New Mexico, as are most states run by Democrats these days, is greedy, corrupt, and broke.
Our legislature meets yearly in January and, seeking to allay a current state budget deficit of over a half billion dollars in one of the poorer states of the union, rather than cut back spending to a useful degree or trim workers from our bloated government is going to stand pat.
Taxes, taxes, taxes are the only words of the day in Santa Fe. One idea from a local politician is, of course, the old standby of raising cigarette taxes, and in this case, a dollar a pack. Picking the pocket of the one group that’s pariah and friendless is the usual move when governmental money problems come along as is the motive, in this case, the faux concern for smokers’ well-being to justify this money grab.
There’s something about our politicians constantly bringing up ’sin’ taxes to pay for their idea of government that just has to stick in your craw. They seem to know so much about our sins yet they blindly ignore their own.
For instance:
The sin of overspending – like a spoiled child in a candy store, our representatives in Washington want everything they see and, thus, have spent us into a 12 trillion dollar national debt. Plus, Mr. Obama has come out with a 2010 budget which features a $1.56 trillion dollar deficit. I’d like to spend at this rate but if I did, the guy from the big screen TV store would come down and break my legs.
Ron Paul participated in a short but quite good interview with Bankrate.com in its “Fame and Fortune” series. With one answer Paul sums up the health care debacle.
Bankrate: What do you think of the health care reform package?
Ron Paul: It’s a disaster! As a matter of fact, it was in the early ’70s when the Republicans started accelerating intervention and having managed care. That’s when the tax codes changed and there were mandates. It was the government all of those years that has participated in pushing the cost of medicine up and causing it to become bureaucratic and causing the charity hospitals to go out of business. Managed care has been around (since) about the same time as we lost the gold standard, and it’s managed care that we should blame.
The real problem with medical care is it costs too much. Nobody would complain if it didn’t cost so much. But it costs so much because of inflation plus the bureaucracy we’ve created.
With today’s unexpected decline in December payrolls, the cry for more job-related stimulus will grow even louder. But the sad truth is that any new stimulus or jobs bills will ultimately swell the ranks of the unemployed, thereby raising calls for an even bigger federal effort. If we are not careful, government regulations, subsidies, and spending, all designed to fight unemployment, could push the labor market into a death spiral.
Regulation acts like a tax on job creation. By subjecting employers to all sorts of extra expenses when they hire people, regulations increase the cost of employment far beyond the wages employers actually pay their workers. In fact, some regulations are specifically tied to the number of workers employed. This provides some employers with a strong incentive to stay small and not hire.
The minimum wage law, which is really just a very visible workplace regulation, actually makes it illegal for employers to hire certain individuals and destroys entire categories of jobs. For instance, faced with high labor costs, some restaurants will avoid hiring dishwashers by switching to plastic utensils and paper plates. On a larger scale, factories may decide to switch to robotic assembly lines if human labor gets too expensive.
by John Browne – Senior Market Strategist, Euro Pacific Capital
President Obama’s State of the Union message only serves to reinforce my forecast that investors will continue to find better returns in markets outside America and in currencies other than the U.S. dollar. Indeed, the reward gap may well increase.
Nothing in the President’s speech indicated willingness to do the hard work of cutting spending. Rather, he reiterated his commitment to a costly new healthcare entitlement and more spending on make-work programs. Only days later, his budget acknowledged that, even before factoring in the cost of his proposals, the federal government is unlikely to be in surplus for the foreseeable future. In response, Moody’s has issued a warning that the United States’ triple-A credit rating is not unassailable. In short, the trend set some ten years ago will continue.
The cost of the federal government is vastly greater than the benefits it provides. And the American people don’t want such a bloated budget. According to a January 29 Rasmussen Report . . . Read More »
In this week’s much anticipated State of the Union address, President Obama again demonstrated his poor understanding of the fundamental problems that confront our nation. By following the advice of the same people who helped guide our economy to the precipice of total collapse, Obama now threatens to push it over the edge.
Notwithstanding his well crafted lip service regarding future spending restraint, the essence of his current program is for more government spending and larger deficits. For all his talk about job creation, his policies will further burden those who might otherwise create those jobs with higher taxes and more regulation. While he did call for tax cuts for the middle class and offered what amounts to bailouts for those struggling to repay student loans, such cuts do nothing to promote growth in the near term and will add to the deficits in the long term.
The President spoke optimistically about the future, but in reality there is little evidence to support such an upbeat outlook. He began his speech by assuring us that the worst of the storm had passed. General Custer may have said something similar when the first wave of Indian attacks ebbed at Little Big Horn.
While Obama did have some harsh words for Wall Street (not exactly a courageous political stance), he leveled no criticism at the Federal Reserve or other government agencies that had financed and guaranteed all the ridiculous real estate speculation that precipitated the crash. And while he at least conceded that the prosperity of the last decade was based on illusions, he continued to endorse the very policies that produced the mirage in the first place.
Today I spent part of my day at a local small family-run business, and listened to the owner gripe about excise tariffs on equipment from abroad, immigration difficulties, and frustration about the redistribution of wealth from his business to the federal government’s warfare and welfare programs. As I was leaving to make another house call and visit a single mother of three children, he had one request which was to listen to the 1970 song “Monster” by Steppenwolf. The ending of this song is an appropriate lead-in to my comments on today’s State of the Union address (transcript here).
While his oratory skills are to be admired, President Obama assumed the role of a master central planner where the government must intervene or else the economy fails. The key planners in any market economy should be individuals, not the government as I learned while living in China. Obama made no mention of the true root cause of the depression – the excessive money-printing and credit expansion of the Federal Reserve. There was no mention that government bailouts, stimulus plan spending, and interventions have changed what would have been a sharp and brief recession into a prolonged depression. There was no mention that bank balance sheets are still impaired by billions of toxic assets and deficit spending in all areas of government is out of control.
Congressman Ron Paul talks about Tim Geithner’s testimony at the January 27, 2010 hearing on AIG. Even though Dr. Paul received unanimous consent to question Geithner during the hearing, time was cut short and he was not able to do so.
Ron Paul appeared today on CNN to discus Obama’s State of the Union speech tonight. This was another excellent appearance from Paul where he hones in on the problems as he usually does, but also offers things that can be done to help fix our problems.
It ends with Paul being asked what he would say to Obama to help get the country on the right track.
Ron Paul, who seems to be everywhere in the media these days, appeared on Neil Cavuto’s Fox Business show earlier this evening. They discussed Obama’s spending “freeze” fallacy.
Liberty Maven
by John Browne – Senior Market Strategist, Euro Pacific Capital
Peter Schiff, president of Euro Pacific Capital and author of 
