As
the country is reeling from the electoral loss and the re-election of President
Obama, half rejoicing and the other half in stunned disbelief, the economic
reality is beginning to sink in.
People
chose the promise of Santa Claus and Christmas every day of the year.
Government Santa is likely to slow down in delivering unearned freebies as the
economy worsens.
The
Dow Industrials reacted immediately to the re-election by dropping more than
300 points. All other indexes also dropped more than 2 percent the next day.
The finance and energy sectors will be the hardest hit by the promised
increased regulation.
De-developing
America has been a stated goal of the President’s platform during the first
campaign by increasing energy costs through the bankruptcy of many coal plants
via onerous EPA regulations.
Republicans
are co-culprits to the de-industrialization of America. They approved NAFTA,
GATT, WTO, and allowed free trade with China. Multi-national corporations moved
their factories overseas, fired workers, destroyed 6 million manufacturing jobs
in the U.S. and moved 55,000 factories out of the U.S. (Patrick J. Buchanan,
“Is the GOP Headed for the Boneyard?” November 8, 2012)
The
stranded homeless from Hurricane Sandy in New Jersey and New York are poorly
cared for, electricity is still absent in many areas, and the infrastructure
damaged from the storm surge is at least eight months away from being repaired.
To make matters worse, a cold front and a virus outbreak in the FEMA camp is
exacerbating the misery.
The
divided government, the Democrat controlled Senate and White House, and the
Republican controlled House, has many challenges to address. The “fiscal cliff”
and reaching the debt ceiling are the most immediate.
On
January 1, 2013 the Bush era tax cuts will expire and new higher taxes will
take effect, a total of $500 billion, affecting individuals, families,
struggling small businesses, and investors. In such a climate of more taxation
and lower business confidence, it will be very hard to create jobs. The Obamacare
mandate and penalties will additionally force many businesses to make painful
layoffs – resulting in higher unemployment.
Massive
budget cuts to the military will be automatically enforced through
sequestration, a legislative tactic to hold the military budget hostage to the
tax increases that Democrats and the administration wish to enforce. Cutting
the military drastically and its budget at the time when the Middle East is a
basket case, North Korea, China, Russia, and Iran are exercising their military
muscles, is not a very safe idea.
Speaker
Boehner’s tax reform plan to lower tax rates and eliminate certain tax
deductions would lead to higher economic growth than the current anemic 2
percent, resulting in more tax revenues. Raising tax rates without cutting
spending is not a viable option. The Speaker of the House believes that
“shoring up entitlements and reforming the tax code to bring jobs home” would
go a long way to increase economic activity and raise revenue.
Democrats
in Congress are eager to raise taxes and continue deficit spending to stimulate
the economy. Keynesian economists, who believe it is the government’s job to smooth
out the fluctuations in the economy, would choose government spending and tax
breaks to stimulate the economy in bad times.
The
Washington Post’s Steven Mufson has a bolder suggestion to solve the problem of
out-of-control deficit spending that Congress has engaged in: pass a carbon tax
to raise enough money to bring the budget deficit under control. “Climate
activists hope a carbon tax would reduce greenhouse-gas emissions by penalizing
the use of coal, oil, and natural gas.” (Carbon Tax getting closer look,
November 10, 2012)
Mufson
quotes William Pizer from Duke who said that a “$20-a-ton tax on carbon dioxide
would raise gasoline prices by about 20 cents per gallon and boost electric
bills slightly.” The tax would take place “upstream, at coal mines, oil and gas
wells, or terminals for oil tankers at U.S. shores.”
The
problem is that higher gasoline and electricity prices would fall on those who
can ill-afford them because average Americans spend a larger percentage of
their incomes on gasoline and electricity. Companies who export to countries
that don’t have carbon taxes would have to be given subsidies in order to
compete, more government spending of taxpayer dollars we do not have. Liberals
forget that there is also on-going carbon trading in California and the
northeastern part of the United States. The environmentalists proposals to tax
CO2 emissions is nothing more than a get-rich scheme for those in power, and a
sure way to raise cash for more spending, it has nothing to do with the environment
or saving the planet, it resembles more environmental piracy.
Jeff
Flake (R-Arizona) co-sponsored a carbon tax bill in 2009 but now “has no plans
to reintroduce it or support it as part of a tax reform package.” The American
Petroleum Institute opposes the carbon tax on grounds that it will constrain energy
production and it will impact the American people by increasing costs.
Add
all the EPA onerous new regulations and you have a recipe for economic
disaster. It does not matter to liberals that China and India would continue
polluting with a vengeance. As long as our polluters are taxed, which in turn
will pass these taxes to consumers, the budget deficit gap will be solved –
until liberals run out of money and the debt ceiling must be raised again or
another scheme will be devised to bring in more revenue.
If
the fiscal cliff is not averted, the fiscal crisis will be accompanied by
higher unemployment, higher inflation, higher food and energy prices, and
higher interest rates. Republicans will have to cave in to Democrats because
all the subsequent pain the American public will experience will be blamed on
Republicans. After all, we’ve been hearing for the past years every day,
everything is Bush’s fault and President Obama inherited a mess from President
Bush.
Hurricane
Sandy gave mayor Bloomberg a fresh excuse to promote global warming and his Agenda
21 plan for New York. EPA can step in and limit CO2 from power plants and other
sources through executive orders. Expensive renewable energy will be pushed
again at the forefront in spite of the 12 or more bankruptcies that occurred in
the last four years. Corn will be taken out of the food supply and put into
bio-fuels, including a new brand of Diesel mixed with rapeseed oil that
Europeans are already using, DieselMaxx.
According
to Paul Driessen, “Billions of dollars in taxpayers’ subsidies continue to flow
each year to bureaucratic zealots, environmental pressure groups, universities,
and other organizations. These dollars fund junk science, strained
justification for indefensible rules, more pressure to regulate for
increasingly diminished returns, and outright propaganda.” (Green agenda threatens
economic future, Washington Times, November 8, 2012)
Americans
are perennially optimistic and that’s a good thing. Fifty percent of Americans
are also extremely gullible and believe in government as Santa Clause. They
refuse to accept the fact that “fundamental change” is inevitably
life-altering, cannot be reversed, may not have a quick fix, or may not have a
fix at all. It is not a piece of merchandise that you can return to the store
later if dissatisfied.
When
faced with pessimism, Americans react by either verbally shooting the messenger
with personal insults or discounting experienced opinion as ranting or
defeatist attitude. We are Americans and we can fix everything. President Obama
is going to help all poor people by giving them the opportunity to succeed.
Somehow before Obama arrived on the world stage, the opportunity to succeed did
not exist.
I
live in Realityville and have observed carefully the European Union and its
disastrous socialist economic policies and multiculturalism. These policies are
finally bearing fruit in the U.S. We are a new country today, following into
the footsteps of the failed lab experiment of the European Union, including the
proposed carbon taxes, a form of environmental piracy.
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