Obama Cuts Obama’s Fault, Part 5, The Answer

Jul 23, 2011 by Editor Fred D

Keynesian economics, Statism, increased taxes, the drugs, and on it goes, however the only thing that is missing is something that works. We look to Galveston and other areas for what has works. We see those things that have not worked simply by looking at California, Greece and other areas. The trick is learning the lesson.

Progressive

Looking at Greece and their over burdened entitlements system and massive debt; the European Union has had to step-in and not just for a bailout but for a second bailout. The European Financial Stability Facility and the International Monetary Fund have agreed to loan €109 billion ($156.5 billion) over the next 3 years at 3.5 percent interest. Greece debt to GDP ratio is expected to be 161% in 2012. Private bond holders will be allow to convert short term bonds to long term bonds so that Greece will not have to make the cash payments.

Could the United States come the point of Greece’s austerity plan, like below:

Tax Increase
- A solidarity levy: Extra income tax.
- A lower tax-free threshold: Taxes begin on lower income level.
- Sales tax: VAT increase from 13 percent to 23.
- Wealth taxes: Levies on luxury items.

The changes should bring in an extra €2.32bn ($2.32 billion) this year, rising to €3.38bn ($4.85 billion) in 2012, €152m ($218.26 million) in 2013 and €699m ($1.003 billion) in 2014.

In addition, the Greek government has pledged to combat tax evasion, which it believes will bring in an extra €1.15bn ($1.65 billion) by 2015. Some legal tax exemptions are also being closed.

Spending cuts
- Public sector wages: Salaries reduced.
- The public sector wage bill: Cut 150,000 public sector jobs.
- Social benefits and pensions: Retirement age raised and means testing.
- Spending cuts: Government department, defence, and health.
- Social contributions: National insurance rate increase.
- Public investment: Spending reduced.
- Privatizations
  - Selling state assets.

Greek Problem

The Greek Government is taxing everyone and thing. If their citizens are like those in the United States the increase in taxes will just drive the well-off out of the country. Progressives cannot even get their own to pay these taxes, see Luxury Tax section, not to mention that companies lose sales.

Solution

The TEA Party has a solution that has worked several times in the past. Only spend what you have money to spend. Government spending programs, such as a stimulus and certain research only remove money from the private sector for a one time punch. Afterward that is it, no further benefit.

Coolidge said it best “the chief business of the American people is business.” He is often misquoted as saying that “the business of America is business.” This problem can only be solved by wealth creation. That in turn will create additional tax revenue and most importantly jobs.

By maintaining tax revenue on the upswing of the Laffer Curve, see videos here, the government would position itself to allow maximum growth and faster revenue growth. It could be similar to the growth under President Harding and President Coolidge. The TEA Party is not here to destroy all of government but to save it and the commitments to her citizens.

Government, like a business, must make cuts in order to keep from imploding. A smart CEO would make cuts and streamline a business. That way minimizing impact on shareholders and yet still being able to deliver product and/or services to its customers; at a time when its sells or revenue are down.

Obama Cuts Obama’s Fault, Part 4, Galveston Plan

Obama Cuts Obama’s Fault, Part 3, Drugs

Obama Cuts Obama’s Fault, Part 2, Fractal

Obama Cuts Obama’s Fault, Part 1

Obama to Withhold Grandma’s Check

Millionaires Go Where

Debt Limit Gauntlet

Obama and His Deficit Mess

Obama Declares You, Millionaire

Department of Redistribution: Time has come?