CREDITS, SUBSIDIARIES, GRANTS....and other follies
The title comes from the approach our government believes is the best way to ensure there is a robust
economy. There is a collective agreement in the public sector and academia only government involvement
can effectively respond to out of the ordinary economic downturns, never believing much of its 'tinkering'
provides little, if any, benefit. The tools frequently used are Tax Credits, Subsidiaries and Grants, ripe for the
picking from the Federal money tree, ready to be shaken.
To Begin.....
Now, more than at any time since the Great Depression, the American people are seeing the ineptitude
of the people they elected to serve their interests.
Unfortunately, too many Americans will not recognize this; they have been conditioned to believe what
govt is doing is the right approach to strengthen an anemic economy. To them government knows what
it is doing. They fail to recognize that whatever govt does is calculating, controlling and politically self-
serving. Yet, they continue to believe.
This growing number of Americans, thanks to an equally anemic education system, believe it is not the
efforts of the individual, working in the private sector, that generates jobs and grows an economy. Most
may not admit it, but they believe dependency on govt is preferable to having to take responsibility for
their own well-being.
They further believe only through coercion, intervention, regulation and legislation, can govt influence
the economy. Unfortunately, most often this "influence" has a negative effect, limiting their personal
freedom and liberty while rarely providing the intended benefits.
Examples of govt failures are all around us; every tool has been tried, every tool but the only one
proven and guaranteed to work.....limited involvement in private enterprise, allowing free markets to
work in our capitalist system as intended and proven for the past seventy years.
We have seen the "Rube Goldberg" approach so often it would be laughable if it wasn't near criminal.
We saw government raise the debt limit in order to "borrow" over $1 trillion under the guise of growing
the economy by creating jobs, only to see this money given to select groups (unions) and industries (green
and US auto makers) while leaving out 85% of the American workers and 95% of US industries.
If this formula worked all Americans would have applauded. But it has not. Unemployment is higher than
it was two years ago and the American have showed their displeasure from coast to coast in poll after poll.
We saw government determine the way to get US car sales up was to provide tax credits, by increasing our
debt, in a program, "Cash for Clunkers", with a side benefit of having more efficient cars on the road. Well,
that did not happen, people bought the cars THEY wanted; yet not appreciably increase the number of cars
sold, and failed to generate revenue to offset the cost.
We saw government offer credits, essentially reducing tax revenue, to people to help them purchase a home.
The results were only a modest improvement, and foreclosures continued high over the past eighteen months.
We saw government send money to strengthen the banks, yet even after this cash infusion, nearly 800 more
banks are failing this year, and could double the number of failures in 2009.
We saw the government introduce a new term "saved jobs", an unmeasurable or supportable statistic, to bolster
public sector jobs, primarily teachers, without regard for the burden on the taxpayers who will have to pick up
the cost when govt funding ends next year.
We saw government continue to attack two of America's major revenue generators, the oil and coal industries.
Both have been hamstrung by an Administration and Congress who continue to squash their efforts to grow and
create new jobs.
Instead government preferred to direct their efforts to pie-in-the-sky "green jobs" that will not provide benefits
or the projected jobs in the foreseeable future, leaving our country 70% dependent on foreign oil, and leaving
these two vital industries grossly underemployed.
We saw the government extend unemployment benefits as its efforts failed to create the projected jobs, further
increasing the national debt.
We saw government push through health care legislation, using political slight of hand, against the will of the
majority of the American people and most in the business of health care, a costly burden which will weigh heavily
on the shoulders of our children and theirs.
Even today, government does not "get it"...new proposals include more borrowing, again raising the government
credit limit, to create jobs with more credits (behavior compliance required), subsidiaries (money for products
not in demand) and grants (the vital blood stream of universities and research institutes).
The big number most neglect to mention, but all important, is 2.5%...this is the magic GDP growth number, currently
at 1.6%. (Note: It was over 4% in fourth quarter 2009). Unless we get above 2.5% , stay there or improve on it, no
meaningful job growth will materialize, and the only source of Federal revenue, taxes from the private sector will
not occur.
Many businesses are flush with cash, as the recession caused them to make deep cuts to remain profitable. But they
are deeply concerned and reluctant to invest until they know the next steps govt will take. If they have no idea what
their costs will be with increased burden of health care and higher taxes on the horizon to spend now would be foolhardy.
The Administration and Congress needs to regain the confidence of the private sector; not with credits and other two-cute-
by-half measures, but with assurances businesses will be able to move forward without fearing the heavy burden of more
govt. involvement.
Tax rates have a direct effect on every worker and business, unlike credits, which are intended to drive behavior. When
rates are cut to a reasonable level more money remains in the hands of citizens and business, the only proven engine
that can stimulate the economy.
By holding existing individual and business tax rates and the capital gains at their current level, and relaxing restrictive
measures on the energy sector our economic engine will begin to move forward rather than remain stalled.
Is it too late for the political class to recognize this? Let's hope these old dogs can learn one old trick.
Happy Labor Day....
Tony Bruno
Cary, NC
The title comes from the approach our government believes is the best way to ensure there is a robust
economy. There is a collective agreement in the public sector and academia only government involvement
can effectively respond to out of the ordinary economic downturns, never believing much of its 'tinkering'
provides little, if any, benefit. The tools frequently used are Tax Credits, Subsidiaries and Grants, ripe for the
picking from the Federal money tree, ready to be shaken.
To Begin.....
Now, more than at any time since the Great Depression, the American people are seeing the ineptitude
of the people they elected to serve their interests.
Unfortunately, too many Americans will not recognize this; they have been conditioned to believe what
govt is doing is the right approach to strengthen an anemic economy. To them government knows what
it is doing. They fail to recognize that whatever govt does is calculating, controlling and politically self-
serving. Yet, they continue to believe.
This growing number of Americans, thanks to an equally anemic education system, believe it is not the
efforts of the individual, working in the private sector, that generates jobs and grows an economy. Most
may not admit it, but they believe dependency on govt is preferable to having to take responsibility for
their own well-being.
They further believe only through coercion, intervention, regulation and legislation, can govt influence
the economy. Unfortunately, most often this "influence" has a negative effect, limiting their personal
freedom and liberty while rarely providing the intended benefits.
Examples of govt failures are all around us; every tool has been tried, every tool but the only one
proven and guaranteed to work.....limited involvement in private enterprise, allowing free markets to
work in our capitalist system as intended and proven for the past seventy years.
We have seen the "Rube Goldberg" approach so often it would be laughable if it wasn't near criminal.
We saw government raise the debt limit in order to "borrow" over $1 trillion under the guise of growing
the economy by creating jobs, only to see this money given to select groups (unions) and industries (green
and US auto makers) while leaving out 85% of the American workers and 95% of US industries.
If this formula worked all Americans would have applauded. But it has not. Unemployment is higher than
it was two years ago and the American have showed their displeasure from coast to coast in poll after poll.
We saw government determine the way to get US car sales up was to provide tax credits, by increasing our
debt, in a program, "Cash for Clunkers", with a side benefit of having more efficient cars on the road. Well,
that did not happen, people bought the cars THEY wanted; yet not appreciably increase the number of cars
sold, and failed to generate revenue to offset the cost.
We saw government offer credits, essentially reducing tax revenue, to people to help them purchase a home.
The results were only a modest improvement, and foreclosures continued high over the past eighteen months.
We saw government send money to strengthen the banks, yet even after this cash infusion, nearly 800 more
banks are failing this year, and could double the number of failures in 2009.
We saw the government introduce a new term "saved jobs", an unmeasurable or supportable statistic, to bolster
public sector jobs, primarily teachers, without regard for the burden on the taxpayers who will have to pick up
the cost when govt funding ends next year.
We saw government continue to attack two of America's major revenue generators, the oil and coal industries.
Both have been hamstrung by an Administration and Congress who continue to squash their efforts to grow and
create new jobs.
Instead government preferred to direct their efforts to pie-in-the-sky "green jobs" that will not provide benefits
or the projected jobs in the foreseeable future, leaving our country 70% dependent on foreign oil, and leaving
these two vital industries grossly underemployed.
We saw the government extend unemployment benefits as its efforts failed to create the projected jobs, further
increasing the national debt.
We saw government push through health care legislation, using political slight of hand, against the will of the
majority of the American people and most in the business of health care, a costly burden which will weigh heavily
on the shoulders of our children and theirs.
Even today, government does not "get it"...new proposals include more borrowing, again raising the government
credit limit, to create jobs with more credits (behavior compliance required), subsidiaries (money for products
not in demand) and grants (the vital blood stream of universities and research institutes).
The big number most neglect to mention, but all important, is 2.5%...this is the magic GDP growth number, currently
at 1.6%. (Note: It was over 4% in fourth quarter 2009). Unless we get above 2.5% , stay there or improve on it, no
meaningful job growth will materialize, and the only source of Federal revenue, taxes from the private sector will
not occur.
Many businesses are flush with cash, as the recession caused them to make deep cuts to remain profitable. But they
are deeply concerned and reluctant to invest until they know the next steps govt will take. If they have no idea what
their costs will be with increased burden of health care and higher taxes on the horizon to spend now would be foolhardy.
The Administration and Congress needs to regain the confidence of the private sector; not with credits and other two-cute-
by-half measures, but with assurances businesses will be able to move forward without fearing the heavy burden of more
govt. involvement.
Tax rates have a direct effect on every worker and business, unlike credits, which are intended to drive behavior. When
rates are cut to a reasonable level more money remains in the hands of citizens and business, the only proven engine
that can stimulate the economy.
By holding existing individual and business tax rates and the capital gains at their current level, and relaxing restrictive
measures on the energy sector our economic engine will begin to move forward rather than remain stalled.
Is it too late for the political class to recognize this? Let's hope these old dogs can learn one old trick.
Happy Labor Day....
Tony Bruno
Cary, NC
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