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alstry (36.17)

Blog #101...Time to Double Taxes!!!

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May 29, 2009 – Comments (31)

Our President walks into a job where revenues to his company drop about 50% the day he enters in the door.  Not only did revenues drop, but the previous administration left him with piles of debt that needs to be serviced.  In addition, tax base from which the previous administration received piles of Ponzi $$$ is now much smaller while the expenses this President faces is much higher due to rising interest expenses, more unemployed and an aging population.

NEVER has an American President faced a 50% revenue drop in one year!!!!!!!!

My friends the math is simple...cut expenses in half which will place millions on the streets and shut down thousands of health care facilities just to cover record debt obligations, or increase revenues on the backs of a shrinking taxpayer base.

Just to MAINTAIN record deficits....our President MUST double everyone's taxes simply to avoid a bond dislocation taking interest rates into double digits and beyond.  That is right, if taxes aren't doubled....it is very likely interest rates will more than double making a deep deep hole even deeper.

That is right kids....just to maintain record deficits we must double the current revenue stream......and expenses are going to skyrocket as more lose their jobs and the population ages.....so soon taxes will need to be tripled as the tax base shrinks further or there will be no money to keep the door open.

Remember, you are considered Zombulated when every dime of your discretionary income goes to taxes or you run out of savings......mathematically this will happen to all of us under the current policy.

Prepare for Zombulation!!!!!!!  Welcome to Alstrynomics #101....see what happens when a bunch of really smart guys spend your money.......you get Zombulated and don't even know it;)

 

31 Comments – Post Your Own

#1) On May 29, 2009 at 9:33 AM, jesusfreakinco (28.98) wrote:

Al,

I hear a bit of Democratic sympathy for Obama in your messges.  True, he inherited a mess, but he is perpetutating the problems and increasing spending massively.  He could have let the banks fail just like he is forcing Chrysler and GM bondholders to take pennies on the dollar. 

Being a lawyer, I am sure you can see the horror of our Fed govt re-writing law across the board.  What say you?

Bond Vigilantes Confront Obama as Housing Falters

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6eMpGVUDeeE&refer=home

Apparently the market doesn't like the Obama spending plan...  Nor does most of informed America.

JFC

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#2) On May 29, 2009 at 9:40 AM, ralphmachio (26.66) wrote:

O'bama ended up our current figure head by a process I call political jujitsu.  In political jujitsu, there is a play going on, Broadway style. You are made to hate the characters so much, you demand a change, anything, just leaning the opposite direction. 

With political jujitsu, as with martial jujitsu, compounding moves are key to putting your opponent in a compromising situation. First, we'll give you a wimp, who doesn't finish what he starts, because he knows there's more money to be made if the whole thing has to be done all over. Then we get a lefty, saxaphone player, weasil and we all know where that took our pathetic conservative constituency. W. Well, there's only so much the pseudo intellectuals can stand getting screwed so blatently, and after a double dose of W, the were ready for anything, as long as it wasn't W, or someone who wanted to cut them off from their supply, Ron Paul. Ron paul was just too real for the media indoctrinated turkeys! 

When O'bama was elected, I felt happy. Not because i liked the man, mind you. It was because some of the dumbest people in America would be sad at one time! 

We forget that elections are fraudulent. We forget that we didn't believe the results when the guy we didn't like got 'elected', but we do when the guy we do like gets in.

I wanted a change too, except I was hoping for less of a superficial fix. Whatever cometh, it is the product of our pretending that our government is what we all know in our hearts to be false.  

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#3) On May 29, 2009 at 9:42 AM, galtline (33.06) wrote:

It saddens me that Roubini isn't a part of informed America. 

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#4) On May 29, 2009 at 9:44 AM, alstry (36.17) wrote:

JFC,

Obama's spending plan is spending about the same as Bush.....but with much less revenues coming in......

I hear what you say...but what is the solution....there are only two ways to go....

cut expenses or raise taxes.....with the amount of debt accumulated in the past eight years.....cutting expenses will result in millions being thrown on the street since a huge part of the budget is simply entitlements and interest payments....or raise taxes.....

My personal bent is conservative....tilting now toward liberatarian with a practical view towards issues.

If you run a business you must cover expenses one way or the other....USA Inc. is no difference because there is always consequences in the end...

I am amazed how Republicans simply don't want to address the debt obligations accumulated under the Bush/Pelosi administration....I can understand the Democratic view....that is their nature and at least they are consistent.......

At this point....if Obama doesn't spend....America shuts down.....what do you propose he do with half the revenues and much higher expenses???? 

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#5) On May 29, 2009 at 9:47 AM, ralphmachio (26.66) wrote:

After giving it some thought, I decided to explain that in jujitsu, the main focus is using your opponents imbalance, or momentum against him. Rather than block in the opposite direction, the force is redirected to be used against the attacker.

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#6) On May 29, 2009 at 9:53 AM, jesusfreakinco (28.98) wrote:

Al,

I agree that Bush was a big disappointment for fiscal conservatives and didn't do us any favors...

Obama should focus on spending, not bailing out Wall St.  You hit the nail on the head several times.  His bailouts of Wall St would be enough to pay off everyone's mortgage.  Interesting idea.

You are also right that this crisis isn't the same as the Depression, yet they are trying to 'fix' it with solutions that may have helped curbed the Depression.  

We agree that massive restructuring is needed.  The problem is what type of restructuring - forced restructuring by Obama's rules or by the law.  I fear our country is becoming a bit like Russia - run by thugs.  It is nice to see the 10 year rise and Bond holders revolt.  Maybe it will scare some sense into Timmy and Obama.

Still trying to figure out where to hide from this mess.  My strategy seems to be 1/3 gold/silver; 1/3 hard assets (guns, ammo, food, etc); and 1/3 foreign currencies (CDs from Everbank) - any thoughts?

JFC

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#7) On May 29, 2009 at 9:56 AM, alstry (36.17) wrote:

Again...few want to address the issue.

Half the revenues and much higher expenses!!!!!!

My guess is the next thing to go is dividends due to higher taxes....we are already destroying bonds thus dividends seems like a logical next step.

Our country needs money and needs to be supported....and as citizens it is our duty to defend it....now the question is how???

 

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#8) On May 29, 2009 at 10:10 AM, snakeyd (< 20) wrote:

Many people are working 32-35 hour work weeks and not counted in the unemployed.  To offset the cut in hours, many have changed to a higher witholding on their W-4. 

One reason for decreased tax revenue.

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#9) On May 29, 2009 at 10:14 AM, alstry (36.17) wrote:

How about a 90% drop in S&P earnings and hundreds of thousands of high income earners who have seem dramatic decreases in income????

Again....our country is OUT OF MONEY....our President told us and the numbers reflect it.......our President inherited this mess...he NEEDS his citizens HELP!!!!!!!  NOW!!!!!

And few appear to want to take responsibility......and you know what happens to those that stick their heads in the sand?????

That is right....it is ripe for getting kicked!!!!!!!

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#10) On May 29, 2009 at 10:15 AM, jesusfreakinco (28.98) wrote:

Well, it is obvious that spending has to be limited as well.  I have to tighten the belt in my house when my income is less, why not the Fed.   However, Obama wants to increase Federal health care costs through some form of nationalization.  Now, I know, Bush didn't do us any favors with his massive expansion of Medicare.  However, this doesn't mean Obama has to follow suit (excpept for the fact that he promised this to his sheeple voters...)

JFC

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#11) On May 29, 2009 at 10:17 AM, alstry (36.17) wrote:

JFC,

The Pardox of Thrift...you spend less....the government gets less and the problem gets bigger.

Nobody wants to address the problem JFC....we are all trying to save ourselves while we are all on The Titanic.....in the end...we are all in the water....NO MATTER HOW RICH YOU ARE!!!!

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#12) On May 29, 2009 at 10:34 AM, Deepfryer (27.79) wrote:

jesusfreakinco "Apparently the market doesn't like the Obama spending plan...  Nor does most of informed America."

I'm not sure what reality you're living in, but Obama's approval ratings are fine, and the markets seem to love his policies.

I would say that most informed Americans actually have a very positive impression of what Obama has done so far. It's not easy to fix Bush's mess, but Obama has done as well as any human being could reasonably be expected to do.

Just today it was reported that consumer sentiment has reached its highest level since last September. I'm not saying this is a huge deal, but it certainly contradicts what you were saying about the perception of the markets and the American public:  http://finance.yahoo.com/news/US-consumer-sentiments-rb-15381696.html

galtline "It saddens me that Roubini isn't a part of informed America."

Agreed. Roubini is one of the few people who understands what is really going on, and isn't afraid to tell it like it is. Incidentally, he has reacted very positively to many of Obama's policies... the economic stimulus in particular. In fact, while some people are complaining about Obama's spending, Roubini's only complaint was that the stimulus should've been even bigger!

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#13) On May 29, 2009 at 10:54 AM, jesusfreakinco (28.98) wrote:

Al,

The US sheeple love Obama's polices because he is going to take care of everyone, at least so they think.

I am most concerned about those that hold dollars and our bonds are thinking.  And... the 10 year bond and USD is speaking loudly - they are tired of their holdings being devalued by the current administration.  I am not saying Bush would be doing any better than Obama right now, but the fact is Obama can and does make choices on how he is responding.  He could have held Wall St to the same standard as he is the auto makers and saved us all trillions of dollars, but he is chosing not to. 

On this I guess we'll disagree.

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#14) On May 29, 2009 at 11:02 AM, alstry (36.17) wrote:

JFC 

Actually we agree...you admit we are pursuing a Zombulation policy....and I agree....what I find amazing is how few fricken se it......

Now the question is how is it going to be presented to the public...through massive tax increases, we could invade another country and take its wealth, or through spending cuts shutting down the ecnomomy???

The basic issue is our nation is OUT OF MONEY at the same time its needs are increasing........how are we going to raise it if few are willing to lend on acceptable terms???

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#15) On May 29, 2009 at 11:13 AM, Deepfryer (27.79) wrote:

Here is a recent quote from Roubini which I think sums it up very nicely:

"The good news is probably that six months ago there was a risk of a near depression, but we have seen very aggressive actions by US policymakers, and around the world. I think the policymakers finally looked into the abyss: they saw that the economy was contracting at a rate of 6 percent–plus in the US and around the world, and decided to use almost all of the weapons in their arsenals. Because of that I think that the risk of a near depression has been somewhat reduced."

I'm proud to belong to the so-called "sheeple" category... along with Roubini, Krugman, Soros, and others who support increased gov't spending. Don't worry about the national debt... we'll pay it later :-)

Cheers.

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#16) On May 29, 2009 at 11:15 AM, columbia1 wrote:

1- Why not deport 15,000,000 illegal aliens

2- Cut all Government workers, including police and firefighters, salaries and their pensions by 15%

3- Make Welfare recipients do community service

4-Reform the IRS (this might make the unemployment skyrocket with all the useless employees out of a job)

5- Turn our minimum security prisons into tent cities in the desert ( this would drastically cut the annual cost of housing non-violent offenders)

6- Open more community clinics to treat minor health care problems, saving vast sums of money keeping people out of emergency rooms

7- Open the off-shore waters of the Gulf and the West coast to oil drilling and impose a 10% tax on the oil recovered, split with the States.

8- Legalize Marijuana and impose a 50% tax (no, I don't smoke it)

9- Increase our foreign military arms sales.

10- Lower Capitol gains to 10% and Corporate taxes to 28%

 

 

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#17) On May 29, 2009 at 11:20 AM, alstry (36.17) wrote:

All a good start...but only gets you about 10% of the way there...

remember, under much higher revenues in the BUSH administration....2/3 of all govt expenses was simply entitlements and interest.....now poor Obama has to face OVER 100% of the revenues being allocated to entitlements and interest due to evaporating revenues and skyrocketing debt.

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#18) On May 29, 2009 at 11:25 AM, jesusfreakinco (28.98) wrote:

Al,

Offer some practical PREPARE comments here.  We are all waiting your excellent wisdom.  Truthfully, I have been thinking about how to best prepare my family for the inevitable - high inflation or hyperinflation that is coming down the road and could use the wisodm of my CAPS friends.  I'd sleep better...

JFC

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#19) On May 29, 2009 at 11:34 AM, columbia1 wrote:

10%, I could argue more like 20%. But even 10% is better then nothing!!!

But, Obama has no clue on how to save money, only on how to spend it, and grow Government faster then any president in history!!!

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#20) On May 29, 2009 at 11:44 AM, columbia1 wrote:

I have no sympathy for Obama, he was fully informed of the situation he was getting himself in and he thought he was going to be the Great Savior and save this nation from economic turmoil with his socialist/fascist agendas.  

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#21) On May 29, 2009 at 11:45 AM, davejh23 (< 20) wrote:

Alstry - Obama is not maintaining spending levels from the Bush administration.  He has increased spending dramatically.  Not that Bush wouldn't be pursuing the same course if he were still in office, but Obama will nearly double the national debt in his first term.  He's promised to cut the annual deficit in half in his first term...impossible. 

So, do we double and triple taxes?  Cutting entitlement spending may put millions on the street, but tripling taxes will literally put us ALL on the street.  How about phasing out Social Security, and Medicare entirely.  Leave the programs in place for those that are in, or near, retirement, but phase out benefits over time.  Most young people aren't counting on receiving a penny from Social Security anyways.  In any case, Social Security wasn't designed as a permanent program, and if it was maintained in it's original for, the current retirement age would be 80...above the average life expectancy.  As for Medicare, there is too much wasteful spending to prolong the poor quality lives of many that would have otherwise died decades earlier.  Medicare can't support a nation of obese individuals that have neglected their own health for decades.

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#22) On May 29, 2009 at 11:53 AM, alstry (36.17) wrote:

I am not asking you to have sympathy to Obama.....I am asking you to step up and help your country.

Your country is out of money and few foreigners are likely willing to lend.....what are you going to do to help???

Much of the revenues coming into Obama now are simply going to pay interest on obligations the previous Bush/Pelosi administration created.

If we cut expenses...we can't cut interest so we must cut entitlements....but even if we cut ALL entitlement payments we would still not balance the budget....

And if we cut All entitlement payments..probably 90% of all healthcare facilities in America would go bankrupt and millions would be on the streets begging.

So pick...cut expenses and become Pakistan.....or pony up and help your President. 

Soon you will be told that America has been diagnosed with an economic cancer(Alstrynomic's FU virus)......chemo is never fun!!!!!

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#23) On May 29, 2009 at 11:54 AM, alstry (36.17) wrote:

dave...

the deficit doubled because primarily the revenues are cut in half....how can you blame Obama for walking into a Depression(10% decline in GDP).

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#24) On May 29, 2009 at 12:07 PM, columbia1 wrote:

Alstry, I would have no problems stepping up and helping out our country if they would incorporate a viable economic plan. Following Keynesianism economic strategies led us here, and the continuation of these policies will lead to a total economic collapse. Obama has only accelerated the process.

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#25) On May 29, 2009 at 12:08 PM, Deepfryer (27.79) wrote:

Stop worrying so much about the deficit! And stop worrying about some inflation that might happen in the future! Why are people worring about such relatively minor problems, when we are currently in the worst economic crisis since the Great Depression?! Worry about the big problem first! We can deal with these other issues when the time arises. Right now I don't give a rat's ass if the budget is balanced or not, and neither should you.

And the idea of doubling taxes is obviously ridiculous. Revenues will return to a more healthly level in a year or two, once we get out of this mess.

Here is the basic idea, put a lot more eloquently than I could ever explain it:

"The interesting thing is that what needs to be done in the short term is almost exactly the opposite of what needs to be done in the long term. Obviously the problem was excessive leverage. But when you have a collapse of credit there's only one source of credit that is still credible, and that's the state: the Federal Reserve and the Treasury. Then you have actually to inject a lot more leverage and money into the economy; you have to print money as fast as you can, expand the balance sheet of the Federal Reserve, increase the national debt. And that is, in fact, what has been done, which is the right thing to do. But then once this policy is successful, you have to rein in the money supply as fast as you can."

-George Soros

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#26) On May 29, 2009 at 12:08 PM, davejh23 (< 20) wrote:

Alstry - How can you not blame Obama for spending several times what we've spent on the war in Iraq to date in a matter of months?  Obama was a huge supporter of deregulation and reckless lending that led to our housing boom and bust.  I'm not a huge Bush fan, but it's interesting that in 2001 Bush was pushing for more regulation for Fannie and Freddie, but those GSE multiplied in size rapidly in the years after Bush's plan was mocked.  This is one thing that Bush got right, and he was ridiculed for it.  This is the recession of Frank and Dodd...they should be in prison.

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#27) On May 29, 2009 at 12:23 PM, alstry (36.17) wrote:

dave...

What Obama has spent in the past few months is simply a contiinuation of Fed Policy from the past administration.

The issue is not an Obama issue...it is an American issue.

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#28) On May 29, 2009 at 12:33 PM, davejh23 (< 20) wrote:

If it's not an Obama issue, then it's not a Bush/Pelosi issue...it's an American issue.  I really hope this isn't true, but I believe America's best days are long past.  As a nation, we don't stand for anything.  The "American dream" is a thing of the past, because this involved hard-work, and as a nation, we don't believe in hard-work...we believe in entitlement...AND, we don't have anyone in government that's interested in helping.  We may have some freshman congressmen that want to make a difference, but their spirits are soon crushed by the lifetime politicians that do what they do for selfish reasons, and not to serve the American people.  How can a corrupt government lead us out of a problem that was created by their design?

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#29) On May 29, 2009 at 3:17 PM, briyan (31.54) wrote:

The United States has ridden a wave of false prosperity for far too long.  You can't simply blame on Bush, Pelosi, Obama, or whoever else.  All government policymakers and the voters who have supported those policymakers for the last few generations are to blame.  

We have a lot of negative forces that have built up in this country over a very long period, and while it's trendy to jump on a partisan bandwagon and blame a major political party or president for our problems, the reality is that nobody in government has taken steps to address the financial woes that have been brewing for several decades.  Our leaders have all either been "head in the sand" or explicitly made things worse, for a very long time.

The policies that could actually help us break the cycle of corruption and false Ponzi prosperity are too politically unpopular for any major officials to embrace ... without radical changes we will just continue along the same path with a few cosmetic blips. As a people, we have lost our sense of individuality and true sense of freedom, and most of us will just get wrapped up in some self-righteous trumpeting about love/hate for the current President, when the true extent of the change is about the same as getting a new logo for McDonald's.

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#30) On May 29, 2009 at 3:26 PM, alstry (36.17) wrote:

briyan...alstry couldn't have said it any better.

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#31) On May 29, 2009 at 3:31 PM, VintageCat (< 20) wrote:

One person's thoughts:

I suppose it would behoove us as individuals to think and act more in terms of duty, responsibility and obligation with regards to our choices for ourselves, our families and our fellow citizens rather than rights and entitlements. That would indeed take a major cultural shift.  

The benefits of operating under that paradigm as a whole would be incalculable but buck passing, responsibility shifting, "feel good now" to get through the day with whatever it takes and trying to get by with as little effort as possible seems to be the current American modus operandi with some notable exceptions.

I suspect like davejh23 that we are culturally doomed which is the root cause of all of our present evils.

 

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