Tax and Spend

An economic analyst working for the State Department predicts US debt will be downgraded again.

The US has more debt per capita than Italy, Greece, France, Spain or Portugal.

Study reveals the obvious: tax hikes drive economies into recession and spending cuts drive economies into recovery.

After endorsing Obama, Bloomberg says raising taxes on the rich is stupid because they will leave.

Gary North thinks Boehner won't compromise with Obama to avoid sequestration, but he already said he would. I think Boehner is eager to compromise to avoid spending cuts because he wants to get richer. Boehner gets rich funneling money to his cronies, especially defense contractors, so defense spending cuts take money out of Boehner's pocket. He doesn't want that. He wants to compromise to save that defense spending so he can keep getting richer.

"Once the Bush tax cuts go out of existence, the resulting recession will be all Obama's fault. He knows it, the Republicans in Washington know it, and the Democrats in the Senate know it."

That's why Democrats want to compromise. They're going to make a deal. But the weird part is Obama wants the economy to crash. He's not running for office any more. He can be more aggressive at crashing our economy in hopes of sparking his Marxist revolution. So Boehner's going to give him some sort of new tax revenue so he crash the economy faster while Boehner gets to keep his military spending.

"From a political standpoint, the Republican Party is in an ideal position to reap the benefits of inaction. All they have to do to become political victors is nothing. If they sit tight, kick the can down the road again, refuse to raise taxes, and allow spending cuts to fall where they may, they will get to see Barack Obama twisting slowly, slowly in the wind. I think it couldn't happen to a more deserving guy."

Too bad it will never happen. The thing is, cutting spending will have a positive effect on the economy. On the other hand, new taxes have a negative psychological effect on the economy. People change their behavior to pay less tax, and that's a negative effect on the economy. I don't know what the net effect of sequestration would be.