Inside the raid that killed bin Laden - Yahoo! News

This one is for you Ron. You are missed. I can only hope that this brings a little bit of closure to your wife and kids. You left way too early.

Pizza MF

Inside the raid that killed bin Laden - Yahoo! News

This is a good day.

Econ in a Rap

Economics in a Rap

Heritage Budget Chart Book Shows Pictures of a Budgetary Disaster | The Foundry

Nice little graph on the National Debt with a nice little article.

Heritage Budget Chart Book Shows Pictures of a Budgetary Disaster | The Foundry

Where Did All the Anti-War Protestors Go? « John Stossel

Good question??? Where did they all go.

Where Did All the Anti-War Protestors Go? « John Stossel

What is the future of democracy?

What is the future of democracy?  If it a realistic option?

The problem with a Democracy is that the powers of the majority are absolute and unlimited.   Many times this leads to a type of tyranny majority that rules over the minority.  In a Democracy the minority does not have much to say because what they majority says is the law.  Where can you go to challenge a law in a Democracy?  Nowhere, in a Democracy the majority has all the power in the world, as long as votes are decided by 50% + 1 then majority rules.

A Republic on the other hand is not simply rule of the majority.  It is nowhere close to what a Democracy is.  In a Republic we have a government that has constitutionally limited powers that are limited by the Constitution itself.  A Republic actually protects the rights of the minority, but not only the minority, it protects the rights of the individual.

What the United States of America has for a system of government is not a Democracy but a Republic.

I pledge Allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with Liberty and Justice for all.

http://www.wvsd.uscourts.gov/outreach/Pledge.htm

As you can see the Pledge of Allegiance has the word Republic in it and not Democracy.

I believe that the biggest problem with a Democracy is the rule of the Majority.  It is really easy to see in a Democracy how it can become corrupt really quickly.  It would take one time that a corrupt politician was elected and then to keep himself in office he would just pass hand me downs to anybody that voted for him.

Alexander Tytler said:

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.

Alexander Tytler

It is real easy to see how a Democracy can is truly a bad form of government. In a Democracy there are no checks and balances. 

I believe that Democracies are doomed to fail right from the beginning.  There are two problems working against a Democracy.  Problem number 1 is government and problem number 2 is people that depend on government.  I look at government as a cancer or a leach, I don’t think I have ever seen a government program be shut down or repelled.  In fact what you usually hear when a government program is not working is to throw more money into the program to make it work.  This in turn leads to a very loose fiscal policy with the people wanting more money throwing more money at the politicians that will get the money to them.  Sooner or later a nation will run out of people to tax or services to tax and will run out of money.  When this happens you can see how things can get from bad to worse.

In short I believe Democracies will fail where ever they are tried.  As soon as the majority gets a taste of what they can vote for themselves it is all downhill from there.  

What is the process to develop an economic policy that provides services and sustainability?

I believe that the best way to develop a Nations economic policy is by having low taxes on both income and business.  I would go as far as saying that the income tax should once again be eliminated, but that could be another post.  Cutting the government’s size and making it leaner and faster to incorporate new ideas or new technology would also lead to better services and better sustainability.

One of the biggest problems that I see in providing services and sustainability is the inability to predict the future.  Many politicians and government agencies do a very poor job of doing research.  A great example is the entitlement programs in the United States.  On page 302 of our book, 6^th edition, there is a very nice table that shows how spending on the Welfare State, entitlement programs, has pretty much gone out of control, from $13 billion in 1954 to $1.9 trillion in 2008.  This is called mandatory spending as referred to on page 302 in the book.  Many can look at that amount and say that it is unsustainable.  This number is actually way off because the federal government does not follow the same accounting rules that they make companies and state/local governments follow.  According to a USA Today news article from 2007, the federal government does not have to, “count expenses immediately when a transaction occurs, even if the payment will be made later.”  What this leads to is finding out that the federal government, or the taxpayer, is now on the hook for $59.1 trillion in liabilities. As of 2007 that amount was equal to $516,348 for every US Household.  http://www.usatoday.com/news/washington/2007-05-28-federal-budget_N.htm

Another example of the government’s inability to do proper research is the CBO.  The CBO, The Congressional Budget Office, is suppose to advise the government on what the effects will be with the changes that they plan to make.  The problem with the CBO is that they don’t take past behavior into consideration and how tax changes can and does change a person’s behavior. 

In the book Basic Economics by Thomas Sowell on page 396, Mr. Sowell writes about how predicted tax revenue increases did not come about in the state of Alaska when they tried to raise the tax rates on cigarettes:

The tax was to go into effect October 1, 1997.  Smokers struck back by buying an astounding 175 million more cigarettes than usual in the three months before the tax deadline.  Richard Watts of the Great Alaska Tobacco Company told the local papers that some smokers even bought sixty-carton cases-at $1,200 each-rather than pay the tax.  As for Alaska’s Department of Revenue, it saw its revenue estimates go up in smoke: collections slowed 60 percent following the infamous increase date.

Another example, more specific to the CBO, that Mr. Sowell writes about is on page 397.  In 1986 the CBO had advised the congress that raising the capital gains tax rate from 20 to 28 percent would increase revenues received from the tax.  It was the opposite that happened and tax revenues actually fell.  Mr. Sowell goes on to write, “Conversely, cuts in the capital gains tax rate in 1978, 1997, and 2003 all led to increased revenues from that tax.”

As we can tell the government is not a great predictor of future revenues.  This leads me to another problem, useless and empty talk.  Many times you will hear politicians and different figures in government talk about this tax increases or tax cuts.  Here is the problem, telling everybody that this will be a, “$500 billion tax increase” or a, “$400 billion tax cut” is inaccurate.  All that the government can do is raise or lower the tax rates and this will have an effect on the tax revenues.  Nobody can actually claim that it will be a, “$500 billion tax increase” or a, “$400 billion tax cut” because they don’t know.  The actual consequences of the tax cuts or tax increases will not be known until after they have been in acted.

Now here is a problem that I have noticed.  Going back to the top of this post where I was talking about mandatory spending on entitlement programs, we can see how guesses and government projections have made the current system completely unsustainable.  More problems arise when people stand up and try to correct or overhaul the current entitlement programs, trying to make them leaner and more efficient.  This will usually bring out the fear mongers, Ahh, they want to take away your health care, they want to steal your retirement, and they want to end school funding…Blah, blah, blah, blah.  So when somebody tries to stand up and correct these issues they get shut down in the media and told to go hide in a hole somewhere.  That’s a big problem when programs can not be re-organized or overhauled to fit our needs of today, not the needs of the 1930’s or the 1960’s.

All of this leads me to say that in order to create an economic policy that provides services and sustainability we need to be free to reform and we need to be free of government.  One of the biggest problems with government is that they try to make a one size fits all policy with everything that they do, it can’t and it won’t work.  We need taxes to help the ones in need, but we need to get the government out of our lives to make any economic policy sustainable.  People need to be put in charge of their health care, retirement and education among others.  

Democratic senator wants Internet sales taxes | Privacy Inc. - CNET News

Democratic senator wants Internet sales taxes | Privacy Inc. - CNET News

Nickel here and a nickel there. Paper cut here and a paper cut there and there and there, soon you're bleeding to death.

1% will turn to 1.5% then to 2.0% and so on...I don't think this is even for anything...it is just to make it "Fair."