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Kelly McParland: At provincial level, NDP governments still mean higher taxes

Kelly McParland — Wed, 17 Apr 2013 15:40:32 +0000

Manitoba released its provincial budget on Tuesday, within which lurked a tax increase that could prove problematic for the NDP government’s federal brethren.

Finance Minister Stan Struthers said the provincial sales tax will rise to 8% from 7%. That will produce $277 million, which he says will be dedicated entirely to infrastructure spending, and “capital investments” like hospitals and hockey rinks. It will cost an extra $300 a year per household, he reckons.

Manitoba already dedicated one percentage point of the PST to infrastructure; now that will be doubled. Much of the money will go to projects intended to reduce damage from flooding: the province expects its third major flood in five years and needs to add to its existing defences. Struthers noted that Manitoba was eager to take advantage of a program, introduced by the federal Tories, to match infrastructure expenditures. He also promised the increase would be reversed … in 10 years.

Both the Manitoba and B.C. plans may be laudable enough, but their willingness to resort to tax increases sets a difficult precedent for the federal NDP.

The Manitoba move comes just a few days after B.C.’s NDP, which everyone except the B.C. Liberal party expects to form a government next month, revealed that it, too, has plans to increase taxes. The NDP finance critic, Bruce Ralston, said an NDP government would increase corporate taxes, reinstate the capital tax for financial institutions, raise personal income taxes for high earners and expand the carbon tax.

“We’re being upfront about the way in which we are going to pay for what we regard as important public programs,” Ralston said. The party hasn’t said specifically how it will spend the money, but has already promised to boost subsidies to the B.C. film industry.

Both the Manitoba and B.C. plans may be laudable enough, but their willingness to resort to tax increases sets a difficult precedent for the federal NDP. Federal leader Thomas Mulcair has been trying to convince Canadians his is not the old tax-and-spend NDP; these are the new New Democrats, prudent, fiscally responsible and worthy of being trusted around the national treasury. Yet on a recent trip to the U.S., Mr. Mulcair told Bloomberg News he would raise corporate taxes, claiming the main beneficiaries “are the oil companies and the banks who didn’t ask for it and don’t need it.” He’d use the money for social programs and to return the official retirement age to 65.

He did pledge not to raise either the sales taxes or taxes on high-income earners, claiming that sales taxes hurt the poor, and marginal rates are already too high. That argument evidently failed to impress either of his NDP colleagues in B.C. or Manitoba, however. Ontario’s NDP leader, Andrea Horwath, also squeezed a “tax the rich” promise out of the province’s minority Liberals in return for supporting the budget. Given the evidence, Mr. Mulcair might have trouble convincing Canadians an NDP government wouldn’t be a high-tax government, especially in provinces where NDP governments have done the opposite.

It would also be surprising if the federal Tories failed to point this out, come campaign time.

National Post

Peter Schiff: The Coming Economic Collapse -- Videos

Raymond Thomas Pronk — Wed, 17 Apr 2013 00:46:35 +0000

Peter Schiff, Europe is the Warm Up, but America is the Main Event

Peter Schiff – Get Out Now Get Out Of The Dollar

Lou Dobbs versus Peter Schiff

Doug Casey interviews Peter Schiff

Cyprus Is Small, But The Problem Is Enormous

Coming Economic Collapse – Peter Schiff RT America

Peter Schiff Debates Doug Henwood on stimulus deficit spending

Economic Collapse Not Only Possible But IMMINENT w Peter Schiff…

CNBC’s Joe Kernen Talks About Peter Schiff? (Pompous Blowhard, Bad Jacket, Bad Market Calls…)

Peter Schiff – The Fed Unspun: The Other Side of the Story

Schiff: 2/3 of America to Lose Everything Because of This Crisis

A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

That’s according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

“I think we are heading for a worse economic crisis than we had in 2007,” Schiff said. “You’re going to have a collapse in the dollar…a huge spike in interest rates… and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it.”

Schiff says that, despite “phony” signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed’s never ending money printing.

Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That’s about $85 billion per month against a budget deficit that is about the same level.

According to Schiff, these numbers are unsustainable. And the Fed has no credible “exit strategy.”

Eventually interest rates will rise… and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

“The crisis is imminent,” Schiff said. ”I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”

“We’re broke, Schiff added. ”We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”

Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.

“It’s not that the stock market is gaining value… it’s that our money is losing value. And so if you have a debased currency… a devalued currency, the price of everything goes up. Stocks are no exception,” he said.

“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

noted economist, Schiff has been a fierce critic of the Fed and its policies for years. And his warnings have proven to be prophetic.

In August 2006, when the Dow was hitting new highs nearly every day, Schiff said in an interview: “The United States is like the Titanic, and I’m here with the lifeboat trying to get people to leave the ship… I see a real financial crisis coming for the United States.”

Just over a year later, the meltdown that became the Great Recession began, just as Schiff predicted.

He also predicted the subprime mortgage bubble burst, nearly a year before the real estate market fully crashed.

His recent warnings, however, have been even more alarming. Will they also prove to be true?

In his most recent book, “The Real Crash” How to Save Yourself and Your Country“, Schiff writes that
when the “real crash” comes,” it will be worse than the Great Depression.

Unemployment will skyrocket, credit will dry up, and worse, the dollar will collapse completely, “wiping out all savings and sending consumer prices into the stratosphere.”

http://moneymorning.com/ob-article/schiff-us-will-win-currency-war.php?code=3243#.UW3kh6OPBBk

More on Taxes

mlclemen — Tue, 16 Apr 2013 22:04:35 +0000

VITA = tax simplicity = tax reform

National Community Tax Coalition — Tue, 16 Apr 2013 15:38:39 +0000

Strengthening VITA should be among the first orders of business for any federal tax reforms prioritizing “simplicity,” according to comments NCTC submitted to Congress on Tax Day.

The working families who would benefit from improvements in Volunteer Income Tax Assistance also need policymakers to bolster targeted tax credits as well as important savings policies, we added.

Our suggestions to the U.S. House Ways & Means Committee came in response to the call for information and suggestions regarding tax reforms. Both Ways & Means and the Senate Finance Committee have been examining various options. Particularly with the latter planning to zero-in on talk of family tax credits this week, we’ve also passed-along our thoughts to Senators.

As is well-documented, the overcomplicated tax code certainly can and should be simplified. But as we’ve blogged earlier, it would be dangerous to conflate and flatten income tax rates too aggressively in the name of “simplicity,” as that could harm progressivity and – specifically – low-income families. But there are some other options Congress should consider.

VITA’s well-trained and certified volunteers provide struggling families with free help in navigating their way through the tax code – yet its services are far too limited, and need strengthening.

“This is the kind of assistance that will long remain vitally important to many working families, regardless of the success of any other efforts toward making our tax system easier to understand,” we wrote to Congress. “The fact is that many households will still want some help navigating an often dizzying array of tax forms, schedules, filing requirements, definitions, etc. For many, such help is as necessary as it is desirable – as their other options include commercial tax preparers who often charge hundreds of dollars in fees.”

NCTC isn’t alone in making this pitch, either.

“VITA [programs] help consumers keep their maximum refund – dollars that can then be saved or spent,” the Center for American Progress wrote in its own comments, echoing earlier calls CAP has made for boosting VITA.

NCTC’s comments also called for making permanent the American Opportunity Tax Credit and some currently temporary improvements in the Earned Income Tax Credit and Child Tax Credit, as well as some new improvements.

Our suggestions reflect the three basic principles for tax reform we adopted last year: greater tax-code fairness, adequacy, and simplicity.

Review of Who Stole the American Dream by Hedrick Smith

michaelharrington — Tue, 16 Apr 2013 03:14:42 +0000

Posted at Amazon:

I wanted to give this book at least 2 stars in respect for Mr. Smith’s journalistic skills and his previous fine work with The Russians. However, this exposition is so flawed and wrong in its diagnosis of the problems and prescriptions that I can barely give it one star. It also saddens me to see 109 five-star reviews – after reading a few I’m left wondering how readers can be so easily led by just-so stories by our media elites. Or is this analysis so ideological that readers just choose to believe what they want to believe and disregard any counter-factual evidence? That is truly a lost, if not stolen, American dream.

First, Smith gives a good journalistic rundown of select history, as we would expect. His selected comparison is the post-war period referred to as the Great Compression. But he fails to see that this virtuous moment in our history was more a product of historical events than public policy. The US was the sole developed nation with an intact industrial base, while all of Europe, Russia and Asia lay in ruins. So, employable skilled labor was in short supply and American workers commanded a greater share of the returns relative to capital. The world was forced to buy our goods, even if we had to extend them the credit. This would not last and came undone in the late 60s. The 1970s was a period of stagnation when wages and corporate profits were similarly depressed by energy spikes and misguided economic policies.

Smith finds his villain in Justice Lewis Powell, who motivated a cabal of rapacious corporate raiders and turn-around artists like Chainsaw Al Dunlap and Neutron Jack Welch to take over American business. Please. The battle for corporate control was a response to ineffectual management that fed fat cat perks in the corporate boardroom while depriving other stakeholders of value. Stagnating stock prices reflected this and provided the opportunity for people like Dunlap and Welch to create value. Yes, and sometimes this depressed value was due to the mismanagement of labor inputs, so the remedy was to increase profits by reducing costs. This is how competitive business becomes efficient. If it hadn’t been Al and Jack, it would have been someone else. The business of America is wealth creation, not job creation. If we want to deal with the problems of winner-take-all globalization, we’d better understand that first.

Thus, Mr. Smith’s basic premise is not only flawed, it’s wrong. What caused the shift in power between capital and labor was the 30-year credit bubble (accommodated by a fiat dollar) that drove down interest on debt (with its tax subsidy), permitting the over-leveraging of capital ownership shares. Combined with the liberalization of developing nations in East, Southeast and South Asia, the world supply of labor exploded, driving down wage incomes across the board. Globalization powered by technology, transportation and communications, has delivered a new world that is so different from the post-war America Mr. Smith craves as to make the comparison ludicrous. We’re not going back to Kansas, Dorothy, no matter what the Wizards promise us.

Mr. Smith’s remedies are equally ill conceived, as we might expect from false premises. He’d like us to imitate Germany’s corporatist industrial policies, and in this he seems to share the same delusions as our current Democratic administration. Corporatism is a form of economic feudalism where control over economics and politics gravitates up to the national level with grand compromises made among peak labor unions, business roundtables, and government bureaucrats. Guess who wins and who loses? Elites win big while average Joe is told to be satisfied with a promised job, retirement, healthcare and three squares a day. This works currently in Germany because of several factors specific to Germany: a homogenous culture and labor force, an export-dependent economy, and a population of 80 million – none of which apply to the U.S. The long-term results of this policy are also less sanguine: the fertility rate of Germany is 1.36, well below the replacement rate of 2.1. There are more deaths than births and immigration does not make up the difference. In other words, like its European neighbors, the nation of Germany is dying a slow death. Hardly a model we would wish to follow. One must ask why, if life is so good, Europeans refuse to invest in the future by having children? Obviously, the developing nations that are liberating their societies see a much brighter future.

One more point that piqued my attention was Smith’s focus on public-private partnerships to recreate a past that he only imagines. This idea is a real buzzword for people who want to believe in the myth of a third way between socialism and capitalism. But does anybody really understand what the terms of these partnerships yield? Private interests use their connections in government to receive taxpayer subsidies to make investments in which they capture the excess returns. The risks of loss are borne by taxpayers, but these taxpayers never receive any direct return from success. This is a pure form of “heads we win, tails you lose” cronyism perpetrated by the elites in business and government. If taxpayers underwrite the risks, why don’t they have residual claimancy on any success? At heart, private-public partnerships are immoral because they violate the golden rule of moral capitalism: she who takes the risk, receives the gain or suffers the loss. (If you wonder about the morality of this rule, consult the Bible or the philosophy of law that defends the innocent from the transgressions of the powerful.)

This gets to the issue of true prescriptions to correct the failures of crony (not free market) capitalism that pervades our world. A world that advances freedom, and that includes the freedom to trade, must promote and defend the basic rights of ownership that undergird not only capitalism, but human nature itself. A worker is little more than an input cost, but ownership represents the residual claimancy on productive effort after all input costs have been paid. The success of capitalist society is measured by the creation of excess wealth associated with productive activities, in other words, profits. The problem is that 20th century industrial policy has associated the distribution of economic success through employment alone. In other words, most citizens only participate in the system as a labor cost. Thinking outside this “job creation” box calls for a wider distribution of the risks and returns to the ownership of the resources used in economic production, not least of which is financial capital. How does Mr. Smith really think all those CEOs got so rich? They all had stock options! Was there theft? Yes, from other stakeholders, principally shareholders. Unions should become the agents representing diversified ownership in American business for workers, and by association for all Americans. That’s a job that would get them on the right side of history.

The way Mr. Smith (and others of his persuasion) would lead us would be the ruin of the greatest experiment in freedom the world has ever known. That’s sounds more like a nightmare than a dream. Please folks, wake up. Do it for the children.

Bill Bonner and Addison Wiggin -- A Financial Reckoning Day Fallout: Surviving Today's Global Depression -- Videos

Raymond Thomas Pronk — Tue, 16 Apr 2013 02:14:04 +0000

An Empire of Debt Leading to a “Crack-up” in the Global Monetary System w/Bill Bonner!

Bill Bonner ZURICH.MINDS INTERVIEW

Bill Bonner: Uncharted Territory -

Emerging Market Real Estate, The Most Promising Asset Class: An Interview with Bill Bonner

Bill Bonner at The Equitymaster Investment Summit 2010

Bill Bonner: Enterprise Under Attack Part 1 – July 24

Bill Bonner: Enterprise Under Attack Part 2 – July 24

Bill Bonner: Enterprise Under Attack Part 3 – July 24

Addison Wiggin / Financial Reckoning Day Fallout on FOX Business News

Addison Wiggin on an Empire of Debt and the Mother of all Bubbles (Part 1)

Addison Wiggin on an Empire of Debt and the Mother of all Bubbles (Part 2)

Newsflash: the Tea Party is racist!

William Northup — Mon, 15 Apr 2013 23:00:37 +0000

A totally not racist comparison of Obama to a monkey made at a Denver Tea Party rally, April 15, 2009, the day the mass protests started. From here.

On April 9, one of the founders of the US Tea Party movement, Phil Russo, wrote a lengthy explanation about how the Tea Party is just too (obviously) racist and otherwise bigoted for him to continue participating within it. But, of course, Russo can only comprehend this as a new development that the Tea Party “turned” racist, so that his past involvement is justified.

In his own words, “what began as a genuine opportunity to make this country more free” in which he played a central role, “deteriorated [in]to racist name calling, fear of anyone with brown skin, and an irrational focus on Sharia law.” The underlying principles of the Tea Party are getting a pass in exchange for admitting that the current movement is flawed.

There’s some notable problems with Russo’s defense of the early movement’s socially liberal bona fides. He asserts that the Tea Party wasn’t an exclusively Republican movement, since while “there were lots of Republicans and some even more conservative members of the Whig Party and Conservative Party”, there were also “also lots of Libertarians, independents, and Constitution Party members”. Yes, the Constitution Party is supposed to be a signal, like the presence of some self-described libertarians and independents, of general social liberalism.

In their 2008 platform, the Constitution Party made it quite clear that they believe that a “pre-born child, whose life begins at fertilization, is a human being created in God’s image” and therefore, abortion should not “be declared lawful by any institution of state or local government – [by] legislative, judicial, or executive [authorities]“. Just to clear up any confusion, they also opposed “the distribution and use of all abortifacients”, made no mention of the pregnant person’s health, and explicitly denied exemptions for these standards in cases of sexual assault. The new state-level restrictions on abortion that we here at Velociriot have been talking about over the past few weeks pretty clearly come from a similar place and are often advanced by Republicans friendly to or affiliated with the Tea Party movement. Yet the participation of many representatives of the Constitution Party in Tea Party organizations and rallies supposedly shows their socially moderate roots?

But this extends beyond the long-standing support of many Tea Party protesters for governmental restrictions on reproductive freedom. The same 2008 platform calls for US jurisprudence to be based on Biblical principles. When it comes to race, there’s a variety of interesting policies it supports – from explicit opposition to statehood for the District of Columbia or Puerto Rico to a call for “a moratorium on immigration to these United States”. It’s these United States by the way, since they believe in something they call “state sovereignty”. I think we all know how that goes.

This sort of open acceptance of racially-charged politics seems indicative of their broader radical approach. The same platform discusses how to go about “phasing out the entire Social Security program” and is concerned about how “globalists are using the global warming threat to gain more control via worldwide sustainable development”. While those are issues more commonly seen in the US as being economic in nature, there’s a social element to both of them. The ways we value and support the elderly is as much a social as economic question. The issue of international cooperation to address climate change is as much about whether the US should coordinate with the rest of the world as whether economically how we should regulate polluting industries. On those issues, this supposedly moderate force was profoundly hostile to socially liberal ideals, with opposing their economic ramifications often seeming more like an added bonus than the actual issue at stake.

Another totally not bigoted sign from an April 2009 Tea Party protest, from here.

Almost precisely the same language can be seen in the various state-level platforms that the Constitution Party published in 2010, during the Tea Party’s heyday. There’s the same desire to marginalize immigrant communities and the same concerns for the rights of the “pre-born”. This apparently core constituency of the Tea Party didn’t moderate itself much if at all while participating in the early movement.

More recently, while the founders and original members of the Tea Party began a protracted national discussion about whether racists or the Republican Party or both ruined their movement, the Constitution Party put out the same sort of platform and ran a presidential candidate who espoused the same sort of hostile rhetoric about (at least temporarily) ending immigration to the US as we know it. They were extremists before the Tea Party came along, while they were involved in it, and since that initial organizing period.

The fact that Russo either can’t or won’t perceive this problem is indicative of an underlying issue – whether he’s actually all that moderate himself on the same issues. He expresses his own socially liberal outlook in the article primarily through opposition to indefensibly racist statements, support for discontinuing the Defense of Marriage Act (DOMA), and assorted complaints about bans on food or drugs perceived to be unhealthy. Those are apparently our standards for being socially moderate? Contrary to popular belief, there’s more to racism than epithets, more to queer liberation than same-sex marriage, and more to consumer rights than the right to buy whatever product you want.

Of course, if you’re comparatively sheltered it’s easier to think that preventing racism and heterosexism is mostly about making mean words unacceptable to say or ending blatant governmental discrimination, without considering whether stigmatized groups might need proactive governmental assistance or protections. If you’ve never had to assess whether a product is safe for you to consume, it’s easier to call for less government oversight and for the government to stop restricting what you can purchase. It’s harder to examine how the system we use to monitor food safety is honestly being dismantled. If this is a “real” libertarianism that doesn’t merely aspire to give free market economics ideological cover, it’s a very carefully constructed one. It seems determined to avoid the conclusions a lot of marginalized groups have reached: that the government’s attempts to protect us should be constantly evaluated and questioned, but that the concept of the government helping people isn’t in and of itself invalid.

It seems like many “moderate” conservatives or libertarians like Russo don’t want to be affiliated with the openly racist and bigoted attitude that permeates the Tea Party movement, but they aren’t willing to evaluate whether it was actually there all along. After all, it’s much easier if they don’t think about that, because that might lead to them seeing the same hostility in their own politics even after their break from the now discredited Tea Party. Their real problem isn’t with being racist, it’s with being known to be racist.

Developers: Say 'game over' to overpaying your taxes

Jason Wilson — Mon, 15 Apr 2013 16:30:19 +0000

Robert Wonish is a director at the alliantgroup.

Considering the expensive and rapidly rising costs of the software industry, the game development cycle has become increasingly difficult to sustain. Many companies are feeling trapped by rising overhead and have been forced to outsource development to compensate. Luckily, tax incentives are available to software companies that can ensure crucial product developments remain in-house and even be the deciding factor that keeps a company’s doors open.

More often than not, software companies will discover that they qualify for the benefits of tax incentives, such as the R&D tax credit; however, many are simply unaware of its existence or assume that it doesn’t apply to them. If your company has invested time, money, and resources toward the advancement and improvement of designs and processes, then you most likely meet the requirements of the R&D tax credit.

More gaming activities may qualify than you think. In addition to designing and testing new games, software coding, hardware development, and iterative testing can make a company eligible for incentives. A gaming developer of innovative video arcade games had annual sales of $38 million and qualified for $650,000 in state and federal R&D tax credits. During the development process, the company created code for their new products to load into customized arcade devices.

If you are a game developer and the above activities sound in any way similar to what your company does on a day-to-day basis, the R&D tax credit is an available and powerful government endorsed incentive to which you are most likely entitled. If you would like to find out how you also can obtain thousands to millions of dollars in tax credits, read on.

R&D qualifications

The R&D credit is a reward for taxpayers that perform qualified research activities domestically. If you think that you have to have developed groundbreaking software platforms for Fortune 500 software companies to be conducting qualified activities as defined by the Internal Revenue Code, think again.

Game developers simply need to develop new or improved software features or functionality and go through a development process (agile, waterfall, prototyping, spiral, RAD, and so on).

If you don’t ask, you won’t receive

Firms of any size may qualify for this incentive. A smaller developer of gaming software with annual sales of $2 million developed touchscreen, video-based casino games. To develop new products, the company created innovative solutions to simulating games of chance. By utilizing custom algorithms, the company simulated real-world statistics and scenarios. Additionally, they created efficient and streamlined methods of delivering premium sound and graphics from compressed resource files. This company received over $250,000 in state and federal credits.

Sadly, it remains the case that one of the biggest roadblocks for businesses taking the R&D tax credit is self-censorship. It was recently reported in the Wall Street Journal that 19 out of 20 small and medium businesses that are eligible for tax incentives, such as the R&D tax credit, fail to take advantage. This is overwhelmingly due to self-censorship. Small and medium business owners frequently think that only Nobel Prize winners and rocket scientists should bother applying.

Happily, in the rare example of Congress getting tax policy right, the R&D tax credit is intended to support a broad range of industries and is focused on encouraging not only the new thing but also improvements and modifications to existing products and processes based on known scientific principles.

Act now

This incentive is one of the largest available to game developers, but is also one that is often overlooked. “The federal R&D credit has been in place for several decades, and it has become more generous over the years. Businesses that looked at the credit in the past and determined that they didn’t qualify may now realize significant benefits due to the credit’s broader applicability,” Mark Everson, alliantgroup Vice Chairman and former IRS Commissioner, said. “I can certainly attest to the complexity of the tax code, and the requirements for the R&D tax credit are no exception. That having been said, at almost $10 billion a year, the R&D credit is one of the most generous tax benefits established by Congress.”

With a challenging economy and costs continuing to rise, it is essential that every company avoid self-censoring and take advantage of the R&D tax credit.

While this incentive can be of extreme benefit to game developers, it is also complex, and fully identifying the proper substantiation for capturing the credit requires a deep understanding of the tax code. For this reason alliantgroup, a specialty tax firm, has developed a Software Specialization Group that includes industry experts with educational backgrounds and hands-on analytical and developmental experience.

The available federal and state R&D tax credits can offer substantial financial support to gaming developers. At over $10 billion credits awarded a year, if you did not think you qualified in the past, it pays (literally) to take a second look!

Image source: Warner Bros.

Robert Wonish, J.D., is a director in alliantgroup’s Tax Controversy Services department. Robert holds a bachelor’s in business administration in information systems and international business and a J.D. The alliantgroup is a national specialty tax service provider, working with businesses to ensure companies receive the full benefit of available federal and state tax incentives.

Not paying enough today

melindaklewis — Mon, 15 Apr 2013 14:44:10 +0000

This is what taxes look like in Kansas now:

Image credit, Think Progress

Hence my complaint:

I am not paying nearly enough in taxes today.

In addition to the lower rates enacted in the massive tax cuts in 2012, there is the fact that I don’t pay nearly as high a percentage of my income in sales taxes as do lower-income households that consume more of their income. And the tax deductions I get to claim for my homeownership (although Governor Brownback wants to eliminate those, in order to help close the budget gap), and for the contributions I make to my children’s college savings account (thereby, really, reaping state subsidies for my children’s future educational advantages). Those are worth thousands of dollars, and I never have to take a drug test for those public benefits.

But it’s not only not enough as a percentage of my income; that part more just chafes at me, because it doesn’t seem fair that we make quite a bit and pay not so much.

It’s not enough in terms of what we really need, and what our state will have to go without.

I don’t pay enough in taxes when I have to turn around and write checks to our public school so that my kids can have a counselor a few days a week, and so that there are adequate supplies in the classroom.

I don’t pay enough in taxes when I hear that our community mental health centers have waiting lists for crisis appointments.

I don’t pay enough in taxes when some of our sidewalks, in a very walkable city, are nearly impassable because of needed repairs.

I don’t pay enough in taxes when we’re not investing what we must in the commons, and in our collective well-being, such that we then retreat into our private realms, where we finance what we can out of all that is left.

It’s tax day, even if it doesn’t really feel like it. We have work to do, so that this can be a day of celebration again.

Uncle Sam hands me the bill for a delicious but expensive year of government

ashlockcharlotte — Mon, 15 Apr 2013 02:02:13 +0000

Just paid my government bill, otherwise known as taxes.

It’s like you go out to dinner at a fancy restaurant, you’re enjoying the filet mignon, the tender lemon-flavored asparagus shoots, and oh my god the creme brulee is to die for! And then the bill comes, someone makes the worn-out quip “what’s the damage” and you stare stupefied at the number wondering how all those perfectly innocent numbers could have added up to such a large number. “I could have made twenty home-cooked meals at that price,” you scold yourself self-righteously, shaken with buyer’s remorse. (No, I am not a shopaholic, but I do have a weakness for a good meal.)

I also have a weakness for good government. And yes, I appreciate that my unemployed friends can stay on their parents health care, that Americorps continues to exist, that birth control is free and that people are getting real(er) about gay marriage. I’m pretty happy with my government. But is it really that expensive? Really?

You know what I want. I want a receipt. In the post-mortem of buyer’s remorse at a fancy restaurant, I’m able to stare at the bill, pondering the tactics of drinks and entrees and sides and desserts, wondering where I could have held back from my hedonistic spree to save a few bucks. But with government, you don’t get that. Sure, you get acknowledge of payment, but the receipt is not ITEMIZED. I want an itemized receipt.

I paid $1645 in state and federal taxes. How much of that went to the US Military? $500? How much went to maintaining the highway system? $300? What about paying government officials salaries? And how much went to pure silliness, like corn syrup and crude oil subsidies? I want to know about the money I’M spending. I want to know if I made a good purchase. Most everything I google on this topic is ideologically biased and oversimplified to the point where it triggers my gag reflex. A few things, however, are pdfs that would break the legs of my desk with their weight if I printed them out. There is no middle ground.

I guess I think about it this way: government is one of the necessities of life, like food. You need it to survive. Just as you’d starve to death without food, without government you’d probably get beheaded by an anarchistic warlord, or die from a tainted water supply, or something. But with food, I get to choose piece by piece how I spend my money. I get to choose whether I want turkey or ham in my sandwich or the “California sandwich” with avocados fancy mustard, and bean sprouts. But government don’t work that way. With government, the whole country votes turkey or ham, and you end up eating ham sandwiches for the next 4-8 years, whether you like it or not.

And why? Why you may ask? Because the government is too big for any one person to put their jaws around, like a sandwich. It’s not a simple purchase. But it should at least be a more transparent one. Short of reading several thousand pages of policy briefs and getting a PhD in public policy, I don’t know how I would cut through the propaganda from both sides to figure out what’s really happening to those nickels and dimes the IRS is currently transferring drop by painful drop from my bank account into their coffers.

Perhaps someday humanity will become so enlightened that we’ll come up with a truly rational system for funding all the projects that are too big for one person or even one company to handle. Until then I guess it’s politics as usual.

Democratic Controlled U.S. Senate Fiscal Year 2014 Budget for the Federal Government -- Videos

Raymond Thomas Pronk — Mon, 15 Apr 2013 00:49:51 +0000

Paul Ryan Questions OMB Director – President’s Fiscal Year 2014 Budget Request

Sessions: Obama’s Persistent Budget Misrepresentations Make Compromise More Difficult

‘When Do We Hold People Accountable?’ Sessions Slams Dems For Falsely Claiming ‘Balance’ To Nation

WASHINGTON, March 22—Throughout the course of the budget debate, Democratic Senators have repeatedly suggested their budget contains a “balanced approach,” a rhetorical description that has no accounting value. (Sen. Sheldon Whitehouse (D-RI) went even further last night and repeatedly said his party’s plan called for “balancing the budget.”)

But as Sen. Sessions pointed out this morning, “They know they don’t have a balanced budget. They won’t tell the American people they don’t have one. They just use the word. But it’s not in their document. Where and when do we hold people accountable in this United States Senate for an accurate [description] of legislation? It’s wrong.”

To view for yourself the budget tables with the Democrats’ own numbers (in other words, before one even begins to strip out all the gimmicks and accounting tricks), please click here: http://1.usa.gov/YwdsbM. Note that cumulative deficits will amount to $5.198 trillion, and the nation’s gross debt will climb to $24.365 trillion by 2023.

Dem Senators On Budget Committee Unanimously Oppose Balancing The Federal Budget

Hatch on Senate Democrats’ Budget: ‘A Cynical Political Document’

Senator King Discusses 2014 Fiscal Year Budget Blueprint

Sessions: Dem Budget Would Trap Millions In Poverty By Shielding Failed Government Programs

Senate Budget Committee Hearing | 4.10.13 | Chairman Murray Opening Remarks

Chairman Murray Kicks Off Senate Budget Resolution Debate with Speech on Senate Floor

Foundation for Growth: Restoring the Promise of American Opportunity

U.S. Senate Budget Committee

Senate Budget Committee Chairman Patty Murray unveils her vision for the Fiscal Year 2014 Senate Budget resolution.

For more information: http://www.budget.senate.gov/democratic

Portman Remarks at Senate Budget Committee Markup

Hatch: Entitlement Reform Not an Option, a Necessity

Background Articles and Videos

Making the Federal Budget

How do you spend four trillion dollars? Turns out, you don’t; it takes the President and the Congress to allocate, authorize, appropriate, resolve, outlay, sequester, impound, and just plain spend that much in 2011. Such a process is baffling at times. It’s so complex that you may marvel that Washington can get any action accomplished and paid for at all. So how does the federal budget happen?

Join the Mercatus Center’s Capitol Hill Campus and Senior Research Fellow Jason J. Fichtner for a walk through the process of making the federal budget. He explains the process from its beginnings in the halls of the White House, highlight the many roles Congress takes to authorize and enforce the budget, and navigate the twisting, puzzling conglomeration of bureaucratic steps, political goals, and accountancy rules that go into making our government function.

Changing the Budget Process to Promote Fiscal Responsibility

A Sustainable Approach to Entitlement Reform

Foundation for Growth: Restoring the Promise of American Opportunity

The Fiscal Year 2014 Senate Budget builds on the work done over the last two years to create jobs, invest in broad-based economic growth, and tackle our deficit and debt responsibly.

This budget takes the balanced and responsible approach to our fiscal challenges that every bipartisan group has endorsed and that the American people support. It includes responsible spending cuts made across the federal budget, as well as significant new savings achieved by eliminating loopholes and cutting wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

The Senate Budget is grounded in the understanding that our country’s long-term fiscal and economic goals will only be met with policies that support a strong and growing middle class. And it keeps the promises we have made to our seniors, our families, and our communities.

The American people are sick and tired of watching their government lurch from crisis to crisis. The Senate Budget offers a serious and credible path away from this gridlock and dysfunction and toward a long-term plan to create jobs, lay down a strong foundation for broad-based economic growth, replace sequestration, and tackle our deficit and debt responsibly and credibly.

This budget reflects the values of a diverse Senate serving a diverse nation, and it is guided by the principles and priorities that are strongly supported by the constituents we were elected to represent

http://www.budget.senate.gov/democratic/index.cfm/senatebudget

Foundation for Growth: Restoring the Promise of American Opportunity

The Fiscal Year 2014 Senate Budget builds on the work done over the last two years to create jobs, invest in broad-based economic growth, and tackle our deficit and debt responsibly.

The highest priority of the Senate Budget is to create the conditions for job creation, economic growth, and prosperity built from the middle out, not the top down.

The Senate Budget takes the position that trickle-down economics has failed as an economic policy and that true national prosperity comes from the middle out, not the top down. We believe that deficit reduction at the expense of economic growth is doomed to failure, and policies that promote a strong middle class are essential to tackling our long-term deficit and debt challenges.

The policies President Barack Obama and Congress put in place in response to the Great Recession pulled our economy back from the brink and helped to add back jobs. But with an unemployment rate that remains stubbornly high, and a middle class that has seen their wages stagnate for far too long, we simply cannot afford any threats to our fragile recovery. Therefore, the Senate Budget:

• Fully replaces the harmful cuts from sequestration with smart, balanced, and responsible deficit reduction, which would save hundreds of thousands of jobs while protecting families, communities, and the fragile economic recovery.

• Invests in long-term economic growth and national competitiveness by tackling our serious deficits in infrastructure, education, job training, and innovation to create jobs now and lay down a strong foundation for broad-based growth.

• Includes a $100 billion targeted jobs and infrastructure package that would start creating new jobs quickly, begin repairing the worst of our crumbling roads and bridges, and help train our workers to fill 21

st century jobs. This jobs investment package is fully paid for by eliminating loopholes and cutting wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

• Protects and continues tax cuts for the middle class and low-income working families.

The Senate Budget builds on the work we have done over the last two years to tackle our deficit and debt responsibly.

At the end of 2010, the bipartisan Simpson-Bowles Commission report laid out a responsible goal of reducing our deficit by $4 trillion over ten years. Since that time, Congress and the administration have implemented $2.4 trillion in deficit reduction, with $1.8 trillion coming from spending cuts and $600 billion coming from new revenue from the wealthiest Americans. The Senate Budget:

• Surpasses the bipartisan goal of $4 trillion in 10-year deficit reduction and puts our deficit and debt on a downward, sustainable, and responsible path.

• Builds on the $2.4 trillion in deficit reduction already done with an additional $1.85 trillion in new deficit reduction for a total of $4.25 trillion in deficit reduction since the Simpson-Bowles report.

• Includes an equal mix of responsible spending cuts and new revenue raised by closing loopholes and ending wasteful spending in the tax code.

• Achieves $975 billion in deficit reduction through responsible spending cuts made across the federal budget:

$493 billion saved on the domestic spending side, including $275 billion in health care savings made in a way that does not harm seniors or families.

$240 billion saved by carefully and responsibly cutting defense spending to align with the drawdown of troops in our overseas operations.

$242 billion saved in reduced interest payments.

• Achieves $975 billion in deficit reduction by closing loopholes and eliminating wasteful spending in the tax code that benefits the wealthiest Americans and biggest corporations.

• Includes reconciliation instructions, a fast-track process that makes sure that the new revenue from the wealthiest Americans and biggest corporations cannot be filibustered in the Senate.

The Senate Budget keeps the promises we have made to our seniors, families, veterans, and communities.

The Senate Budget takes the position that the promises we made to our seniors, families, veterans, and communities ought to be fulfilled. This budget:

• Preserves and protects Medicare so that it is strong for seniors today and will be there for our children and grandchildren.

• Rejects calls to dismantle, privatize, or voucherize Medicare.

• Builds on the responsible changes made in the Affordable Care Act to continue reducing health care costs while protecting patients.

• Protects the expansion of health insurance to nearly 30 million Americans and ensures the federal-state partnership on Medicaid is preserved.

• Rejects efforts to simply shift health care costs to states or make cuts that harm seniors and the most vulnerable families.

• Maintains the key principle that deficit reduction should not be done on the backs of the most vulnerable families and communities.

• Continues to make the investments we need in national defense, homeland security, and law enforcement to keep our country and our communities strong and secure.

• Keeps the promise we have made to our veterans that their country will be there for them and provide the resources and support they need when they come home.

The House Republican approach would hurt middle class families and the economy and break the promises we have made to our seniors.

The Senate Budget offers a very different vision than the approach taken by House Republicans.

Their proposals would cut the legs out from under our fragile economic recovery and threaten millions of jobs. They would slash the investments in infrastructure, education, and innovation that we need to lay down a strong foundation for broad-based growth and that would position us to compete and win in the 21

st century global economy.

House Republicans would dismantle Medicare and cut off programs that support the middle class and most vulnerable families. And they would do all that while refusing to ask the wealthiest Americans and biggest corporations to contribute their fair share.

We believe that the American people strongly support the pro-growth, pro-middle class approach taken in the Senate Budget. And we look forward to engaging with families and seniors across the country as we work to pass the responsible, fair, and bipartisan budget deal the American people expect and deserve.

April 2013

March 2013

The following timetable is used to guide the federal budget process each year (see 2. U.S.C. 631)

Date	Action
1st Monday in February	President’s budget submission (includes OMB sequester preview report and adjustments to spending caps).
February 15	CBO budget and economic outlook report
Within 6 weeks of President’s budget	Committees submit views and estimates to the Budget Committees
April 1	Senate Budget Committee reports resolution
April 15	Congress completes budget resolution. If not, Chairman of House Budget Committee files 302(a) allocations; Ways and Means is free to proceed with pay-as-you-go measures
May 15	Appropriations bills may be considered in the House
June 10	House Appropriations reports last bill
June 15	Congress completes action on reconciliation reconciliation (if applicable)
June 30	House completes action on annual appropriation bills
July 15	President submits mid-session review
October 1	Fiscal year begins Home / Committee Resources / Glossary A B C D E F I J M N O P R S T U Appropriations Act: A statute, under the jurisdiction of the House and Senate Appropriations Committees, that generally provides authority for Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriation act is the most common means of providing budget authority. Currently, there are 13 regular appropriations acts for each fiscal year. From time to time, Congress also enacts supplemental appropriations acts. (See Appropriations under Budget Authority; Continuing Resolution; Supplemental Appropriation.) Authorizing Committee: A committee of the House or Senate with legislative jurisdiction over laws that set up or continue the operations of Federal programs and provide the legal basis for making appropriations for those programs. Authorizing committees also have direct control over spending for mandatory programs since the Government’s obligation to make payments for such program is contained in the authorizing legislation (See Entitlement.) Authorizing Legislation: Legislation enacted by Congress that sets up or continues the operation of a Federal program or agency indefinitely or for a specific period of time. Authorizing legislation may limit the amount of budget authority which can be appropriated for a program or may authorize the appropriation of “such sums as are necessary.” (See Budget Authority; Entitlement.) return to top B Backdoor Spending: (See Direct Spending or Mandatory Spending.) Budget Authority: The authority Congress gives to Government agencies, permitting them to enter into obligations which will result in immediate or future outlays. Budget authority may be classified in several ways. It may be classified by the form it takes: appropriations, borrowing authority, or contract authority. Budget authority may also be classified by the determination of amount: definite authority or indefinite authority. Finally budget authority may be classified by the period of availability: 1-year authority, multi-year authority, or no-year authority (available until used). Forms of Budget Authority Appropriations.–An act of Congress that permits Federal agencies to incur obligations and to make payments out of the Treasury for specified purposes. An appropriations act is the most common means of providing budget authority. Borrowing Authority.–Statutory authority that permits a Federal agency to incur obligations and to make payments for specified purposes out of money borrowed from the Treasury, the Federal Financing Bank, or the public. The Budget Act in most cases requires that new authority to borrow must be approved in advance in an appropriation act. Contract Authority.–Statutory authority that permits a Federal agency to enter into contracts in advance of appropriations. Under the Budget Act, most new authority to contract must be approved in advance in an appropriation act. Offsetting collections and receipts.–Income from the public which is displayed in the budget as negative budget authority. (See Offsetting Collections and Offsetting Receipts. Budget Baseline: Projected Federal spending, revenue and deficit levels based on the assumption that current policies will continue unchanged for the upcoming fiscal year. In determining the budget baseline under Gramm-Rudman-Hollings, the Directors of OMB and CBO estimate revenue levels and spending levels for entitlement programs based on continuation of current laws. For estimating discretionary spending amounts (both defense and non- defense), the Directors assume an adjustment for inflation (GNP deflator) added to the previous year’s discretionary spending levels. The baseline also includes sufficient appropriations to cover a Federal pay comparability raise (without absorption). Budget Deficit: The amount by which the Government’s total outlays exceed its total revenues for a given fiscal year. (See Outlays; Revenues.) Budget Resolution: A concurrent resolution passed by both Houses of Congress setting forth, reaffirming, or revising the congressional budget for the U.S. Government for a fiscal year. A budget resolution is a concurrent resolution of Congress. Concurrent resolutions do not require a presidential signature because they are not laws. Budget resolutions do not need to be laws because they are a legislative device for the Congress to regulate itself as it works on spending and revenue bills. (Unified) Budget Surplus: The amount by which the Government’s revenues exceed its outlays for a given fiscal year. The “on-budget surplus” excludes spending and revenues of the Social Security Trust Fund, and the Postal Service. (See Outlays; Revenues.) return to top C Capital Budget: A budget that segregates capital spending from all other spending, what is usually considered the “operating budget.” In a capital budget, spending and receipts in the capital budget are excluded from the operating budget and are not included in the operating budget’s deficit or surplus calculations. A capital budget would include spending only for capital assets. Capital assets are usually defined to be limited to land, structures, equipment, and intellectual property that are owned and used by the Federal government and have a useful life of more than 2 years. However, some proponents of capital budgeting have suggested that capital should be defined to include Federal “investment” spending that yields long-term benefits. President Clinton established a Commission to Study Capital Budgeting by issuing Executive Order 13037 on March 3, 1997. The Commission is required to issue its report by December 17, 1998. Congressional Budget: (See Budget Resolution.) Continuing Resolution: Appropriations legislation enacted by Congress to provide temporary budget authority for Federal agencies to keep them in operation when their regular appropriation bill has not been enacted by the start of the fiscal year. A continuing resolution is a joint resolution, which has the same legal status as a bill. A continuing resolution frequently specifies a maximum rate at which obligations may be incurred, based on the rate of the prior year, the President’s budget request, or an appropriation bill passed by either or both chambers of Congress. However, there have been instances when Congress has used a continuing resolution as an omnibus measure to enact a number of appropriation bills. A continuing resolution is a form of appropriation act and should not be confused with the budget resolution. Credit Authority: Authority to incur direct loan obligations or to incur primary loan guarantee commitments. Under the Budget Act, new credit authority must be approved in advance in an appropriation act. Crosswalk: Also known as “committee allocation” or “section 302 allocation.” The means by which budget resolution spending totals are translated into binding guidelines with respect to budget authority and outlays for committee action on spending bills. The Budget Committees allocate the budget resolution totals among the committees by jurisdiction, Crosswalk allocations of budget authority and outlays to the committee appear in the joint explanatory statement accompanying a conference report on the budget resolution. Current Services Budget: A section of the President’s budget, required by the Budget Act, that sets forth the level of spending or taxes that would occur if existing programs and policies were continued unchanged through the fiscal year and beyond, with all programs adjusted for inflation so that existing levels of activity are maintained. (See Baseline.) return to top D Deferral of Budget Authority: An action by the executive branch that delays the obligation of budget authority beyond the point it would normally occur. Pursuant to the Congressional Budget and Impoundment Control Act of 1974, the President must provide advanced notice to the Congress of any proposed deferrals. A deferral may not extend beyond the end of the fiscal year in which the President’s message proposing the deferral is made. Congress may overturn a deferral by passing a law disapproving the deferral. Deficit: The amount by which the government’s total budget outlays exceeds its total receipts for a fiscal year. Direct Spending: A term defined in the Budget Enforcement Act of 1990 to include entitlement authority, the food stamp program, and budget authority provided in law other than appropriations acts. From the perspective of the appropriations process, all direct spending is classified as mandatory as opposed to discretionary spending. New direct spending is subject to pay-as-you-go requirements. Direct spending is synonymous with mandatory spending. (See Mandatory Spending and Entitlement.) Discretionary Spending: A category of spending (budget authority and outlays) subject to the annual appropriations process. (See Appropriations Acts.) return to top E Entitlement: Programs that are governed by legislation in a way that legally obligates the Federal government to make specific payments to qualified recipients. Payments to persons under the Social Security, Medicare, and veterans’ pensions programs are considered to be entitlements. (See Direct Spending and Mandatory Spending.) Emergency Spending: As provided in the Budget Enforcement Act, a provision of legislation designated as an emergency by both the President and the Congress. As a result, this additional spending is not subject to the discretionary caps or the pay go requirements and thus will not cause a sequester. In addition, emergency legislation is effectively exempt from Budget Act points of order. There is no specific criteria in the law for emergency spending. However, the following criteria were contained in a June 1991 report prepared by the Office of Management and Budget–as required by Pub. L. No. 102-55 for the determination of whether to designate spending as an emergency spending: Necessary expenditure.–an essential or vital expenditure, not one that is merely useful or beneficial; Sudden.–quickly coming into being, not building up over time; Urgent.–pressing and compelling need requiring immediate action; Unforseen.–not predictable or seen beforehand as a coming need (an emergency that is part of an aggregate level of anticipated emergencies, particularly when normally estimated in advance, would not be “unforseen”); and Not permanent.–the need is temporary in nature. Expenditures: (See Outlays.) return to top F Federal Debt: Consists of all Treasury and agency debt issues outstanding. Current law places a limit or ceiling on the amount of debt. Debt subject to limit has two components: debt held by the government and debt held by the public. Debt held by the government.–Represents the holdings of debt by federal trust funds and other special government funds. For example, when a trust fund is in surplus as is presently the case with Social Security, the law requires that this surplus be invested in government securities. Debt held by the public.–Represents the holdings of debt by individuals, institutions, other buyers outside the federal government, and the Federal Reserve System. The change in debt held by the public in any given year closely tracks the unified budget deficit for that year. Fiscal Policy: Federal government policies with respect to taxes, spending, and debt management intended to promote the nations’ macroeconomic goals, particularly with respect to employment, gross national product, price level stability, and equilibrium in balance of payments. The budget process is a major vehicle for determining and implementing Federal fiscal policy. The other major component of Federal macroeconomic policy is monetary policy. (See Monetary Policy.) Fiscal Year: A fiscal year is a 12-month accounting period. The fiscal for the Federal Government begins October 1 and ends September 30. The fiscal year is designated by the calendar year in which it ends; for example fiscal year 1997 is the year beginning October 1, 1996, and ending September 30, 1997. Functional Classification: A system of classifying budget resources by major purpose so that budget authority, outlays, and credit activities can be related in terms of the national needs being addressed (for example, national defense, health) regardless of the agency administrating the program. There are currently 20 functions. A function may be divided into two or more subfunctions depending upon the complexity of the national need addressed by that function. (See Budget Authority; Outlays.) return to top IImpoundment: A generic term referring to any action or inaction by an officer or employee of the U.S. Government that precludes the obligation or expenditure of budget authority in the manner intended by Congress. (See Deferral of Budget Authority; Rescission of Budget Authority.) return to top JJoint Committee on Taxation (JCT): Section 8001 of the Internal Revenue Code authorized the creation of the Joint Committee on Taxation. By statute, it is composed of five members from the Committee on Finance (three majority, two minority) chosen by such Committee and five members from the Committee on Ways and Means (three majority, two minority) chosen by such Committee. In practice, the Chairmanship and Vice Chairmanship of the Joint Committee on Taxation has rotated between the Chairman of the Committee on Finance and the Chairman of the Committee on Ways and Means with each new Congress. Among other things, the JCT’s duties are to investigate the operation and effects of the federal tax system. return to top M Mandatory Spending: Refers to spending for programs the level of which is governed by formulas or criteria set forth in authorizing legislation rather than by appropriations. Examples of mandatory spending include: Social Security, Medicare, veterans’ pensions, rehabilitation services, Members’ pay, judges pay and the payment of interest of the public debt. Many of these programs are considered entitlement. (See Direct Spending.) Mark-Up: Meetings where congressional committees work on language of bills or resolutions. At Budget Committee mark-ups, the House and Senate Budget Committees work on the language and numbers contained in budget resolutions and legislation affecting the congressional budget process. Monetary Policy: Management of the money supply, under the direction of the Board of Governors of the Federal Reserve system, with the aim of achieving price stability and full employment. Government actions in guiding monetary policy, include currency revaluation, credit contradiction or expansion, rediscount policy, regulation of bank reserves and the purchase and sale of Government securities. (See Fiscal Policy.) return to top NNet Deficit Reduction: Savings below the defined budget baseline achieved for the upcoming fiscal year because of laws enacted or final regulations promulgated since January 1. CBO and OMB independently estimate these savings in their initial and final sequester reports. return to top O Offsetting Collections: Income from the public that results from the government engaging in “business-like” activities with the public, such as the sale of products or the rendering of a service. Examples include proceeds funds derived from the sale of postage stamps. Offsetting collections are credited against the level of budget authority or outlays associated with a specific program or account. (See Offsetting receipts.) Offsetting Receipts: Income from the public that results from the government engaging in “business-like” activities with the public such as the sale of products or the rendering of services. Examples include proceeds from the sale of timber from Federal lands or entrance fees paid at national parks. Rather than being credited against the spending of a particular program or account, (as in the case with offsetting collections) offsetting receipts are deducted from total budget authority and outlays rather than added to Federal revenues even though they are deposited in the Treasury as miscellaneous receipts. Generally offsetting receipts are associated with mandatory spending. (See Offsetting collections.) Off-budget Federal Entity: Any Federal fund or trust fund whose transactions are required by law to be excluded from the totals of President’s budget submission and Congress’ budget resolution, despite the fact that these are part of the government’s total transactions. Current law requires that the Social Security trust funds (the Federal Old Age, Survivors, and Disability trust fund) and the Postal Service be off-budget. However, these entities are reflected in the budget in that they are included in calculating the deficit in order to derive the total government deficit that must be financed by borrowing from the public or by other means. All other federal funds and trust funds are on budget. (See Unified Budget.) Outlays: Outlays are disbursements by the Federal Treasury in the form of checks or cash. Outlays flow in part from budget authority granted in prior years and in part from budget authority provided for the year in which the disbursements occur. Outlay Rates: The ratio of outlays (actual government disbursements) in a fiscal year relative to new budgetary resources in that fiscal year. In estimating the budget baseline and baseline deficit for their sequestration reports, CBO and OMB use outlay rates for projecting levels of spending resulting from available budget authority. return to top P Pay-as-you-go: Arises in two separate contexts: a point of order in the Senate and a sequester order from OMB. Pay-as-you-go in the Senate.–Since fiscal year 1994, the budget resolution has included a pay-as-you-go rule in the Senate. The rule provides a 3/5ths vote point of order in the Senate against consideration of legislation that would cause a net increase in the deficit over a ten year period. It applies to all legislation except appropriations legislation. To determine a violation, CBO measures the budget impact of a direct spending or revenue bill combined with the budget impact of all direct spending and revenue legislation enacted since the latest budget resolution’s adoption to see if the legislation would result in a net deficit increase for any one of three time periods (the first year, the sum of years 1 through 5, and the sum of years 6 through 10.) The pay-go rule sunsets at the end of fiscal year 2002. Pay-as-you-go and sequestration under the BEA.–The Budget Enforcement Act requires OMB to also enforce a “pay-as-you-go” requirement which has a similar effect as the Senate’s point of order: Congress is required to “pay for” any changes to programs which result in an increase in direct spending, or in this case risk a sequester. If OMB estimates that the sum of all direct spending and revenue legislation enacted since 1990 will result in a net increase in the deficit for the fiscal year, then the President is required to issue a sequester order reducing all non-exempt direct spending accounts by a uniform percentage in order to eliminate the net deficit increase. Most direct spending is either exempt from a sequester order or operates under special rules that minimize the reduction that can be made in direct spending. Social Security is exempt from a pay-as-you-go sequester and Medicare cannot be reduced by more than 4 percent. President’s Budget: The document sent to Congress by the President in January or February of each year, requesting new budget authority for Federal programs and estimating Federal revenues and outlays for the upcoming fiscal year. return to top R Revenues: Collections from the public arising from the Government’s sovereign power to tax. Revenues include individual and corporate income taxes, social insurance taxes (such as social security payroll taxes), excise taxes, estate and gift taxes, customs duties and the like. Reconciliation Process: A process by which Congress includes in a budget resolution “reconciliation instructions” to specific committees, directing them to report legislation which changes existing laws, usually for the purpose of decreasing spending or increasing revenues by a specified amount by a certain date. The legislation may also contain an increase in the debt limit. The reported legislation is then considered as a single “reconciliation bill under expedited procedures.” Reserve Fund: A provision in a budget resolution that grants the Chairman of the Budget Committee the authority to make changes in budget aggregates and committee allocations once some condition or conditions have been met. Since a budget resolution establishes a binding ceiling on aggregate budget authority and outlay levels and a binding floor on revenues, budget resolutions frequently include reserve funds for deficit-neutral legislation that would otherwise violate the budget resolution and be subject to a point of order under the Budget Act. For example, the FY 1997 budget resolution included a tax reduction reserve fund that allowed the Chairman to reduce the revenue floor and the relevant spending allocations to accommodate legislation that reduced taxes if that legislation also contained offsetting spending reductions. Rescission of Budget Authority: Cancellation of budget authority before the time when the authority would otherwise cease to be available for obligation. The rescission process begins when the President proposes a rescission to the Congress for fiscal or policy reasons. Unlike the deferral of budget authority which occurs unless Congress acts to disapprove the deferral, rescission off budget authority occurs only if Congress enacts the rescission. (See Deferral of Budget Authority; Impoundment.) return to top S Scoring or Scorekeeping: The process for estimating budget authority, outlay, revenue and deficit levels which result from congressional budgetary actions. Scorekeeping data prepared by the Congressional Budget Office include status reports on the effect of congressional actions and comparisons of these actions to targets and ceilings set by Congress in budget resolutions. These reports are published in the Congressional Record on a regular basis. OMB is responsible for scoring legislation to determine if a sequester is necessary. Sequester: Pursuant to Gramm-Rudman-Hollings, a presidential spending reduction order that occurs by reducing spending by uniform percentages. Sequestrable Resource: Pursuant to Gramm-Rudman-Hollings federal funding authority (budgetary resources) subject to reductions under a presidential sequester order for achieving required outlay reductions (in non-exempt programs). Supplemental Appropriation: An act appropriating funds in addition to those in the 13 regular annual appropriations acts. Supplemental appropriations provide additional budget authority beyond the original estimates for programs or activities (including new programs authorized after the date of the original appropriation act) in cases where the need for funds is too urgent to be postponed until enactment of the next regular appropriation bill. (See Appropriations Act.) return to top TTax Expenditures: Revenue losses attributable to a special exclusion, exemption, or deduction from gross income or to a special credit, preferential rate of tax, or deferral of tax liability. return to top U Unfunded Mandates: A Federal Intergovernmental Mandate is any provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local or tribal government, except as conditions of assistance or duties arising from participation in a voluntary federal program. Exceptions to this rule are: enforcing constitutional rights; statutory prohibitions against discrimination; emergency assistance requested by states; accounting/auditing for federal assistance; national security; Presidential designated emergencies; and Social Security. Provisions that increase stringency of conditions of assistance or decrease federal funding for large state entitlement programs (greater than $500 million) if states lack authority to decrease their responsibilities are considered mandates as well. A Federal Private Sector Mandate is any provision in legislation, statute, or regulation that would impose an enforceable duty upon the private sector. The exceptions are a condition of Federal assistance or a duty arising from participation in a voluntary Federal program. Unified Budget: A comprehensive display of the Federal budget. This display includes all revenues and all spending for all regular Federal programs and trust funds. The 1967 President’s Commission on Budget Concepts recommended the unified budget and it has been the basis for budgeting since 1968. The unified budget replaced a system of the budgets that existed before 1968 (an administrative budget, a consolidated cash budget, and a national income accounts budget). http://www.budget.senate.gov/democratic/index.cfm/glossary

Budget Control Act

The Budget Control Act Serves as the Budget for 2012 and 2013

The Budget Control Act states: “For the purpose of enforcing the Congressional Budget Act of 1974 through April 15, 2012 … the allocations, aggregates, and levels set in subsection (b)(1) shall apply in the Senate in the same manner as for a concurrent resolution on the budget for fiscal year 2012.” In many ways, the Budget Control Act is even more extensive than a traditional budget resolution. Number one, it has the force of law, unlike a budget resolution that never goes to the President. A budget resolution is purely a Congressional document; the Budget Control Act is a law. Number two, it sets discretionary caps for 10 years, instead of the one year normally set in a budget resolution. Number three, it provides enforcement mechanisms, including two years of “deeming resolutions,” which allow budget points of order to be enforced. And fourth, it creates a reconciliation-like “Super Committee” process to address both entitlements and tax reform. And it backs that process up with a $1.2 trillion sequester.

Budget Control Act Legislative Text

The IRS reports: There were more than 1.8 million tax-related ID thefts during 2012 - 4 times as many as in 2010. Wow!!! http://t.co/SfG0MAM9Lv

danetteoneal1 — Sun, 14 Apr 2013 21:35:53 +0000

Income Tax Turns 100

mlclemen — Sun, 14 Apr 2013 16:24:53 +0000

Income Tax Turns 100

With tax day coming up tomorrow, CBS Sunday Morning “celebrates” the income tax’s 100th birthday.

The Week.....Advancing Five Conservative Change

The Pardu — Sat, 13 Apr 2013 15:25:00 +0000

The following is a rare screed on matters of critical importance to US conservatism. Tom Rogan encap

Tory! Tory! Tory! -- Videos

Raymond Thomas Pronk — Sat, 13 Apr 2013 01:53:47 +0000

Tory! Tory! Tory! – Ep 1: Outsiders – BBC 2007

Series exploring the history of the people and ideas behind what became known as Thatcherism. When Thatcher became Prime Minister, the monetarist policies used to combat inflation created large-scale unemployment and weakened the unions. As riots broke out across Britain, there was growing dissent even inside the government. How would Mrs Thatcher survive her plummeting popularity?

Tory! Tory! Tory! – Ep 2: The Road to Power – BBC 2007

Tory! Tory! Tory! – Ep 3: The Exercise of Power – BBC 2007

The Mortgage Interest Deduction Needs to Die

Fri, 12 Apr 2013 21:52:41 +0000

Realtors aren’t useless, but they sure aren’t the sharpest types. I guess if you are super smart you take your life in a direction other than being the guy who unlocks key-boxes and stands in the foyer while strangers wander through a vacant home. I’ve accidentally taught my Realtor like 4 things since we started working together to find a house. One of the most important things I have not taught him, though, is about the mortgage interest deduction. Because I didn’t want to break his heart, sure as he was of his view of things.

In his words, “Obama tried to take it away, but it’s still there.”

My Realtor was saying how buying is better than renting because you get to write off all the interest on taxes. If you have $8,000 of interest in a year, that’s all money you save in taxes, he suggested. I added that “as long as you have deductions greater than the standard deduction and thus are willing to itemize, right?” And his brain cramped up. He definitely disagreed and said that no, the money is saved off taxes regardless. He didn’t seem to understand what I was even saying.

I was so annoyed by his lack of information that I didn’t go the next step and explain to him that:

even if you had $8,000 worth of deductions above the standard deduction and thus itemized, you would only be saving your tax bracket worth of cash. More likely if you are a typical healthy American, your home loan interest at today’s low interest rates could push your deduction up from $12,000 Standard deduction for a married couple to perhaps $17,000 itemized. In that case the mortgage interest deduction earns you $5,000 of deductions ($17000 instead of $12000). At the median American income your top tax bracket is probably 15% of income, so you’ve saved yourself $750 total per year.

Congratulations. If you paid $5,000 in closing costs for the loan, it will only take 6 and a half years to realize your savings on taxes.

Unless your home is very expensive and/or your interest rate is high, this deduction is mostly worthless to you. And it prevents a litany of tax cuts that could be had in its place. It is used a lot and costs the government a lot. It’s just it’s only used by rich people to any real effect.

Nothing wrong with that; I’ll use it when I’m rich and structure the purchase of two homes accordingly. But the lower middle class people who continually claim that they want to see this deduction stick around are being very foolish and are brandishing their lack of Mathematical Reasoning.

I think my future interviews with Real Estate Agents will begin with me asking them to explain to me the mortgage interest deduction.

Pronk Pops Show 104, April 12, 2013: Segment 3: Friedrich August von Hayek: Fighting the Planners -- The Road To Serfdom -- A Profile in Liberty -- Videos

Raymond Thomas Pronk — Fri, 12 Apr 2013 03:23:35 +0000

Pronk Pops Show 104: April 12, 2013

Pronk Pops Show 103: March 28, 2013

Pronk Pops Show 102: March 15, 2013

Pronk Pops Show 101: March 8, 2013

Pronk Pops Show 100: March 1, 2013

Listen To Pronk Pops Podcast or Download Shows 104

Listen To Pronk Pops Podcast or Download Shows 101-103

Listen To Pronk Pops Podcast or Download Shows 98-100

Listen To Pronk Pops Podcast or Download Shows 94-97

Listen To Pronk Pops Podcast or Download Shows 93

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Listen To Pronk Pops Podcast or Download Shows 79-83

Listen To Pronk Pops Podcast or Download Shows 74-78

Listen To Pronk Pops Podcast or Download Shows 71-73

Listen To Pronk Pops Podcast or Download Shows 68-70

Listen To Pronk Pops Podcast or Download Shows 65-67

Listen To Pronk Pops Podcast or Download Shows 62-64

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Listen To Pronk Pops Podcast or Download Shows 55-57

Listen To Pronk Pops Podcast or Download Shows 52-54

Listen To Pronk Pops Podcast or Download Shows 49-51

Listen To Pronk Pops Podcast or Download Shows 45-48

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Listen To Pronk Pops Podcast or Download Shows 30-33

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Listen To Pronk Pops Podcast or Download Shows 16-22

Listen To Pronk Pops Podcast or Download Shows 10-15

Listen To Pronk Pops Podcast or Download Shows 01-09

Segment 3: Friedrich August von Hayek: Fighting the Planners — The Road To Serfdom — A Profile in Liberty — Videos

Friedrich August von Hayek – Profile / Biography (1/4)

The Intellectual Portrait Series: The Life and Thought of Friedrich A. Hayek (Indianapolis: Liberty Fund, 2003)

Friedrich August von Hayek – Profile / Biography (2/4)

Friedrich August von Hayek – Profile / Biography (3/4)

Friedrich August von Hayek – Profile / Biography (4/4)

The Life & Thought of Friedrich Hayek

The Intellectual Portrait Series: The Life and Thought of Friedrich A. Hayek (Indianapolis: Liberty Fund, 2003)

The Road to Serfdom

Hayek on The Road to Serfdom

Inside the Hayek Equation: An Interview with Friedrich von Hayek

Hayek: Fighting the Planners part 1 of 4

Hayek: Fighting the Planners part 2 of 4

Hayek: Fighting the Planners part 3 of 4

Hayek: Fighting the Planners part 4 of 4

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 1 of 2

Milton Friedman on Hayek’s “Road to Serfdom” 1994 Interview 2 of 2

Hayek and Friedman: Head to Head | Roger W. Garrison

Glenn Beck -6/8/2010- The Road to Serfdom

Hayek, the Market Order and the Fatal Conceit

Pronk Pops Show 104, April 12, 2013, Segment 2: Conservative savior of UK’s economy, Margaret Thatcher dead at 87 -- Videos

Raymond Thomas Pronk — Fri, 12 Apr 2013 03:11:37 +0000

Pronk Pops Show 104: April 12, 2013

Pronk Pops Show 103: March 28, 2013

Pronk Pops Show 102: March 15, 2013

Pronk Pops Show 101: March 8, 2013

Pronk Pops Show 100: March 1, 2013

Listen To Pronk Pops Podcast or Download Shows 104

Listen To Pronk Pops Podcast or Download Shows 101-103

Listen To Pronk Pops Podcast or Download Shows 98-100

Listen To Pronk Pops Podcast or Download Shows 94-97

Listen To Pronk Pops Podcast or Download Shows 93

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Listen To Pronk Pops Podcast or Download Shows 88-90

Listen To Pronk Pops Podcast or Download Shows 84-87

Listen To Pronk Pops Podcast or Download Shows 79-83

Listen To Pronk Pops Podcast or Download Shows 74-78

Listen To Pronk Pops Podcast or Download Shows 71-73

Listen To Pronk Pops Podcast or Download Shows 68-70

Listen To Pronk Pops Podcast or Download Shows 65-67

Listen To Pronk Pops Podcast or Download Shows 62-64

Listen To Pronk Pops Podcast or Download Shows 58-61

Listen To Pronk Pops Podcast or Download Shows 55-57

Listen To Pronk Pops Podcast or Download Shows 52-54

Listen To Pronk Pops Podcast or Download Shows 49-51

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Listen To Pronk Pops Podcast or Download Shows 10-15

Listen To Pronk Pops Podcast or Download Shows 01-09

Segment 2: Conservative savior of UK’s economy, Margaret Thatcher dead at 87 — Videos

Conservative savior of UK’s economy, Margaret Thatcher dead at 87

By Raymond Thomas Pronk

“Some Socialists seem to believe that people should be numbers in a State computer. We believe they should be individuals. We are all unequal. No one, thank heavens, is like anyone else, however much the Socialists may pretend otherwise. We believe that everyone has the right to be unequal but to us every human being is equally important.”

~Margaret Thatcher, Speech to Conservative Party Conference, October 10, 1975

Ceremonial funeral services with military honors for Margaret Thatcher, former prime minister of the United Kingdom, known as Maggie to her friends and “the Iron Lady” to her opponents, will be held this Wednesday at St Paul’s Cathedral, according to Prime Minister David Cameron’s office.

Her legacy was to change her country’s dominant ideology from collectivist state socialism implemented in decades of Labour Party policies to an individualist market capitalism implemented in Conservative Party policies. In the process she returned the U.K. to eight years of economic growth and prosperity in the 1980s.

Thatcher supported President Ronald Reagan and the United States in defeating communism in the Soviet Union and winning the Cold War.

Thatcher had been in declining health for a number of years and died peacefully in her sleep the morning of April 8 following a stroke.

British Prime Minister David Cameron said of Thatcher, “As our first woman prime minister, Margaret Thatcher succeeded against all the odds and the real thing about Margaret Thatcher is that she didn’t just lead our country, she saved our country, and I believe she’ll go down as the greatest British peacetime prime minister.”

President Barack Obama said, “The world has lost one of the great champions of freedom and liberty and America has lost a true friend.” Obama said she had taught “our daughters that there is no glass ceiling that can’t be shattered.”

John Boehner, speaker of the house, said, “The greatest peacetime prime minister in British history is dead. Margaret Thatcher, a grocer’s daughter, stared down elites, union bosses and communists to win three consecutive elections, establish conservative principles in Western Europe and bring down the Iron Curtain. There was no secret to her values – hard work and personal responsibility – and no nonsense in her leadership.”

Nancy Reagan, widow of former President Ronald Reagan said: “Ronnie and Margaret were political soul mates, committed to freedom and resolved to end Communism. As Prime Minister, Margaret had the clear vision and strong determination to stand up for her beliefs at a time when so many were afraid to ‘rock the boat.’ As a result, she helped to bring about the collapse of the Soviet Union and the liberation of millions of people.”

In 1975 Thatcher was elected leader of the Conservative Party. She was subsequently elected prime minister of the United Kingdom on May 4, 1979. Thatcher served three terms from 1979 to 1990 becoming Britain’s longest-serving prime minister in over a century as well as the most dynamic, inspirational and controversial.

When Thatcher took office, the British economy was in shambles and in recession, inflation was rising and the government faced possible bankruptcy. This was a direct result of many years of Labour Party socialistic policies of out-of-control government spending, confiscatory taxation and the nationalization or state control of many industries including coal, steel, railways, gas, electricity, water, trucking, airlines and telecommunications.

The writings of Austrian economist and political philosopher, Friedrick A. Hayek, winner of the 1973 Nobel Prize in Economics, in particular his book, “The Road to Serfdom”, inspired and guided Thatcher’s economic policies.

Thatcher turned the economy around and made Britain governable again by taking on and taming the trade unions with labor reform legislation. No longer were the unions able to dictate the nation’s economic policies. Under Thatcher the British government pursued a policy of selling state assets with privatization of industry, thus reversing the Labour Party’s nationalization of industry.

When the Argentina government under the fascist junta invaded the British protectorate of the Falkland Islands in April 1982, she led the U.K. to victory. The Argentinians soon toppled the military junta.

In October 1984 there was an assassination attempt on her life when a hotel in Brighton where she and her husband and other members of her cabinet were staying was bombed by Irish Republican Army (IRA) terrorists.

Thatcher supported Reagan in opposing communism and confronting the “evil empire” of the Soviet Union. She was instrumental in the introduction of cruise missiles in Britain to counter the Soviet military threat. She allied the United Kingdom with the United States against the communist expansion and subversion in the West and the winning of the Cold War with the Soviet Union.

A concise biography of her life can be found at the Margaret Thatcher Foundation web site http://www.margaretthatcher.org/essential/biography.asp. An excellent critical biography is Claire Berlinsky’s “There is No Alternative: Why Thatcher Matters” and related interview on YouTube video titled, “Thatcher & More with Claire Berlinski.”

An excellent multi-part documentary about Thatcher produced in 2008 by the conservative paper, The Daily Telegraph, can be viewed on YouTube as well as an entertaining movie about her early political career titled, “Margaret Thatcher – The Long Walk to Finchley.”

Her husband of more than 50 years, Denis Thatcher, died in June 2003. She is survived by her twin son, Mark, and daughter, Carol, born in 1953.

Thatcher remains a controversial figure in Britain. She was loved and revered by many as well as loathed and reviled by some. She will be remembered by all who value economic freedom and individual liberty.

“Freedom to choose is something we take for granted—until it is in danger of being taken away. Socialist governments set out perpetually to restrict the area of choice, Conservative governments to increase it. We believe that you become a responsible citizen by making decisions yourself, not by having them made for you.”

~Margaret Thatcher, Speech to Conservative Party Conference, October 10, 1975

David Cameron’s Commons tribute to Margaret Thatcher in full

Margaret Thatcher – Falklands War – YouTube

MARGARET THATCHER – Pt 1 The Making of Margaret (Telegraph Documentary)

MARGARET THATCHER – Pt 2 The Falklands (Telegraph Documentary)

MARGARET THATCHER – Pt 3 World Stage (Telegraph Documentary)

MARGARET THATCHER – Pt 4 The Age of Dissent (Telegraph Documentary)

MARGARET THATCHER – Pt 5 Taking on the Unions (Telegraph Documentary)

MARGARET THATCHER – Pt 6 Public Image, Private Life. (Telegraph Documentary)

MARGARET THATCHER – Pt 7 The Fall (Telegraph Documentary)

MARGARET THATCHER – Pt 8 The Legacy (Telegraph Documentary)

Margaret Thatcher – The Long Walk To Finchley Full Movie

Thatcher: The Downing Street Years (1/4 BBC)

Thatcher: The Downing Street Years (2/4 BBC)

Thatcher: The Downing Street Years (3/4 BBC)

Thatcher: The Downing Street Years (4/4 BBC)

Pronk Pops Show 104, April 12, 2013, Segment 1: Beyond budget busting: spending addiction disorder bordering on fiscal insanity, part 1 -- Videos

Raymond Thomas Pronk — Fri, 12 Apr 2013 02:44:28 +0000

Pronk Pops Show 104: April 12, 2013

Pronk Pops Show 103: March 28, 2013

Pronk Pops Show 102: March 15, 2013

Pronk Pops Show 101: March 8, 2013

Pronk Pops Show 100: March 1, 2013

Listen To Pronk Pops Podcast or Download Shows 104

Listen To Pronk Pops Podcast or Download Shows 101-103

Listen To Pronk Pops Podcast or Download Shows 98-100

Listen To Pronk Pops Podcast or Download Shows 94-97

Listen To Pronk Pops Podcast or Download Shows 93

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Listen To Pronk Pops Podcast or Download Shows 88-90

Listen To Pronk Pops Podcast or Download Shows 84-87

Listen To Pronk Pops Podcast or Download Shows 79-83

Listen To Pronk Pops Podcast or Download Shows 74-78

Listen To Pronk Pops Podcast or Download Shows 71-73

Listen To Pronk Pops Podcast or Download Shows 68-70

Listen To Pronk Pops Podcast or Download Shows 65-67

Listen To Pronk Pops Podcast or Download Shows 62-64

Listen To Pronk Pops Podcast or Download Shows 58-61

Listen To Pronk Pops Podcast or Download Shows 55-57

Listen To Pronk Pops Podcast or Download Shows 52-54

Listen To Pronk Pops Podcast or Download Shows 49-51

Listen To Pronk Pops Podcast or Download Shows 45-48

Listen To Pronk Pops Podcast or Download Shows 41-44

Listen To Pronk Pops Podcast or Download Shows 38-40

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Listen To Pronk Pops Podcast or Download Shows 16-22

Listen To Pronk Pops Podcast or Download Shows 10-15

Listen To Pronk Pops Podcast or Download Shows 01-09

Segment 1: Beyond budget busting: spending addiction disorder bordering on fiscal insanity, part 1 — Videos

Beyond budget busting: spending addiction disorder bordering on fiscal insanity, part 1

By Raymond Thomas Pronk

Note: This is part 1 of a four-part opinion series on the economic consequences of the federal government’s fiscal year 2014 budget contained in House, Senate and presidential budget proposals.

Washington ruling power elites from the Democratic and Republican parties are misleading the American people into believing that they are fiscally responsible and balancing the federal government budget.

Both political parties suffer from an out-of-control spending addiction disorder (SAD) — spending beyond the means of the American people—that borders on fiscal insanity.

For 12 years the federal government has been running up massive budget deficits where government spending outlays exceed tax revenues by hundreds of billions of dollars. The end result is about 40 cents of every dollar the federal government spends today must be financed by U.S. Treasury debt in the form of bills, notes and bonds.

The situation has gotten so bad that the Federal Reserve System, the U.S. central bank, is now purchasing the majority of Treasury securities—the monetization of debt. The Fed pays for these securities by creating Federal Reserve notes, thereby expanding credit and the U.S. money supply. The Fed has become a buyer of first resort when it comes to U.S. Treasury securities and financing the federal government, thus enabling the spending addition disorder to continue unabated.

This leads to inflation, a rise in the general price level and a decline in the purchasing power of your money. It has also led to excessive speculation in commodity future contracts and other securities such as stocks. Every time you go to the gas station or the supermarket, you see the results of an easy monetary policy and excessive speculation in rising energy and food prices. Inflation is a hidden tax that all Americans are now paying to support the federal government spending addiction disorder habit.

American families, businesses, charities, churches, schools, colleges, cities, counties, states and other institutions are all required to balance their budgets or face financial ruin and bankruptcy. The federal government should also be required to balance its budget by limiting spending to expected tax revenues.

The House of Representatives Committee on the Budget, chaired by Paul Ryan (R-Wis.), passed the Fiscal Year 2014 Budget resolution on March 21, titled The Path to Prosperity, A Responsible, Balanced Budget by a vote of 221-207. Ten Republicans and 197 Democrats voted against the bill.

House Speaker John Boehner (R-Ohio) said “Voting for this budget means supporting the Keystone pipeline and American-made energy, means more jobs and lower energy bills.” He said “Repealing Obamacare and supporting patient-centered reforms means more jobs and lower health care costs for the American people. Protecting and strengthening Medicare means a secure retirement for older Americans. Cutting waste means more fairness and accountability for hard-working taxpayers. Doing all of this means preserving the American Dream, which is what we were sent here to do.”

The budget’s label is very misleading, for the fiscal year 2014 budget is clearly unbalanced with an estimated deficit of at least $528 billion. The actual deficit would most likely be much higher for it optimistically estimates tax revenues to be $3 trillion. Should the economy’s growth rate slow to under 2 percent or go into another recession, tax revenues would be closer to $2.5 trillion. The table below clearly shows the House budget would not balance until 2023 at the earliest and assumes that Obamacare would be repealed. This would require the Republicans keeping control of the House and recapturing control of the Senate and presidency in 2016.

House Republican Fiscal Year 2014 Budget (Nominal Dollars in Billions)
House Budget					As a Share of Gross Domestic Product
FiscalYear	Outlays	Revenues	Deficit (+)Surplus (-)	Debt Held by Public	Outlays	Revenue	Deficit	Debt Held by Public
2014	3,531	3,003	528	12,850	21.2%	18.0%	3.2%	77.2%
2015	3,498	3,373	125	13,070	19.8%	19.1%	.7%	74.1%
2016	3,660	3,591	69	13,226	19.5%	19.1%	.4%	70.4%
2017	3,820	3,765	54	13,362	19.1%	18.9%	.3%	66.9%
2018	3,991	3,937	54	13,485	19.1%	18.8%	.3%	64.4%
2019	4,198	4,101	97	13,648	19.2%	18.7%	.4%	62.4%
2020	4,401	4,279	122	13,837	19.3%	18.7%	.5%	60.5%
2021	4,587	4,496	91	13,993	19.2%	18.9%	.4%	58.7%
2022	4,827	4,734	93	14,154	19.4%	19.0%	.4%	56.9%
2023	4,954	4,961	-7	14,211	19.1%	19.1%	0.0%	54.8%
10 Years					10-Year Average
2014-2023	41,466	40,241	1,225		19.5%	18.8%	.6%

Source: http://budget.house.gov/uploadedfiles/summary_tablesfy14.pdf

Since the current Congress cannot bind future Congresses, the budget estimates for fiscal years 2014 and 2015 are the only ones of relevance and would add more than $653 billion in deficits and additional debt to the nation’s existing public-held debt exceeding $12 trillion. However, this is significantly less than the four previous fiscal years under President Barack Obama where the deficits exceeded $1 trillion each year and added more than $5 trillion to the national debt.

Part 2 of the opinion series will review the Senate Democratic fiscal year 2014 budget.

Baseline Budgeting

Achieving a Sustainable Federal Budget

Battle of the Budgets: House vs. Senate

Paul Ryan: The House Delivers A Responsible, Balanced Budget

House Session 2013-03-21 (09:00:30-10:02:47)

Paul Ryan: A Balanced Budget Will Grow the Economy

Credibility Deficit: President’s False Claims Evaporate

Paul Ryan Announces 2014 Budget Proposal and Calls for No New Taxes

President Obama Announces the Fiscal Year 2014 Budget

Barack Hussein Obama and his liberal/socialist allies are destroying our country, but people revel in the fact that we're the best of the worst!

Alex H. Ahmedinejahd — Thu, 11 Apr 2013 23:45:16 +0000

Hello~~~! When is it ever a good thing and a point of pride that a slowly decaying piece of carcass is served up as steak, regardless of how much it’s decayed and how fast it is decaying? This is what BHO and his lib/soc allies want us to celebrate and revel in, can you believe this? Their excuse of a policy is founded on the principle that we are so much better off than everyone else and have so much wealth we should squander as much as we can and as fast as we can in the name of humanity — I’m assuming that most libs/socs are trying to be decent human beings as opposed to the lib/soc politicians that are the maggots feasting off of the decaying carcass.

Here’s what so amazing about BHO and his lib/soc allies. Why is it that these people — some of them reputed to be very intelligent — can’t learn from the mistakes and the lessons that Europe is going through now, that South America did pre-1990s, that the UK did pre-Margaret Thatcher (one of the last great leaders of our times), that Cuba and North Korea are currently going through? What is so damned difficult about understanding what these other countries did/do and just avoid their mistakes? Why do we have to go down the same path that these idiots are/did go through? It’s inconceivable that some of these people are Nobel laureates, famed economists, successful investors, and renowned policy wonks! It is truly inconceivable and very highly puzzling.

There should be nothing difficult about learning from other people and countries’ mistakes. It is crystal clear that socialism has destroyed many countries and we are headed in the same direction, so why do these people insist doing the same thing? When confronted with this “inconvenient truth,” do you know what the typical response from these socs/libs are? We are not a socialist country and we don’t have socialist policies! Some people say this with massive condescension, some say it with puzzled, quizzical looks, and some say it with anger and indignation, but all say it with righteousness in their voices and mind. Then, starting with the definition of socialism, and confronted with policy similarities, denial and refusal to see the truth seems to be the order of the day. These socs/libs then try to turn it around and try to blame capitalism and individual freedoms for not only the decline of the US economy but also the increasing poverty levels and claim that their socialist policies are actually saving the country without providing any evidence to support their claims, and, in fact, while denying the truth.

The fact of the matter is that we are closer to socialism as a country than capitalism and more of a dictatorship than a democracy. It is getting to a point of absurdity that we call ourselves a capitalist democracy. Think about it: 1) People talk about how the rich don’t make their own money, but the poor do? 2) The vast majority approve of the so called rich paying way more taxes (to 10% pays 70% of income taxes) than the poor (bottom 50% pay 2% of the income taxes) and the middle-class, 3) people routinely talk about how the rich don’t pay their fair share, which proves that these people are either ignorant or have no concept of Justice, 4) they decry the widening poverty gap, but couldn’t save the poor to save their own lives, 5) don’t realize that in a successful capitalist economy the poverty gap must widen for the benefit of all, 6) what’s important isn’t the poverty gap, but that the quality of living for everyone rises, and 7) they have no idea that they are causing the decay of the economy, but continue to push their poisonous agenda.

The solution isn’t that complicated. We have to stop our socialist policies and go back to the roots of our country’s foundation. By the way, education isn’t a social program. However, all other socialist programs should be terminated, including welfare, medicare/medicaid, social security, food stamps, earned income tax credits, etc. These should all be privatized, tax rates for the rich dropped dramatically and give everyone the choice to spend their money the way they want to. This is Just and fair.

So, here are the real truths: 1) Everyone, and I mean everyone, the richest of the rich to the poorest of the poor, everyone who makes money makes it on their own, for their own and in their own way, 2) when one group of people are forced to spend their hard-earned money to support another, even if it is only a penny, this is not only unjust, but also tantamount to indentured servitude, 3) the widening wealth gap between the rich and the poor is a natural progression of a successful capitalist society and must continue to widen, 4) as mentioned previously, the important thing isn’t whether or not the rich get richer and the poor get poorer, but whether the quality of life is improving or not, 5) when we take away the incentive to survive, we reward the lazy, unmotivated, and incompetent at the expense of hard-working, productive and innovative people, 6) there are far better ways to help the poor than to give them money, 7) the important thing to note is that a burgeoning, thriving and innovative economy is the root to prosperity for all, 8) the only way to create a burgeoning, thriving, and innovative economy is to invest, 9) to maximize investments, a country must minimize taxes for those that have the ability to invest, 10) second chances should be over when people become an adult, and if children don’t learn then as adults they must be allowed to suffer, 11) when someone is born into difficult circumstances, it should not be the responsibility of others to bring them out of their difficult circumstances, i.e., why are the unfortunate circumstances of any individual my problem when I’m not in any way shape or form responsible for their difficult circumstances? 12) education is the key to a burgeoning, thriving and innovative economy, 13) defense is the key to protecting our burgeoning, thriving and innovative economy, 14) infrastructure is the key to low-cost, dynamic, mobile and fluid economy, and 15) therefore, the government should spend money only on self-defense, infrastructure and education.

Why is this so difficult for BHO and his soc/lib allies to understand? It’s remarkable that such a simple lesson is lost on these people and that we have to pay the price for their stupidity and blindness. Instead, they celebrate the fact that we are better than everyone else in the world, which isn’t saying much because it’s like a high school athlete competing against a grammar school athlete and crushing them in competition; big deal! Our standard cannot be a relative standard, it must be an absolute standard. We must achieve the levels equivalent to that of a world-class athlete irrespective of what the rest of the world achieves. Then and only then will we have achieved that which justifies our great potential. Instead, BHO and his soc/lib allies tout the fact that we are better than others and put forth that as a reason to do even more stupid things. It’s ridiculous!

For more please read my books, “Under the Constitution with Liberty and Justice for ALL,” available at http://www.CreateSpace.com/3978962 and “The New Constitution for Modern America,” available at http://www.CreateSpace.com/4281897

Blowing Bubbles

michaelharrington — Thu, 11 Apr 2013 15:43:50 +0000

Fool me once, shame on you. Fool me twice, shame on me.

Is the Fed Blowing a New Housing Bubble?

Stagnant real incomes suggest that rising home prices reflect artificially low interest rates.

By EDWARD PINTO

Over the past year, the Federal Reserve has ramped up its policy of quantitative easing, with the result being new stock market highs and surging bond prices. Moreover, housing prices jumped 8%, the biggest annual gain since 2006.

The result is that more than a trillion dollars have been added to the market value of single-family homes. Homeowners are now wealthier and according to what economists call the “wealth effect,” they should be willing to spend more, helping the economy.

But there is another, less sanguine view of the housing recovery. Recent data released by the Federal Housing Finance Agency (FHFA) suggest that the increase in house prices is not being driven by a broad-based improvement in the economy’s fundamentals. Instead, the Fed’s lower rates are simply being capitalized into higher home prices. This does not bode well for the future.

A comparison of FHFA’s conventional home-financing data for February 2012 and February 2013 shows that borrowers bought newly built and existing homes in 2013 for 9% and 15% more respectively than in the previous year. Increases of this magnitude cannot be attributed to higher incomes, as these rose a mere 2% over the last year, just keeping up with inflation. It appears that home prices are being levitated by quantitative easing. Because interest rates were .625% and .90% lower on new and existing homes respectively this year compared with last year, the monthly finance cost to purchase a new home remained the same and went up only 3% for an existing home.

While a housing recovery of sorts has developed, it is by no means a normal one. The government continues to go to extraordinary lengths to prop up sales by guaranteeing nearly 90% of new mortgage debt, financing half of all home purchase mortgages to buyers with zero equity at closing, driving mortgage interest rates to the lowest level in 100 years, and turning the Fed into the world’s largest buyer of new mortgage debt.

Thus, with real incomes essentially stagnant, this is a market recovery largely driven by low interest rates and plentiful government financing. This is eerily familiar to the previous government policy-induced boom that went bust in 2006, and from which the country is still struggling to recover. Creating over a trillion dollars in additional home value out of thin air does sound like a variant of dropping money out of helicopters.

Will history repeat? When it comes to interest rates, whatever goes down must go up.

The average mortgage rate during the first nine years of the 2000s was 6.3% compared with today’s rate of less than 3.5%. If mortgage rates were to increase to a moderate 6% in three years, say, some combination of three things would have to happen to keep the same level of homeownership affordability. Incomes would need to increase by a third, house prices would need to decline by a quarter, or lending standards would need to be loosened even further.

The National Association of Realtors and the rest of the government mortgage complex can be relied on to push for looser lending. The Consumer Financial Protection Bureau recently came out with new rules that would grease the skids for relaxed lending standards, compliments of Fannie Mae, Freddie Mac and the Federal Housing Administration.

Given the continued subpar economic recovery and our past experience with the disastrous impact of loose lending encouraged by federal policies, homeowners would best be cautious about spending their new found “wealth.” Americans have seen this movie before and know how it ends.

Friedrich August von Hayek: Fighting the Planners -- The Road To Serfdom -- A Profile in Liberty -- Videos

Raymond Thomas Pronk — Thu, 11 Apr 2013 02:14:16 +0000

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Conservative savior of UK’s economy, Margaret Thatcher dead at 87

Raymond Thomas Pronk — Wed, 10 Apr 2013 22:48:56 +0000

Conservative savior of UK’s economy, Margaret Thatcher dead at 87

By Raymond Thomas Pronk

~Margaret Thatcher, Speech to Conservative Party Conference, October 10, 1975

Ceremonial funeral services with military honors for Margaret Thatcher, former prime minister of the United Kingdom, known as Maggie to her friends and the “the Iron Lady” to her opponents, will be held this Wednesday at St Paul’s Cathedral, according to Prime Minister David Cameron’s office.

Thatcher supported President Ronald Reagan and the United States in defeating communism in the Soviet Union and winning the Cold War.

Thatcher had been in declining health for a number of years and died peacefully in her sleep the morning of April 8 following a stroke.

John Boehner, speaker of the house, said, “The greatest peacetime prime minister in British history is dead. Margaret Thatcher, a grocer’s daughter, stared down elites, union bosses and communists to win three consecutive elections establish conservative principles in Western Europe and bring down the Iron Curtain. There was no secret to her values – hard work and personal responsibility – and no nonsense in her leadership.”

The writings of Austrian economist and political philosopher, Fredrick A. Hayek, winner of the 1973 Nobel Prize in Economics, in particular his book, “The Road to Serfdom”, inspired and guided Thatcher’s economic policies.

A concise biography of her life can be found at the Margaret Thatcher Foundation web site http://www.margaretthatcher.org/essential/biography.asp. An excellent multi-part documentary about Thatcher produced in 2008 by the conservative paper, The Daily Telegraph, can be viewed on YouTube as well as an entertaining movie about her early political career titled, “Margaret Thatcher – The Long Walk To Finchley.”

Her husband of more than 50 years, Denis Thatcher, died in June 2003. She is survived by her twin son, Mark, and daughter, Carol, born in 1953.

~Margaret Thatcher, Speech to Conservative Party Conference, October 10, 1975

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