but in the tradition of liberal spending, they built three foreign monkeys, coming to LA for a ten year visit, a $7.4 million dollar home with all inclusive service. Meanwhile, in San Diego they are stealing lunch money from low income school kids to provide bonus money to employees leaving (?) the district.  This proves it is better to be an animal or a former school district employee than a homeless person or a low income student in CA – you’ll be treated better. If the administration bails out CA, taxpayers in the rest of the country should refuse to pay their taxes. We can not be expected to continue to bailout fiscally irresponsible states, companies or individuals. It is unfair to those that are responsible.

“We could say they spend money like drunken sailors, but that would be  unfair – to drunken sailors. It would be unfair, because the sailors are  spending their own money.” – Ronald Reagan on Congress  

Barbara Boxer is an egomaniac

Sen. Barbara Boxer* (D-Calif.) didn’t like a Brigadier General calling her “ma’am” at an EPW hearing yesterday.

“Do me a favor,” she said, “could you say ‘senator’ instead of ‘ma’am?’ It’s just a thing, I worked so hard to get that title, so I’d appreciate it, yes, thank you.”

Imagine the nerve of this woman — this ‘servant’ of the people — interrupting a Brigadier General to make sure that he stops referring to her as ma’am and starts calling her by the title she ‘worked so hard for’…

Republican Sen. Jim DeMint of South Carolina was also disturbed by the nomenclature request, calling the Senator a “loose cannon” and an embarrassment to her party.

Unfortunately, this is what passes for Congressional leaders these days. Polite is not good enough, she is a senator – he is only a mere Brigadier General. I’ll say no more…

“Whenever a man (or woman*) has cast a longing eye on [offices,] a rottenness begins in his (her) conduct.” –Thomas Jefferson

Now for some hope, presenting … Intelligent Lawmaker of the Week …

Utah Rep. Chaffetz suggests mail carriers conduct Census

Double duty » Proposal would turn postal workers into counters 

Thomas Burr, Salt Lake Tribune Updated: 06/24/2009 03:23:22 PM MDT

Washington » Rep. Jason Chaffetz, R-Utah, wants your mail carrier to count you.

Chaffetz said Wednesday he will introduce legislation to marry the U.S. Postal Service temporarily with the Census Bureau so that the postal workers can help with the once-a-decade count of how many people live in America.

“They really have the workforce in place to do this,” Chaffetz said. “They already go to everybody’s door.”

Chaffetz proposes taking a “postal holiday,” so that mail carriers, instead of dropping bills and magazines to your mailbox, would count the number of people in each household. The Postal Service matches up well with the Census needs, Chaffetz argues.

There are 760,000 postal employees, and the Census is anticipating it will need 750,000 temporary workers to conduct the Census next year. Congress is forking out $11 billion to do the count while the Postal Service is looking at a $1 billion revenue shortfall this year.

The Postal Service had no comment on the bill because the legislation had yet to be formally introduced Wednesday and Census officials did not respond Wednesday to a request for comment.  

Chaffetz says he’s introducing the bill to avoid having the Census hire groups like the Association of Community Organizations for Reform Now, or ACORN, which has been under investigation in several states for voter fraud during the 2008 election.

“The ultimate underlying thing here about the Census is trust,” Chaffetz says. “And people trust postal employees a lot more than somebody just off the street.”

 Meanwhile, Rep. Rob Bishop introduced legislation Wednesday that would force the Census Bureau to count Americans living abroad.

The move is a response to Utah missing out on a fourth congressional seat after the 2000 Census because the bureau did not count thousands of Mormon missionaries serving overseas.

“The Census Bureau could fix this problem right now and count Americans abroad, but they refuse to and are sitting on their hands until Congress makes them do this,” Bishop said. “It seems there is no other solution other than mandating that the Census Bureau change their policy immediately.”

Bishop’s bill follows on the heels of language that Rep. Jim Matheson, D-Utah, tacked onto a funding bill that requires the State Department to study the best way to count Americans abroad.

The amendment is in reaction to the 2000 census when Utah came about 800 people shy of gaining a fourth U.S. House seat. But the census didn’t count Mormon missionaries in foreign countries, a bone of contention with Utah officials who unsuccessfully sued.

Matheson called it “unfair” that LDS missionaries abroad are not counted in the Census.

This is a great idea. Let’s utilize a workforce that is in place, that we trust and needs more to do right now. The government is going to underwrite the massive losses being incurred by the USPS anyway so why not redirect the funding from the census and kill two birds with one stone?

Of course, this is a logical, common sense solution so the question is will Pelosi and Reid allow it to get to the floor for a vote since it wasn’t their idea? Also there is that other minor issue of cutting ACORN out of the deal…..Hmmm, I wonder how that will fly at the White House?

“I love to see honest and honorable men at the helm, men who will not bend their politics to their purses nor pursue measures by which they may profit and then profit by their measures.” –Thomas Jefferson

Things that make you go… Hmmmmmm……..

 

“We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.” — Ronald Reagan

I have finally figured out the strategy being employed by the administration – if we do 50 insane things at once, they won’t be able to stop them all!

Here are a few examples of the strategy in action: 

Cash for Clunkers 

As if we haven’t done enough for the auto companies already there is a bill headed out of committee in the House to “jump start new car sales”.

This $4 billion program would provide federal vouchers of up to $4,500 for people to trade in their vehicles for new ones that get better mileage. 

How does the program work: The government would send up to $4,500 to the selling dealer on your behalf, if you: 

1. Trade in a car that — this is a key point — has been registered and in use for at least a year, and has a federal combined city/highway fuel-economy rating of 18 or fewer miles per gallon.

2. Buy a new car, priced at $45,000 or less and rated at least 4 mpg better than the old one (gets a $3,500 voucher). If the new one gets at least 10 mpg better, you get the full $4,500. 

Example: Trade that well-worn 1985 Chevrolet Impala V-8 police special, rated 14 mpg, for a 2009 Impala V-8 rated 19 mpg and the government will kick in $3,500. Downsize to Chevy Cobalt (27 mpg) or even a larger Honda Accord (24 mpg) and get $4,500. (source: USA Today) 

The bill also requires destruction of the trade in vehicles to keep them off the road. The money would be pulled from funds allocated to the Dept of Energy in the stimulus bill. Mileage ratings back to 1985 are available @ : http://www.fueleconomy.gov

President Obama is urging Congress to create consumer incentives for new car purchases but critics say this is an artificial attempt to boost car sales. 

“It’s defying the laws of economics and saying we can manufacture enough of a demand to keep the auto industry afloat,” said Rep. Jeff Flake, R-Ariz. 

Seriously, how many more “problems” can the government solve by stepping in and footing the bill. Oh, wait the taxpayers will foot the bill. In the long run, you can’t keep spending money you don’t have unless you raise taxes!  Good thing they didn’t think of this type of program sooner. If they had, instead of those crappy digital converter boxes, everyone without cable could have gotten $500 towards a new flat screen and a voucher for Direct TV. To read more go to: 

http://www.msnbc.msn.com/id/31183767/ 

http://www.usatoday.com/money/autos/2009-05-11-chrysler-gm-cash-clunkers_N.htm 

Business cell phones and laptops are an “employee benefit” and therefore, that’s right TAXABLE! 

In the 80’s the IRS treated cell phones like company cars requiring users to separate their personal use from business use so they could tax it like income. This was to prevent expensive personal cell phones from being written off as business expenses. (Phones were about$2,000 and air time was $2/minute) 

“The rationale behind this policy perhaps made sense in the 1980s, but it doesn’t reflect how people live their lives and the ubiquitous nature of cell phones,” Sprint Nextel spokesman John Taylor told The Washington Post

Under the proposed rule the IRS is asking companies to charge 25% of cell phone use as personal and treat it as taxable income. They are also looking at extending these rules to texting, email, the internet and use of a company laptop. This makes the rope that ties you to your job 24/7 a benefit! 

The alternative to the flat 25% tax approach would be to pay only for actual usage by creating a log to create a record of actual use. 

“Do we really want employees to, instead of being productive, spend their day logging every e-mail they send, every Web site they browse and every time they use GPS?” asked Howard Woolley, senior vice president of Verizon Wireless. 

For hard working Americans everywhere, this is another slap in the face. For most employees that carry a company phone or laptop it is not a choice – it is a requirement. Where will this end? This is just another clever attempt to raise money through taxes to fund all the programs we can’t afford but are implementing anyway. To read more, go to:

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/12/AR2009061203897.html 

http://www.nbcbayarea.com/news/business/The-Tax-Man-Comes-Calling—-on-Your-Cell-Phone.html 

Soda you think we should tax pop? 

Speaking of things that we can’t afford to pay for what about healthcare reform – with an estimated price tag of $1.2 trillion, we will need to find some new sources of revenue. 

Fear not, the Senate has an idea. Presenting the “soda” tax. The plan is to place an excise tax on regular soda, certain fruit drinks, energy drinks, sports drinks and ready-to-drink teas. Diet drinks would be exempt. The proposed tax at 3 cents per 12 oz. can would raise an estimated $6 billion annually. 

The logic is that these drinks are bad for you and therefore taxing you for their consumption is a good way to help fund healthcare. Supporters of the tax point to research indicating that consumption of sugar-sweetened drinks can result in obesity and diabetes. The tax theoretically would save medical costs by lowering consumption which would reduce health problems. 

Michael Jacobson of the Center for Science in the Public Interest, which is pushing the idea, said in his testimony. “Soft drinks are nutritionally worthless…[and] are directly related to weight gain, partly because beverages are more conducive to weight gain than solid foods.” (source: CBS News)

So what’s next?  Alcohol is already foregone conclusion. Butw atch out ice cream, cookies, cakes and pies could be next. This might not be as far fetched as it seems. In our new environment of “change” nothing has proven to be off limits. 

This just another example of the new “nanny state” approach to government, you know where the government decides what is best for us in every aspect of our lives. For more details, go to: 

http://online.wsj.com/article/SB124208505896608647.html 

http://www.cbsnews.com/blogs/2009/05/12/politics/politicalhotsheet/entry5009316.shtml 

President to propose new government power to seize key businesses 

The Obama administration this week will propose the most significant new regulation of the financial industry since the Great Depression, including a new watchdog agency to look out for consumers’ interests.

Under the plan, expected to be released Wednesday, the government would have new powers to seize key companies — such as insurance giant American International Group Inc. — whose failure jeopardizes the financial system. Currently, the government’s authority to seize companies is mostly limited to banks. (source: L.A.Times) 

The Federal Reserve, already arguably the most powerful agency in the U.S. government, will get sweeping new authority to regulate any company whose failure could endanger the U.S. economy and markets under the Obama administration’s regulatory overhaul plan. (source: The Washington Post) 

Here we go again – sweeping change to SEIZE private businesses and more authority for the Federal Reserve the one “government agency” that can hide behind banker privileges and not be compelled to answer questions by Congress. More government power, more government oversight…. This looks less and less like America all the time! What is it going to take to scare people into fighting back? Read more at: 

http://www.washingtontimes.com/news/2009/jun/16/plan-gives-fed-sweeping-power-over-companies/?feat=home_headlines 

http://www.latimes.com/business/la-fi-financial-regs16-2009jun16,0,4262249.story 

Today’s Cool Quote: 

Liberals believe that men–left to their own devices–are not to be trusted. They also believe in the goodness of government; a government composed of men. This paradox may help explain why many liberals are angry much of the time.” –RE Bierce

“I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations.” 
James Madison 

The Waxman Markey Climate Change Bill (Part 4)…… The Potential Impact

In the final installment of this series, I will pull together the factors of this bill that will ultimately impact all Americans if signed into law. A bill like this comes with a price tag that is not inconsequential. 

“The answer to global warming is in the abolition of private property and production for human need. A socialist world would place an enormous priority on alternative energy sources. This is what ecologically-minded socialists have been exploring for quite some time now.” – Louis Proyect, Columbia University 

So here is a list highlighting a number of things that will be impacted. 

The Economy at Large:  

Job Loss: There will be fall out in the form of lost jobs as a result of this bill being passed into law. American companies will be faced with significantly higher energy costs as a result of the cap-and-tax plan and other provisions in the bill. This will put U.S. based manufacturing facilities at a competitive disadvantage with plants in other parts of the world not forced to play on the same field of “environmental stewardship”. 

This could result in millions of American jobs going overseas. The bill also mandates conceptual, unproven technologies for coal-fired plants which could result in plant closings if they are not able to comply with the new federal regulations. This could increase dependence on natural gas causing an increase in prices. 

Proponents of the bill claim the opposite; this will result in millions of new “green” jobs. Reality check – the new industries and jobs will require significant capital investment, research and can not be launched quickly enough to offset the losses. In other words, the ramp up is longer than the ramp down. Considering the current state of our national economy the timing of such an initiative seems potentially disastrous. 

Higher Energy Costs: The proposed regulations in the bill require a new Federal Renewable Energy Standard. The standard starts at a minimum of 6% in 2012 and escalates to 25% by 2025. The Department of Energy will issue utilities “credits” for renewable energy they generate which can be sold, transferred, or exchanged.  If a utility cannot meet the RES it would be required to purchase credits to make up the difference. In effect this becomes a hidden tax and a new source of revenue for the government. To offset these costs the utility companies will pass them on to their customers, ultimately resulting in higher energy prices for everyone. The problem here is that currently renewable energy technology is neither efficient nor cost competitive which is why it is not being implemented in a wide spread manner yet. Forcing the market to adopt this technology before it is ready will cause prices to increase rapidly. This mandate in effect put the Dept. of Energy in charge of the energy market. There are also concerns that a RES would impose a uniform federal standard on States despite varying sources of renewable resources.  Southeastern states would be especially hard hit.  

There are many other requirements that also will drive up energy costs up in this bill. Here are a few examples:

Cap and Tax – This issue requires a blog of its’ own. Please see my April 25th blog titled “Cap and Trade” or “Bait and Switch”  

Carbon capture and sequestration – This is the term used to describe a technology that captures carbon at its source and stores it before it is released into the atmosphere.  Carbon capture and sequestration (CCS) is designed to be a method of reducing the amount of carbon dioxide (CO2) emitted into the atmosphere.  In general, any CCS system would have the following components: (1) capturing and separating CO2 from other byproducts; (2) compressing and transporting the captured CO2 to the sequestration site; and (3) sequestering CO2 in geological reservoirs or in the oceans. This is not only as ridiculous as it sounds but it creates yet another expense that will need to be passed on to the end user. How much do you suppose it will cost to “dispose” of carbon dioxide? We better hope they never apply this logic to methane or nobody will be able to afford hamburger! 

Smart Grid – This is a distribution system that allows information to flow from a customer’s electric meter in two directions: both inside the house to thermostats, appliances and other devices then back to the utility. The bill facilitates the deployment of a Smart Grid, including measures to use it to reduce utility peak loads and promote capabilities in new home appliances.  States and utilities would determine and publish peak demand reduction goals. The goals would specify a reduction to a lower peak demand by 2012.  The bill also directs the Federal Energy Regulatory Commission (FERC) to reform the regional planning process to modernize the electric grid plus provide new transmission lines to carry electricity generated from renewable sources. 

New Transmission Lines – The bill does not adequately address the need for new transmission lines the RES will require. These transmission lines would likely be subject to not-in-my-backyard opposition that impedes permitting. How the states and utilities will work through these issues remains to be seen but it will likely be expensive and challenging. Also additional costs for renewable energy transmitted from far away resources across longer transmission lines to states without such resources could further impact prices. 

Nationalizing the Grid – Under this bill the Federal Power Act is amended to require the FERC to adopt grid planning principles to achieve national policy goals. These goals include energy efficiency, a Smart Grid, and underground transmission technologies. Although better transmission infrastructure is the key to reliability, nationalizing the development of the grid might nationalize costs and raise questions on eminent domain. Again any program that the government is in charge of planning is going to drive up costs not efficiencies. 

Industrial Energy Efficiency – Under this plan the Dept. of Energy would develop industrial energy efficiency certification standards.  It also establishes a financial award program for electric or thermal energy generation facilities, which currently use fossil or nuclear fuel. Theoretically, this would encourage additional types of thermal energy production.  The legislation authorizes “such sums” for these awards. 

Building Energy Efficiency – The bill also contains several “energy efficiency programs” for commercial and residential buildings.  The legislation sets targets for national building codes to make a 30 percent improvement in energy efficiency within three years, and a 50 percent improvement starting with building codes released in 2016 and beyond using 2004 or 2006 codes as a baseline.  The Federal government will provide funding to States to implement these requirements. 

Lighting and Appliance Energy Efficiency – There will be several new federal standards for lighting and household appliances.  The bill would create a new standard for outdoor lighting fixtures effective in 2011, with progressively tougher standards by 2015.  The legislation would place new energy standards on appliances and would even make it a federal offense to sell appliances that do not meet the new requirements. 

International Reserve Allowance Program – Border tax adjustments or border tax assessments, are import fees levied by carbon-capping countries on goods manufactured in non-carbon-capping countries. We used to call these tariffs. The bill establishes a program to set up binding agreements committing all major greenhouse gas emitting nations to contribute equitably to the reduction of global GHG emissions.  Since we can not require foreign nations to cap their own emissions, the bill establishes a border adjustment program to require foreign manufacturers and importers to purchase emission allowances to “cover” the carbon emitted in the production of products being sold in the United States. The idea is to provide U.S. manufacturers competitive relief against their foreign counterparts. Any cost to foreign producers will be passed on to U.S. consumers.  Not only will domestic products be more expensive, but so will foreign goods. This will likely have devastating effects on free trade and foreign relationships.  

We, as Americans, have a duty to be good stewards of the planet. We have a responsibility to improve the way we generate energy and manage the earth’s resources. However, living up to these responsibilities does not require us to abandon the principles of government that made our nation strong and powerful. We have a responsibility to future generations of Americans which in addition to a healthy environment includes leaving them a free, sovereign and prosperous nation like the one our parents and grandparents left us. We do not have to choose between the American Dream and a healthy planet – we can have both. We certainly do not need a bunch of politicians and left wing scientists with an agenda manufacturing a crisis to do their own experiment in social re-engineering. 

“I think if we don’t overthrow capitalism, we don’t have a chance of saving the world ecologically. I think it is possible to have an ecological society under socialism. I don’t think it’s possible under capitalism.” – Judi Barri, Earth First

General Electric (NYSE:GE) is the parent company of the major media conglomerate NBC Universal, which owns media outlets NBC, MSNBC and CNBC. At times that has led to the lines between corporate advocacy and journalism being blurred. GE C.E.O. Immelt used his platform at CNBC to make the case for a cap-and-trade program to curb emissions – something Obama has called for and one Congressional committee is debating this week. “There’s going to have to be a price for carbon,” Immelt said. “In some way, shape of form, you’re going to have to create some certainty. You have to make technology your friend in this debate. ….. I think about things like global warming. We’ve been on this for four or five years.” Immelt contended he wasn’t an environmentalist, despite criticism that his networks’ have patterns of promoting the green agenda. Immelt told “Squawk Box” the science surrounding man-caused global warming was “compelling” and that it was only a matter of time before something will be done about carbon emissions. The General Electric CEO said he favored a cap-and-trade system to regulate carbon emissions versus a carbon tax. – source: Business and Media Institute 5/20/09

More government intervention is not the answer to improving the environment. Besides, the science does not support the claims the U.N., Al Gore, the media and other fear mongers are making. We do not need to redistribute our wealth as the socialist environmentalists are demanding. We also do not need to make elite multi-national corporations any richer. GE is an example of just such a company. They have used their media empire (NBC, CNBC & MSNBC) to promote fear with heavy handed marketing of the “green” agenda and climate change issues. Meanwhile, they have heavily invested in alternative energy establishing a huge footprint in wind power, solar power as well as smart grids and those high efficiency appliances I mentioned earlier. GE also spent an estimated $20 million on lobbying efforts in support of their “green” business plan. Also just for good measure, GE recently announced the launch of a new subsidiary called Greenhouse Gas Services, which will facilitate the trading of carbon tax credits. There is your answer on why Mr. Immelt prefers carbon credits to carbon taxes! Do you suppose they have a motive that goes beyond their corporate concern for a healthy planet? 

The net result of this unfathomable bill will be higher energy prices, reduced global competitiveness, continued job loss, more government regulation, a stifling of free markets and a reduction of the standard of living for all Americans. This bill has the potential to effectively kill what remains of capitalism in our country. We must block this legislation. We can improve our environmental stewardship without killing our economic system. Write your Congressional and Senatorial representatives and tell them to vote for America by voting against this bill. Our country’s future as a sovereign world leader depends on it. 

“The only hope for the world is to make sure there is not another United States: We can’t let other countries have the same number of cars, the amount of industrialization, we have in the U.S. We have to stop these Third World countries right where they are. And it is important to the rest of the world to make sure that they don’t suffer economically by virtue of our stopping them.”—Michael Oppenheimer, Environmental Defense Fund