Some Redirection

I haven't posted any new material in a while on this site as I've created a page on Facebook to get some of my thoughts out there.  Search for "Right Down Reality" on Facebook and like the page to continue to get updates.  Twitter's still available and I'm always putting something up to keep you guys in the loop.  As always, your feedback is important to me

Sensible Ideas in a Senseless World: My ideas for stimulating the economy

Last week a discussion on the wall of the President’s Facebook townhall left an impression on me. I was speaking to another economist about the policies of the current Administration and we each had different opinions about the success of them. When we came to a wall, the question was asked: What are your ideas then? I had ideas, and I shared them, but it made me think about how much time is spent criticizing others without presenting alternatives. Most of the criticism isn’t even based upon logic, but a personal dislike for the owner of that thought. Well, this gave me the idea of starting a video series explaining the criticisms of the current Administration based simply on economics and presenting alternatives to them.


Now, I’ll warn you, the subject of economics probably wouldn’t be as exciting to you as it is to me, but because it is important enough to affect everyone’s lives than it should be important enough to try to have a better understanding of it. 

That being said, I would like to start with our tax code, specifically with the notion of “corporate taxes”. When asked who pays corporate taxes, many of us have been led to believe that the business pays those funds to the government, which is a serious misconception. Taxes are funded solely on an individual basis, and as such a corporation does not pay corporate taxes at all. Businesses are tax collectors on behalf of the government. Think about it. A business treats the tax as any other expense which gets passed down one of three ways: the consumer, employee, and shareholders (as explained in a piece I did in 2008). The pain of paying the higher taxes trickles down to one of the three beneficiaries of the business’ success as long as the business can remain competitive in the market. In a roundabout way, I’m basically saying that the idea of taxing businesses and corporations is another way for politicians to essentially tax the public (without the public being aware of it). Have you ever heard of a politician promising to lower the income taxes for the lower and middle classes, while also promising to get back at those greedy businesses and corporations by raising the corporate tax rates to fund social programs to benefit the growing poor and middle class? Ever notice how wages have stagnated as the cost of goods rise prior to the current recession as early as the 90s? Notice that as the world’s become globally connected, business has left this country to beneficial nations?

Retaining what I just pointed out, consider this idea to stimulate the economy: abolish the Corporate Tax rate completely. Doing so will allow business to have more revenue to play with, which would result in any of the following: stable stocks, expansion (jobs/wages/benefits), lower prices for the consumer. Business overseas will notice the friendly change and move to take advantage of the zero rate, making this country more appealing compared to other nations. If you want true stimuli, this purely economic based act would have an immediate (within a year) impact on the marketplace that would benefit the people. Yet, this act alone would not suffice….

The President recently called for the removal of federal subsidies to oil companies in retaliation to the steady increase in the price per barrel in a letter addressed to the Minority an Majority leaders of Congress with the intention of punishing the private oil companies for the increase in fuel prices. To his base and the uneducated, the idea of punishing big oil is considered a great idea. For the pain of paying at the pump, someone has to be blamed and punished. Just think about this for a second, and also consider what I said earlier about businesses and expenses. The initial shock of having those subsidies removed will dramatically increase the price we’d pay at the pump simply because what we pay at the pump has been subsidized by the government this whole time. In effect, the very people cheering this movement on will be hit the hardest once this action is taken. The trickle down effect will spread to every single industry that uses any product that comes from the oil industry, inflating the prices of food, clothing, housing, etc. Not to mention that when it comes to federal involvement in the marketplace, this is another example of the feds picking which industry wins/loses based on the political climate. In the quest for “fairness” in the marketplace, this is hardly fair business practice.

Couple the zero Corporate rate with a plan to end to all forms of Corporate Welfare. In 2006, the federal government allocated $92B subsidies to many companies including Boeing, Xerox, IBM, Motorola, Dow Chemical and General Electric. The state and local governments collectively paid out $40-50B. I just pointed out that the President is calling for the removal of subsidies to the oil industry simply because the political climate calls for it. I would agree with him, if he would take it further and completely remove all forms of corporate welfare as an economical gesture of good will. The government should be neutral in the choosing of which business receives an incentive over another. This practice of choosing who wins/loses has opened the doors for political corruption, lobbying, damaging policymaking, etc which hurts the average citizen and tainting the political process. By removing the practice, the average consumer has more say in the decisions a business makes and the future of the company. The company would no longer have to concern themselves with trying to obtain subsidies before their competitors by wasting time and money in lobbying efforts to that end, but would have to rely on catering to their customers in order to compete.

There are some concerns about the transition to such a system because there will be some of the same issues. Market influence into politics will never die unless the politicians themselves choose to make decisions that benefit the people they represent and not their campaign coffers. Regulation (a good thing, BTW) opens the door for lobbying/bribery as long as the restrictions are unnecessary, redundant and created for the purpose of assisting special interests. A reduction in some of the government programs that depend on the corporate tax system is a given, much of which can be sustained by removing waste fraud and abuse within them (no, really!) and the influx of jobs would reduce the number of Americans that are dependant on programs like WIC, Welfare, Section 8, etc.

These ideas aren’t perfect, but are simple and address the main concerns of the people in the country. The free market system works…..if the government reduces it’s influence to levels that benefit society as a whole.

For more ideas based on economic principles I've already covered (would coincide with the above):

Business
Social Security
Healthcare
Taxes
 
Acknowledgement: Michael Ramirez for the editorial cartoon

EAT THE RICH!

If you don't know.....now you know.

Walter Williams: Up From the Projects

Very enlightening video with Libertarian, Walter Williams. His views on Affirmative Action, Civil Rights Law, the Presidency of Barack Obama and other interesting subjects. One of my many heroes.

Saudi Arabia Running Out of Oil! Banks Deceiving Clients!

State of the Union: The Conservative Response

Saving Social Security with Personal Retirement Accounts

PSAs have been given a bad rap in the last few years based on fear and desires to retain political power. It's high time to have a reasonable debate on the issue.

HAPPY NEW YEAR!! Same "new" political drama

I'm somewhat back to my posting abilities. In the meantime, I have a new video up.

Fox News Viewers Are Misinformed Study, The Critique

BRILLIANTLY DONE!

Being a Haitian American pt2 (with Haitian Mom)

A light post, I felt I had to represent the culture that made me the man I am today. Enjoy!

PC Issues, Still Working it out

I'm trying to avoid this, but I may need to purchase a new PC.  Here's what's going on:

• Purchased this PC 5+ years ago and the Hard drive went kaput two weeks ago
• I ordered a new hard drive and RAM card last week that just came in today
• Installed that hardware, loaded windows with a generic boot disk
• Found that I don't have my Windows XP product key (from 5 years ago)
• Microsoft Customer Service pretty much tells me I'm out of luck without the original boot disk
• I have 30 days to find a copy of XP with the code
• The audio/video driver install disks are missing too, so I have no sound at all

So basically, I have 30 days to post while I scramble trying to find the things I need to get my PC back to 100%  Any suggestions to get me there would be greatly appreciated

Obama, Democrats, and Tax Extension Drama

Yup, It's me covering the recent events...

Obama Gets Busted on Mythbusters!

Here's where ReasonTV got their sources

Paul Ryan at Fiscal Commission

Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, ...

Via Ed Morrissey @Hotair.com:

Think of it as a Cash for Clunkers economic plan on a larger scale. The intention is to fool people into spending money in order to give the illusion of growth, and have that illusion somehow become reality through a process best known as FM; the M stands for “magic,” and you can guess what the F means. The problem is that the interventions run out of steam quickly without addressing the actual issues of income and asset value that drives organic consumer spending. Instead of increasing the size of the pie, we just cut it in different shapes.
The policies implemented in the early 1980s, in contrast, focused on generating growth in investment and income by reducing the government’s role in the economy and their bite out of it. That approach succeeded in long-term growth and prosperity by increasing the size of the pie. Critics scoff at this as “trickle-down economics,” but as the last two years showed, the Reagan approach worked while Keynesian Obamanomics has mainly generated nothing but short-term gimmicks and long-term stagnation

What We Believe, Part 7: American Exceptionalism

America's unique. Here's why:

Covering the terror behind TSA Travel

What We Believe, Part 6: Immigration

The US has no real ethnicity, no unique language to unify us. What unifies this nation is the rule of law. Our nation is conceptually founded on the principle that a free people can set its own laws and those who wish to live free agree to abide by them. Laws that don’t work can be repealed or replaced through the open processes of representative government, and in some cases direct democracy (referendums, in some states). Those who break the laws of a free people should be subject to prosecution — and those who break the law of a free nation in order to gain entry into it should not profit from that lawbreaking.

Thus, illegal immigration and tolerance for it insults those who legally migrate to the US, a process almost everyone supports. It also insults the rule of law to offer those lawbreakers amnesty, especially a second time. Besides, securing the border is one of the few legitimate duties that the federal government has under the Constitution, and perhaps it should focus on doing that right before arrogating other authorities and jurisdictions to itself.

What We Believe, Part 5: Gun Rights

Bill addresses the plague of gun-related homicides found in the US by pointing out that the epicenters of such plagues rarely coincide with higher densities of legal gun ownership, which means guns are a secondary issue and not the primary cause. It’s impossible to encapsulate Bill’s argument in anything less than the efficient manner in which he does so in this video:

3 Reasons This Election Didn't Change A Thing

Sorry, but that's reality.  Let's not forget that it's lame duck season in Washington. It's up to the NEW Congress and the Senate in January to change this outcome.