January, 2003
STIMULATING THE ECONOMY: WHAT WORKS AND WHAT DOESN’T
As
the debate heats up over President Bush’s new tax cut proposals, we must wade
through torrents of flawed economic commentary and bash-the-rich rhetoric. Decrying “tax breaks for the wealthy” is the
standard demagoguery used by Democrats and other socialists to deflect more
substantive arguments. The Democrat’s
case to the public rests upon portrayal of two false images, never born out by
the facts: 1) that the majority of taxes are paid by the “little guy,” and 2)
that tax breaks for the lower classes are of greater benefit to the poor and to
economic recovery than tax breaks for rich.
Let’s consider the latest data
on who pays what percentage of the income tax.
The Tax Foundation (www.taxfoundation.org) has constructed tables of
crucial data analyzing what each class of tax payer pays as a percentage of
what they earn. Here are some comments
from their website concerning this data.
“In 1993, at the end of the
‘Decade of Greed,’ the top 1% were paying 28.7% of
all taxes. They earned only 13.8% of all earned income. Oops! sounds like they are paying a bit more than their fair
share, doesn't it? What about the top
10%? They were paying 58.5% of the income taxes but earning only 39% of the
income. The top
50%? Paying 95.2% of
the taxes, earning 85% of the income. The bottom 50%?
Earning only 15% of the income but paying just 4.8% of the income taxes.”
Now for the tax year 2000: “The
top-earning 25 percent of taxpayers earned more than two-thirds of the nation's
income (67.3%) and paid more than five out of every six dollars collected by
the federal income tax (84%) in 2000. There were 32 million tax returns in the
top 25 percent, all with adjusted gross incomes (AGI) over $55,225. The top one
percent of
“At the other end of the income
spectrum, the bottom 50 percent of the nation's taxpayers earned only 13.0
percent of all income in 2000, but they paid an even smaller fraction of the
federal individual income taxes collected - 3.9 percent. The data come from
Tax Foundation Special Report No. 118, titled, "Who Pays the Federal
Individual Income Tax?" by economist David Hoffman.” [End of Tax
Foundation quote.]
The Real Cause
of our Current Declining Economy
Let’s
review the real cause of the current
economic malaise, which is threatening to become a full blown depression. Without understanding the root cause, we
cannot prescribe a solution.
In simple terms, the US and
world economies are suffering from years of excessive growth in money and
credit, as central governments followed doggedly the Keynesian model of pumping liquidity into the markets in order to
stimulate innovation and growth. Has it
worked? Only superficially, and the
consequences are finally hitting home.
To be sure, innovation has boomed, but this innovation has included a
lot of unsound ideas as well, which would not have found funding in a slower,
more discriminating economy. Nearly
anyone with any sort of new idea could find some funding in the 90’s. Growth rates in stocks, especially high tech
or internet companies, went astronomical and couldn’t
be sustained when improper or premature investments began to show their
colors. Individual savings and
conservative investments were stripped to jump on the stock bandwagon, leaving
the economy with few reserves.
Individual and corporate debt skyrocketed, leaving no room for
retrenchment in a downturn.
Notice that in an honest
economy, with a real commodity backed currency, growth is much slower, and
therefore inherently more stable. There
is no money to loan unless someone makes a profit and puts that money into
savings. In an inflationary credit
bubble, however, people’s judgment about risk gets skewed by the high
volumes of money and credit available, and
consequential illusions of permanent growth.
An inflationary credit system is inherently more unstable the larger it
grows, and with growth comes increasing demands for more money and credit to
keep the bubble inflated. The irrational
market days of the 90’s were particularly bad for people’s judgment, because
the Fed made it appear as if growth would be permanent. People became convinced that bear markets
were forever abolished. Remember, this
was supposed to be a “new economy?”
Well, it wasn’t! .
Let’s
analyze precisely why the bubble was not
and could not be sustained. A bubble
is created by the artificial easing of credit and/or direct inflation of the
currency via a variety of paperless mechanisms.
We had both, and still do, judging by the low interest rates and the
Fed’s wide open window for bank lending.
With easy money, the marketplace no longer acts as an effective filter
for bad investments. Look at the credit
card default rate, and yet even poor risk people are still offered multiple
cards. The Fed has made almost unlimited
amounts of money available for loans, and has channeled that easy money to
consumers via bank discount windows, federally subsidized mortgages, and credit
card companies (not to mention billions in “off the books” journal entries for
insider corporations and secret foreign assistance packages). With such extensive credit availability,
millions of marginal borrowers were lured into easy debt. Now, here is the key: that pool of potential borrowers has been
satisfied. Almost everyone capable
of taking on more debt has done so. The
pool is very shallow now. There are few
potential corporate or individual vehicles for monetary expansion in the credit
markets – even at almost giveaway interest rates! This exhaustion of potential borrowers is
what happened to
This is why traditional Keynesian economic stimuli don’t work anymore: they
are all based on the expansion of money and credit, but there are a diminishing quantity of recipients of that credit who can
make stable payments. Lower interest rates? There’s no draw there, with everyone already
loaded up on debt. More direct inflation? This
used to be a “free lunch” policy for the
The Bush Tax
Proposals
The
President’s proposals emerged on
1) Personal
Income Tax Changes: Make all the
income tax rate reductions from the 2001 tax law effective this year—and
retroactive to
Analysis: These are
all good changes, but will not have any immediate effect on the economy. Individuals will have slightly more
disposable income in the near future, which is good. However, research indicates that relatively
small increases in family income do not effectively change people’s investment
or savings patterns – they only increase consumption. Sustaining consumption levels in a declining
economy will slow the fall but won’t turn it around. What is needed is
more resources for capital investments, which are made available through
savings, not consumption.
2)
Business Tax Changes: End the double taxation of dividends. Raise from $25,000 to $75,000 the amount of
equipment purchases that small businesses can write off as expenses.
Analysis: These
proposals will have long term beneficial effects for business growth. The former removes a problematic tax policy
that distorts investment and corporate decisions. A lot of tax games are played to avoid paying
dividends since they are taxed twice.
Here’s a good synopsis from the Tax Foundation: “The most immediate
effect of eliminating the double tax on dividends would be a redirection of
investment into firms that pay dividends.
Many economists believe that investors who receive dividends put less
pressure on companies to achieve short-term increases in share prices, and that
this change will be a positive development in the effort to improve corporate
governance.”
Also, according to the
Foundation, dividends are not just for the rich: “According to the most recent
IRS data, 34.1 million tax returns contained some dividend income in 2000. This
represents 26.4 percent of total tax returns. Dividend income in 2000 totaled $147.0
billion, or 2.3 percent of total income reported by all taxpayers in that
year. Despite widespread belief to the
contrary, dividend income was earned by taxpayers across the income spectrum.
In fact, of all taxpayers that claimed some dividend income in 2000, nearly
half (45.8 percent) earned less than $50,000 in adjusted gross income (which
includes dividends). Moreover, 63.8
percent of those taxpayers claiming dividends earned less than $50,000 in just
wages and salaries.”
Increasing the ability of small
businesses to deduct large ticket expenses would potentially give a healthy
boost if we were in a rising economy. In
this deflating economy, it is doubtful that many small businesses have
sufficient cash flow to make large capital purchases. Most are loaded up to the maximum with heavy
indebtedness already.
Bush should have removed all
taxes on capital gains for a
quick realignment of malinvestments in the
markets. Taxing capital gains really
distorts capital markets and slows down the realignment of investments to more
productive projects. The fear of
subjecting previously earned gains to taxation keeps many investors frozen in
now stagnant companies. At the least,
losses in capital gains ought to be able to directly offset other income immediately. Currently, all gains are immediately taxable
in full, but losses have to be spread over many years.
On a related note, all inheritance taxes should be
removed, permanently. Heavy taxation of
assets that have already been taxed as they were accumulated is a great
injustice. Most large estates have to be
sold just to pay the taxes, which often destroys their economic viability –
especially in the case of family farms.
3) Welfare giveaways: Extend
unemployment benefits to 850,000 people whose benefits expired on December 28th
and make them retroactive to the beginning of December. Allow more than 2.5 million jobless Americans
to receive 13 weeks of unemployment compensation not covered by employer contributions. Extend unemployment benefits for 1.6 million
people from March to June 1.
Analysis: Shoving
money into people’s pockets is direct stimulus to individuals, and one of the
least effective ways of turning around an economy. It prolongs consumer spending, but in today’s
deflating bubble it will create no net new jobs, but will only slow down the
rate of job loss. This is redistribution
of income at its worst, being done at taxpayers’ expense. It is politically popular with the
benefit-corrupted majority, but is a violation of the productive class’s right
to own and control their hard-earned property.
If government creates the money rather than taking it from taxes, the
effect is mildly inflationary (which benefits only the first recipients of new money--later users of money pay higher
prices).
4) Employment Gimmicks: Create Personal Re-employment Accounts,
providing unemployed workers with up to $3,000 to use for job training, child
care, transportation, moving costs, or other expenses associated with finding a
new job. A person who gets a job within
13 weeks would keep the leftover funds as a re-employment bonus.
Analysis: This
proposal superficially provides various incentives to go out and get a job
quickly. The trouble is, it adds a significant level of complexity to reemployment,
as well as more layers of state and federal bureaucracy to manage the
program. Additionally, it distorts the
marketplace by inducing people to go get any job, just to qualify to receive
the bonus. I see a lot of room for fraud
and wasteful bureaucracy here.
The Really Big
Solution
The
economy is in trouble because it is stagnant and hog tied with debt. A giant negative multiplier is in effect,
destroying more jobs than the government can stimulate by direct handouts, so
the downward cycle continues. With each
job loss there is less money spent in the economy, and other businesses on the
margins of profitability fail due to declining activity. There is still much innovation ready to be
developed, but potential profit margins are so small in a deflationary scenario
that few can qualify for more borrowing.
Few have excess capital on their own to finance new business
endeavors. Under these circumstances the
single largest impediment to new business and new job formation becomes the
HIGH COST OF HIRING EMPLOYEES. It
isn’t only the cost of the employee’s wages and benefits, but the whole new
level of regulations and accounting requirements that must be dealt with in
even hiring one employee. When hiring a
first employee presents a huge obstacle, proportional to the benefit, economic
growth is stunted constantly. There are
millions of self-employed people who choose to work alone, without any
employees, merely because this barrier to hiring is so high.
It is my thesis that the flawed
practice of government attempting to protect employees from market forces of
competition, by increased mandates on employers, is the single most
significant barrier to new job formation – and has been for many
years. In an inflating bubble economy,
small businessmen simply bite the bullet and pay for huge employee costs, and
pass those costs on to their consumers or clients. This is no longer as easy to do as profit
margins fall. Even large corporations
grew fat and inefficient during the bubble years. It will be years before they can pare down
costs sufficient to afford new employees.
In a deflationary scenario, we
need to stimulate massive small time hiring at the micro level of the
economy. The plethora of small jobs
thereby created can potentially absorb millions of the unemployed from large
corporations (albeit at lower salaries) and begin the process of filling in the
legitimate holes in the economy (business opportunities left
unfulfilled) due to the excesses of the past--which tend to favor big corporations.
Here’s what I propose: Immediately, do away with all government
mandated tax and regulatory restrictions on the hiring and firing of employees. This means, first, no more requirements for the withholding of income taxes
and social security taxes by the employer (each employee would do their own
just like the self-employed). Yes, it
would be better to do away with the income tax and social security all
together, but at least making each person experience paying the full price for
those taxes is a first step in making them still more unpopular. Second,
eliminate the requirement for the employer to pay workman’s compensation;
workers can pay for it themselves if they want it. Third,
do away with the minimum wage, which only serves to marginalize those workers
whose value falls below the arbitrary wage-rate threshold. Forget about the much heralded necessity that
every person have a “living
wage.” Almost a third of the labor
market share some living facilities with others and
don’t need a full living wage. Fourth, eliminate all paperwork and
reporting to the government, currently huge barriers to the creation of new
jobs. Employment contracts between
private parties should be just that – private.
Lastly, strike down all
anti-discrimination laws and forced collective bargaining laws. Allow private employers to hire or fire at
will, bounded only by their own contractual agreements.
Think how many self-employed
people would suddenly feel free to hire one or two assistants. Think how easy it would be to create a
start-up company and join forces with others if entrepreneurs didn’t have to
deal with complex accounting structures.
Think how many millions would be hired as domestic workers – a market
almost non-existent in the
I admit this proposal is politically improbable now, but as the recession deepens people will
begin to see that a truly free labor market offering more jobs at lower wages
is better and has more potential upside than a protected labor market with few
new jobs at all. Meanwhile, an interim
political solution may be to get Congress to pass an exemption from all
withholding and regulations for companies with less than 50 employees, or even
10 employees – whatever can be had. That
would provide a foothold in the market to show just how vibrant this new sector
would be.
STRANGE PROSECUTION OF HUGHES
AND BOEING
The
State Department has filed a 32-page document with a federal administrative
judge charging Hughes Electronics and Boeing Satellite Systems with illegally
transferring sensitive military technology to the Chinese. The notorious Loral Corporation was also part
of the investigation but was not charged after it agreed to cooperate with the
State Department and pay millions of dollars in fines. The two companies are being punished for
having the audacity to challenge the government’s 123 count indictment.
It
is treasonous, but there’s more to the
story than what the Washington Post revealed this week. What the Post didn’t say was that Hughes
Aircraft was encouraged to open its plant to the Red Chinese clear back in the
late 80’s on orders from former President George Bush. Chinese generals and scientists were given
free access to the most sensitive areas at Hughes – areas that required top
secret clearances for US employees and engineers. Hughes employees were so upset at this
obvious betrayal of national security that they threatened a walkout. Rather than confront its employees, Hughes
decided to cancel all work on Saturdays and give the Chinese full access on
that day, so that irate employees would not witness the continuing
sellout.
Both
Hughes and Boeing know that they have been granted special “look the other way”
exemptions by the current Bush administration Commerce Department that oversees
all technology transfers. Savvy
observers in
Frankly,
I’m not sure this indictment is for real.
It may well be a ruse to allow the State Department to build up a few anti-Communist
points to offset evidence of decades of pro-Communist support. The Justice Department may well be preparing
to undermine the indictment in some plea bargain. If the case goes to trial, Hughes may be able
to produce Commerce documents giving it an exemption. If nothing else, Hughes and Boeing may settle
as Loral did. All these companies know
they will get additional US export-import loans and federal contracts to more
than make up for any fines they agree to pay as part of a settlement.
One
thing I am sure of: the aid and trade to
ASHCROFT AND BUSH STILL
ADAMANT ABOUT DENIAL OF HABEAS CORPUS
The
Bush administration continues to petition
Judge Michael Mukasey (Federal District Court in Manhattan), to
overturn his decision to allow citizen Jose Padilla access to an attorney--even
though he has been held in a Navy brig in Charleston, S.C., without being
charged, for months. .Padilla, designated an “enemy combatant” has been
undergoing months of daily interrogations by military and justice department
officials without the minimal constitutional recognition of his civil rights.
Judge Mukasey is no friend of the
constitution even though he ruled that Mr. Padilla could consult with
lawyers. Government appointed attorneys
can screw up anyone’s case. More
importantly, the judge affirmed the President’s power to detain enemy
combatants and said the government needed to make only a “minimal showing to
justify such actions” --without stipulating what those actions might be. The government goes to judges they own to
ensure a favorable ruling. In turn,
these controlled judges give token or partial rulings in favor of the
Constitution to preserve the facade of judicial integrity and
independence. Then they often allow
their token opposition rulings to be overturned later while the public isn’t
watching. Sometimes, as in this case,
they simply don’t sanction the government for failing to abide by the ruling. That’s how judge Royce Lamberth keeps stringing
Judicial Watch along, appearing to be sympathetic to their attacks on
Bush administration cover-ups. Neat trick.
MORE COVER-UPS FOR ENRON BANKERS
J.P. Morgan Chase & Co
officers were brought before a grand jury in
First,
observe who the District Attorney handling the jury is: establishment insider
attorney Robert Morgenthau,
who has been investigating the Morgan role in Enron's collapse since last
year. Second, Morgan Chase is no bit
player in the scheme to protect insider connected corporations from
violations of tax and accounting rules ordinary companies and individuals
are required to obey. J.P. Morgan and
its larger clone Citibank were up to their necks in providing the financial
arrangements and safe havens that allowed Enron to transfer millions in profits
to illegal offshore tax accounts of its partners. Both banking houses are as guilty as Enron
of violating reporting requirements and money laundering. Bringing them before the Grand Jury was
necessary to give the appearance of a vigorous investigation. But all the big players will get a pass in
the end.
ECONOMY—THE CASCADING EFFECT OF INCREASING EVICTIONS
AND FORECLOSURES
Apartment dweller evictions
nationwide are increasing at an exponential rate. From 1998 to 1999 evictions rose only
5%. They rose 15% in 2000 and 16% in
2001. The figures for 2002 are projected
to increase by a whopping 20% and the rate of increase is still increasing each
year. Foreclosures are following a
similar rate of increase, as are personal bankruptcies. Renters delinquent for more than three
months’ rent almost always declare bankruptcy rather than make good on their
debts. Clearly, bankruptcy laws are
still too lenient. Increasing rates of
default in these crucial areas of the economy are solid evidence that we
haven’t seen the bottom yet. Talk of a
recovery is very premature.
A lot of conservatives have
been intrigued by the promises of fiscal reform touted by NESARA, the National
Economic Stabilization and Recovery Act.
See www.nesara.com for an overview
of this proposed legislation. In
essence, the website promotes the notion that our fiscal problems can be solved
by taking control of the money supply away from the private Federal Reserve and
giving it back to Congress where it belongs.
Constitutional conservatives are especially vulnerable to this trap,
thinking that the power given to Congress to “regulate the value of money” is
equivalent to regulating the supply of money and credit. In fact, the
Constitution grants no such powers. By
“regulate the value of thereof (money),” the founders were only referring to
the prerogative of Congress to fix the value relationship between gold and
silver coinage. They wanted no fiat
money powers in the US Constitution, being all too aware of the financial
disaster caused by the issuance of worthless revolutionary script
(Continentals).
NESARA thinkers understand
that Congress can be tempted to print too much money, so they propose the
creation of a special index that is linked to a law mandating that the money
supply be kept within a certain growth range.
Good theory, but impractical without an understanding of the current
state of addiction of all facets of our economy to false injections of money
and credit. Congress simply would never
have the guts to face the uproar that would follow a serious restriction of the
money supply.
It is
a step in the right direction to eliminate the Federal Reserve, but the
promoters of NESARA are woefully naïve about what effects the new law would
have. They also have a seriously
misplaced trust in the political will of elected representatives to take the
heat in a sudden shift to a policy of fiscal restraint. Real restraint would be very painful to our
bubble economy. It is my estimate that
over a third of the current economy is driven by money and credit creation that
would not exist in a true free market.
NESARA claims to eliminate inflation, but it does no such thing. True, inflation would be restrained by law,
but as long as a government has the power to create any money at all that is
not backed 100% by an exchangeable commodity, the resulting creation of fiat
currency is always inflationary and robs existing holders of currency of some
of their money’s value—especially those who receive some of the new money long
after prices have adjusted upward. Even
in a deflationary depression, fiat money takes away a portion of those downward
prices, so that people are robbed of a portion of the benefits of deflation (a
process totally invisible but real).
There
is an ongoing internet hoax circulating around the Internet concerning
NESARA—and I’m not referring to the excessively optimistic claims of NESARA
(that it would create immediate world peace, world freedom, and world
prosperity). The real hoax is an attempt
to claim that NESARA has secretly been passed by Congress and that there is a
conspiracy to keep the public from knowing about it. There are plenty of real conspiracies about
without muddying the waters with disinformation. The following two statements have been widely
propagated by email:
“1) NESARA was passed secretly
by U.S. Congress on
2) NESARA was ordered by 1993
U.S. Supreme Court and
Both of these statements are
patently false and without any substance whatever. They are certainly not supported by the
material on the official NESARA website, which states that as of
The American people were
denied any meaningful rebuttal to the President’s State of the Union address to
Congress. Predictably, the Republicans
responded with nothing but enthusiasm and blind support for Bush’s
statements. The Democratic response was a pathetic combination of maudlin appeals
to minorities, me-too yesmanship on
I am particularly disturbed
by the increasing lack of honor and
dignity of Congress in allowing itself, through mindless pomp and
circumstance, to be turned into a manipulating propaganda machine on behalf of
a sitting president. State
of the Union speeches are fraudulent from start to finish. They are never the original work of modern
script-reading Presidents (who are chosen more for their slavish loyalty to the
control system than for their abilities).
Hack ghost writing committees mix the dry substance of political
proposals with melodramatic and grandiloquent phrases (borrowed from far
superior writers like Winston Churchill, who, despite being a deceptive,
manipulating globalist, did have real talent) to
induce applause and standing ovations at regular intervals.
When a person makes verbal
appeals to high minded and lofty principles, invoking the name of God for
support, conscience demands that hypocrisy and ulterior motives be absent. When grand eloquence is used to cover for grand
lies, the judgments of God are not far behind. We have had three artful dodger presidents in
a row fronting for globalist aims, while pretending
to be God-fearing protectors of the Constitution. It is time for conservatives to stop viewing
their Republican leaders with rose colored glasses and start critically
analyzing the half truths and multi-faceted deceptions that are being foisted
upon them to undermine all we hold dear.
The State of the Union address is the epitome of manipulation and
deception, being specifically contrived for those purposes alone, and
must be virtually picked apart line by line to expose all its dangerous
fallacies. Here I will examine Bush’s
latest address point by point, including my analysis and rebuttals in [brackets]. Readers will soon get a clear perception of
the extent and depth of deception and double-speak inherent in this speech, and
indeed, in every public address by our establishment-controlled President.
“You and I serve our country
in a time of great consequence….we will answer
every danger and every enemy that threatens the American people. [This is pure bravado, meant only to elicit
applause and garner the emotional, unthinking support of the people. No leader can guarantee an answer to every
danger to a nation, but the real deception here lies in the true intent of Bush
to take his nation into a war that will eventually result in a huge retaliatory
attack on America.]
“In all these days of promise
and days of reckoning [strange mix of
conflicting adjectives], we can be confident. In a whirlwind of change, and hope, and
peril, our faith is sure [it is
particularly offensive to God when politicians invoke allusions to faith or God
to elicit support for evil causes],
our resolve is firm, and our union is strong. [Bush’s reference to a strong union is anachronistic. The feds have long since removed any
potential for state rebellion or official disunity.]
“This country has many
challenges. We will not deny, we will not ignore, we will not pass along our problems to other Congresses, other
presidents, and other generations. [This
statement is patently untrue and knowingly deceptive. Every president who commits this country to
billions in deficits, as Bush will do in this speech, knowingly passes on the
costs to future generations. In fact,
all of his “solutions,” whether about Social Security, Medicare, education,
foreign aid, or welfare, are doomed to failure, no matter what their version.
The problem keeps getting worse with each administration, whether Republican or
Democrat.] We will confront them
with focus, and clarity, and courage. [Time
will prove him deadly wrong.]
“During the last two years,
we have seen what can be accomplished when we work together. To lift the
standards of our public schools, we
achieved historic education reform which must now be carried out in every
school, and every classroom, so that every child in
“To protect our country [which wasn’t the real purpose], we
reorganized our government and created the Department of Homeland Security which is mobilizing
against the threats of a new era. [In
fact, it is preparing to mobilize against the inevitable domestic backlash from
constitutional conservatives and civil libertarians to this new form of federal
tyranny.] To bring our economy out of
recession, we delivered the largest tax relief in a generation. [This obviously didn’t achieve Bush’s stated
purpose, though I believe it is helpful.]
To insist on integrity in American business, we passed tough reforms,
and we are holding corporate criminals
to account. [This is an outright
falsehood. No one of any significance
has been prosecuted. All the big
fish, such as Enron chief Ken Lay and other executives at Global Crossing and
WorldCom, have been protected from meaningful prosecution — because they are
among the insiders to a secret government-corporation partnership for global
governance.]
“Some might call this a good
record. I call it a good start [a pack of
lies and half truths would be more accurate]. … We must have an economy that grows fast enough to
employ every man and woman who seeks a job. [Actually, labor is always in short supply even during a depression,
though this fact is masked by the artificial surplus of labor created by the
forced maintenance of abnormally high wages.
Thus the problem is more accurately a matter of not enough high
paying jobs, because the economy is contracting from an ongoing cycle of
government-induced excess. If wages were
allowed to contract along with the economy, the labor surplus would quickly
disappear, and recovery would be much faster.]
“After recession, terrorist
attacks, corporate scandals, and stock market declines, our economy is recovering [not true according to most government data]
– yet it is not growing fast enough, or strongly enough. With unemployment
rising [a contradiction of his statement
on recovery], our Nation needs more small businesses to open, more
companies to invest and expand, more employers to put up the sign that says,
Help Wanted. [As I pointed out in a recent brief, the single biggest inhibition to
hiring new people is the government-imposed costs of employment — taxes, Social
Security, withholding, insurance, unemployment compensation. These costs are particularly restrictive to individual
entrepreneurs looking to expand their operations and hire employees. There are millions who could hire, but won’t
do so due to the high cost of regulation.
The Bush plan does nothing here.]
“Jobs are created when the economy grows [circular reasoning]; the economy grows when Americans have more
money to spend and invest [this is a Keynesian
idea. In truth, the economy grows when
people make more than they consume, in real terms. Inflation of the money supply by government
provides the illusion that people have more money to spend and invest, but that
illusion is always temporary and is detrimental to long-term economic growth];
and the best, fairest way to make sure Americans have that money is not to tax
it away in the first place [true—but Bush
wants it both ways: cut taxes and raise spending on a massive scale. So, it’s a lie that he doesn’t intend to pass
our problems down to the next generation].
“This tax relief is for everyone who pays income taxes and it will help
our economy immediately. [It will not in
itself lead to economic recovery, but will merely slow the continued
contraction. However, this is good, because the longer a severe collapse is
avoided, the more time the economy has to adjust to reality.] If this tax
relief is good for Americans three, or five, or seven years from now, it is
even better for Americans today [true
enough].
“We also strengthen the
economy by treating investors equally
in our tax laws. [It’s not just investors that should be treated fairly, but all
taxpayers. It is grossly unjust that the
top 50% of taxpayer pay over 90% of all taxes.] It is fair to tax a
company's profits. It is not fair to again tax the shareholder on the same
profits [absolutely true].
“Lower
taxes and greater investment will help this economy expand [true]. More jobs means
more taxpayers and higher revenues to our government. [This
is a socialist view and should never be a legitimate goal of government. The proper goal of government taxation should
be to extract from the private economy the least amount possible to satisfy its
mandate to defend fundamental rights.]
The best way to address the deficit and move toward a balanced budget is
to encourage economic growth and to show some spending discipline in
“A growing economy, and a
focus on essential priorities, will also be crucial to the future of Social Security. [Yes,
Bush wants economic growth to help postpone the inevitable death of the SS Ponzi scheme. The SS
system pays out too much to current beneficiaries and will at some point go
bankrupt to the detriment of future beneficiaries. Even so, no
“Our second goal is high
quality, affordable health care for
all Americans. [Affordable health care in
The American system of medicine is a model of skill and innovation with
a pace of discovery that is adding good years to our lives. [This
is only partly true. A good portion of
the longevity achieved by Americans is being enjoyed by the full third of
Americans who are turning to better nutrition, vitamins, minerals, herbs and
alternative therapies to achieve better health.
Those who stay within the established system become ever more dependent
upon drug therapies which all have deleterious side effects.] Yet for many people, medical care costs too
much [it costs too much for everybody!] and many have no coverage at
all [there should be – but is not – a
clear distinction made between those who want medical coverage but can’t afford
it, and those who choose not to purchase establishment medical coverage
but to rely on nutrition and alternative therapies to address the majority of
their health issues]. These problems will not be solved with a nationalized
health care system that dictates coverage and rations care [true, but what Bush is proposing will result
in the same type of control, while avoiding the term “nationalized care”]. Instead, we must work toward
a system in which all Americans have a good insurance policy [this is very deceptive. Insurance companies are where the control
occurs. They almost always refuse to pay
for anything outside the establishment system — even when its
cheaper], choose their own doctors [he
isn’t including alternative practitioners here], and seniors and low-income
Americans receive the help they need [more
welfare socialism, and more spending — in the billions].
“Health care reform must
begin with Medicare, because Medicare is
the binding commitment of a caring society. [Yes, Medicare is binding, but it is morally wrong! It is the bondage commitment for a society
becoming ever more socialist. In
contrast, the hallmark of a caring, free society is voluntary charity
hospitals.] We must renew that commitment by giving seniors access to the
preventive medicine and new drugs that are transforming health care in
“Seniors happy with the
current Medicare system should be able to keep their coverage just the way it
is. [This is simply a political sop to
quell any potential discontent from Seniors too
fearful of changing proposals. Seniors
have become the single biggest welfare corrupted voting block. The Bush speech writers wanted to make sure
there wouldn’t be any backlash here.] And just like you, the members of
Congress, members of your staffs, and other federal employees, all seniors
should have the choice of a health care plan that provides prescription drugs. [Interesting comment. If
the public knew what kind of perks Congressmen have in terms of cradle to grave
pensions and healthcare — without having to pay for SS — they would be outraged
in comparison.] My budget will
commit an additional $400 billion over the next decade to reform and strengthen
Medicare. [This amount is grossly understated, as are all socialist foot-in-the-door
programs. Eventually everyone will
demand subsidized drug prices and the cost to taxpayers will go up to
astronomical proportions.]
“No one has ever been healed
by a frivolous lawsuit and I urge the Congress to pass medical liability reform. [The
problem isn’t frivolous lawsuits, which are very few. Most medical lawsuits are based on real
damage to people done by doctors making mistakes or by the damaging side
effects of drugs. Just as Bush has been
pushing for immunity for vaccine manufacturers, he wants limited immunity for
the establishment medical community as well.
I do not favor giving any sector blanket immunity from liability, though
there ought to be limitations on obscenely high damage awards. The way juries are selected now, only the
most manipulable persons are chosen to pass judgment
on a case. The judicial system has
written its own (unconstitutional) rules about jury selection, and has given
judges too much power to control what juries may decide.]
“Our third goal is to promote
energy independence for our country, while dramatically improving the
environment. I have sent you Clear Skies legislation that mandates a
70 percent cut in air pollution from power plants over the next 15 years. [I’m skeptical. Power plants are already very clean and
represent a very small fraction of air pollution. I think he’s driving at pacifying the global
warning crowd by including carbon dioxide in this list of “pollutants”.]
I have sent you a Healthy Forests Initiative, to help
prevent the catastrophic fires that devastate communities, kill wildlife, and
burn away millions of acres of treasured forest. [If he is talking about emphasizing good logging practices, I’m all for
it. Forests are meant to be harvested
and renewed over time. But I think he is
hiding something. His forest service
bureaucrats were responsible for much of the damage caused by fires last year,
because of their refusals to allow private contractors to help put out fires
free of charge. Now, bureaucrats in the
Department of the Interior are still refusing to allow logging companies to log
burned out forest areas—a practice that has added insult to injury in the
devastation wrought upon the land. The
standing, limbless trees are simply left to rot. The radical environmental movement still
controls most of these bureaucratic positions in government, and Bush has used
none of his executive authority to cause these departments to change their
policies.]
“Tonight I am proposing 1.2
billion dollars in research funding so that
“For so many in our country –
the homeless, the fatherless, the addicted – the need
is great. Yet there is power, wonder-working power, in the goodness and idealism and faith of the American people. [I tire of Bush
continually confusing “the power of goodness, idealism and faith” with
government coercive taxation to fund more welfare schemes. This is not charity. This is confiscation at the point of a gun.]
“Americans are doing the work
of compassion every day visiting prisoners, providing shelter to battered
women, bringing companionship to lonely seniors. These good works deserve our
praise; they deserve our personal support; and, when appropriate, they deserve
the assistance of our government. [I’ve
never seen an instant when Bush didn’t think it appropriate to insert
government into the ever more controlling equation.] I propose a $450
million initiative to bring mentors to more than a million disadvantaged
junior high students and children of prisoners. [I can’t think of a more inappropriate and unconstitutional venue for
government (which has a self-declared mandate to push non-discrimination in
hiring) than to provide bureaucratically selected and trained “mentors” for
disadvantaged children. You all know
where this will lead.]
“Another cause of
hopelessness is addiction to drugs.… Too many Americans in search of treatment
cannot get it. So tonight I propose a new
$600 million program to help an additional 300,000 Americans receive
treatment over the next three years. [So
we spend billions on a fruitless effort to stop drug trafficking, even though
the government is deeply involved in the trade, and now the taxpayer is
required to fund treatment? Again, this
program both fails to solve the problem, and transfers billions of taxpayer
dollars to the purveyors of false solutions.]
“The
qualities of courage and compassion that we strive for in
“The American flag stands for
more than our power and our interests. [The flag doesn’t stand for our power and
interests, but rather for the cause of liberty of the original 13 colonies.] Our Founders dedicated this country to the
cause of human dignity, the rights of every person, and the possibilities of
every life. [This is a devious
interpretation heading his listeners toward embracing a policy of globalist intervention — which the founders soundly
rejected.] This conviction leads us
into the world to help the afflicted, and defend the peace, and confound the
designs of evil men. [Yes, as
individuals, but certainly not on a national scale as global cop, harnessing
others’ wealth to overthrow governments not a direct threat to American liberty.] In
“In the
“There are whole countries in
“Ladies and gentlemen, seldom
has history offered a greater opportunity to do so much for so many. [This is a borrowing from Churchill’s famous
words concerning the British pilots who defended
“And this Nation is leading
the world in confronting and defeating the man-made evil of international terrorism. [Untrue. The
“To date we have arrested, or
otherwise dealt with, many key commanders of al Qaeda. [These are pronouncements without any independent verification. We know nothing about al Qaeda
except what the
“We are working closely with
other nations to prevent further attacks.
“We have the terrorists on
the run, and we are keeping them on the run. One by one, the terrorists are
learning the meaning of American justice. [Sadly,
terrorists are not on the run, but are still free to grow and continue
operations. Terrorism in the
“This government is taking unprecedented measures to protect
our people and defend our homeland. [Unprecedented, yes — but not to protect! The core elements of the
“I ask you tonight to add to
our future security with a major research and production effort to guard our
people against bio-terrorism, called Project
Bioshield. [This
must be another pro-vaccine funding boondoggle that will generate billions for
insider vaccine companies (already granted blanket immunity for their
questionable work). Different strains of
bio-toxins are manufactured constantly.
There is no way any of the vaccines on the market today are going to be
effective against the full range of changing toxins.]
“I am instructing the leaders
of the FBI, Central Intelligence, Homeland Security, and the Department of
Defense to develop a Terrorist Threat
Integration Center, to merge and analyze all threat information in a single
location. [He forgot to mention one of
the main components of this new organ: DARPA’s Information
Awareness Office (IAO), the new and dangerous domestic surveillance arm of
government.]
“In the ruins of two towers,
at the western wall of the Pentagon, on a field in Pennsylvania, this Nation
made a pledge, and we renew that pledge tonight: Whatever the duration of this
struggle, and whatever the difficulties, we will not permit the triumph of
violence in the affairs of men – free people will set the course of history. [This is simply more bravado coupled with an
applause generator. They are hollow
words of doubtful integrity in light of what we know about US government
foreknowledge of and failure to respond during 9/11.]
“Today, the gravest danger in
the war on terror, the gravest danger facing
“Throughout the 20th century,
small groups of men seized control of great nations [through the deliberate assistance of major
“Now, in this century, the ideology of power and domination has appeared again [furthering the lie that Communism has been defeated, and that our only threat is rogue dictators], and seeks to gain the ultimate weapons of terror.