Tax and Spend is not Change

I warned you, Obama wants to spend like a drunken sailor and tax like crazy.

First, the $787 billion "Stimulus" package, and now the Democrats want to spend another $401 billion, with Obama wanting taxpayers to bail out everything from mice to McMansion-owning bus drivers.

How does he and the Congress propose to pay for this massive redistribution scheme? The simple answer since Karl Marx is to tax "the rich." While there is great speculation as to who "the rich" really are, I will stick with some basic facts.

Anybody who is currently in the 36% federal income tax bracket will now be taxed at 39.6% at the expiration of the "Bush" tax cut. Maybe that's too broad of a group so let's look at a more discrete set of folks.

According to the Wall Street Journal (really read this article, its worth it),

Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Did you get that? The top 2% pay 62% of ALL federal individual income tax. I think that is more than their fair share, especially since they don't get additional services. Further, the top 50% pay over 96% of individual income tax. So, according to John Edwards, we really do have two Americas, those who pay income tax, and those who consume it through government benefits.

Just in case you didn't think you were paying enough, Obama wants to nationalize health care. Haven't we learned enough from the United Kingdom, Japan, and Canada that government health care is not only an atrocious waste of money, but also leads to poorer care??

Citizens and taxpayers of the United States, now is the time to contact your representatives in Congress and demand they stop wasting your money. These massive, and I mean more massive than we have ever seen, deficits spell hyperinflation. That is bad for everybody. Also demand that as a taxpayer, you don't want your taxes funding the 9000 earmarks in the Democrats new budget. In case you support these things, and are in the top 50% of taxpayers, get used to socialism and a declining standard of living, as that is what is happening.

Wake up America! Its happening right in front of your eyes!!

US Taxpayers Cover Freddie's Fannie

The US taxpayer is going to insure the financial solvency of two public companies. Sounds a bit odd. So odd, that Jim Rogers of Rogers Holding proclaims, " (the U.S. is )more communist than China right now."

According to the Wall Street Journal Print edition ("US Seizes Mortgage Giants", Sept. 8, 2008, A1)

"In its most dramatic market intervention in years, the U.S. government seized two of the nation's largest financial companies, taking direct responsibility for firms that provided funding for around three-quarters of new home mortgages."

What is person to think? Should the government be meddling in a publicly-traded company's solvency? Is it right to have the government backing the fortunes of shareholders? Is there some greater good at stake to make this more palatable?

Freddie Mac and Fannie Mae are federally-chartered, publicly traded companies. Both companies' missions are to make home ownership more affordable, as well as making financing more reliable. Sounds good, right? Ah, but the catch is that when government is in the business of making things "more affordable," it presumes that the market can't do that effectively, thus creating constraints and other conditions not present in the market, which may or may not increase risk.

While millions of Americans have benefited from home ownership, and world financial markets have benefited from the buying of mortgage-backed securities (until recently), it would appear that these businesses have been a success. However, with flood of loose mortgages and the collapse of the credit market, maybe these "affordable" mortgages weren't such a good idea.

But they were! When the government chartered the businesses, it assumed the risks via the conditions placed on Freddie and Fannie. While there has been considerable legislative debate over their existence, they have provided the financing for millions of mortgages. However, it is time to pay the piper, and that is just what the government did, step in and put US taxpayer money on the line to pay for a system set up over four decades ago.

Right, wrong, or indifferent, when the government proposes interference in the free market, it is up to the citizens to either approve or disapprove of the action. US taxpayers should view this situation with great concern and think long and hard about the value of these two institutions.

I don't presume to have an answer, but I am willing to hear the arguments for both sides and would like to see more detailed analysis to make an informed decision.