Washington's dirty little secret they don't want you to know about

Have you filled up the gas tank lately?

If you have then you know it is a pain at the pump for everybody in America. But the real pain is something most middle Americans don't even know about, and I'm not even talking about the 47% of the country that does not pay taxes. No, I'm talking about the people who do pay taxes and work their butts off to make a living.

Like a lot of Americans, I am not a happy camper and I am not happy with the incredible misdirection this country is going in with its spend, spend, spend policies. I'm not sure what its like in your house, but in mine if we can afford something, we can afford something, but we don't have the luxury of printing money by the truckload to spend beyond our means. The main problem is, these spending policies are only going to further weaken our economy.

This afternoon Pres. Obama is to make a speech explaining how we're supposed to get out of this mess - or how it is often described by this current White House - "potential financial Armageddon." In my opinion if there are not significant spending cuts, we're going to see a lot of pressure on the market. Unfortunately I think this speech will probably be long on rhetoric and short on details. That seems to be the style in Washington these days.

Okay I promised you the dirty little secret that Washington doesn't want you to know about and here goes... Now most of you reading this blog are pretty sophisticated, far more than the general public, but the reality is that we keep debasing currency and this is why commodities and why oil to a large part are going up in pricing. Yes, I know about the Middle East and all the problems there and it certainly is a factor that cannot be ignored. However, we are seeing the demand from around the world.

The world has changed and we unfortunately still believe we are the crème de la crème superpower and leaders of the free world when in fact, things have shifted subtly and ever so stealthily to Asia. You cannot expect all the jobs in a country to be exported and still have a strong economy. That's what many corporations did here in the US simply because it was more profitable to do business overseas and not deal with all of the regulations that keep getting more and more onerous in this country.

So okay I know this is a rant, but quite frankly I think it is reflective of a lot of thinking out there in terms of being frustrated, angry, and just plain mad at the lack of real leadership. What bothers me more than anything else is the fact that the politicians are only interested in one thing and it's not the country. They may say it's the country, but in reality it's getting re-elected that really matters to them. This is not what this country needs nor wants at the present time. We are living in a very, very competitive world and unless we have some idea of what we're doing and how to do it, we will be subjected to more and more pressure on the dollar and therefore on our lifestyles.

Here's an idea that has been kicked around for a long time, but never seems to get any traction. Why not just do away with all of the so-called tax benefits like home mortgages and such and just have a simple flat tax? If you're an entrepreneur in a country that was built on entrepreneurship, you need to know what the tax basis can be and what you're going to face in the future. If everyone just paid a flat tax no matter how little or how much money you had, I would consider that to be a fair system. Why should you be penalized for being successful? It's insane!

Now I'm lucky - if you can call years of hard work, luck. I can afford to pay higher taxes, but the reality is why should I pay higher taxes when up to 47% of the country pays no taxes? I came to this country from England because of a tax policy that offered no incentive for anyone to get ahead. I came here when most Americans used to save money, most Americans had a job, and most Americans felt good about the future.

Fast-forward a generation and you see what has happened. We exported millions of jobs and now we have no choice but to buy countless goods from the countries that actually have the factories to produce these items. Yes, I know there are a few exceptions such as the automobile industry, Caterpillar, and a few others that have kept jobs in the country, but the reality is that we've given away so much and gotten so little in return.

It's time to make a stand and make some hard decisions. The entitlement mentality is insane and everyone knows that there is no money. Period. If you print more money to pay for these entitlements and further debase the currency this will just force a further push upward in the price of gasoline and also other necessary goods like food. It's interesting to me that they come out and say, well the inflation index isn't bad, but how can they say that when they leave out these two crucial elements?

Okay, that's it. I've said enough and you know where I stand on the subject, but now I want to welcome your comments - either pro or against. One thing we still have going for us is that this is still a country of free speech and free markets.

Which camp are you in?

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One last thing, we've just finished the first quarter and I expect we're going to have some phenomenal markets both on the upside and the downside and I'm confident that our Trade Triangles will show us the way. Tune in today (and every weekday) at 1 PM to catch my afternoon MarketClub TV market update and also at 7 PM every Thursday to grab those upsides and avoid the downward swings.

See you at 1pm today,

Adam Hewison
President of INO.com
Co-founder of MarketClub

81 thoughts on “Washington's dirty little secret they don't want you to know about

  1. I agree 100%. None of these guys have any skin in the game. I'm from Pa. They receive free health care
    for themselves and family. They lease a car for up to $ 600.00 per month plus gas. They have a per diem
    rate of 163.00 per day. They receive a comfortable salary and when they retire a pension to kill for.
    I could care less how much they make in salary as long as they pay for everything else or contribute to it
    like us common people. Talk about pay freezes? Hello! What about all these politicians? Talk about lay
    offs? What about these politicians? These people are a joke!

  2. Getting away from politics for a moment. As a frequent visitor to the USA, it astounds me that
    you did not learn any lessons from the previous time of high oil prices (july 08). Most prople
    in Europe started downsizing, however, theres more 4 x 4s on your roads than ever before, its not
    unusual to see 3/4 cars outside of homes. You dont seem to understand that the days of cheap
    oil are over, it seems that everyone took advantage of the tax subsidy to go out and buy
    themselves a 4 x 4. If oil goes any higher l can see America coming to an abrupt halt.

  3. Lance, I agree with you wholeheartedly.
    Further, the thought that members of Congress show have term limits is an admirable objective. However, they have to give up all the lifetime perks which are associated with their election. It makes no sense that a republican or democrat can go from local politics, to state politics, and on to National politic positions and get pensions and perks for each one of these posts. When they graduate from one arena to another, the perks on the former should stop!!!!!
    I am really tired of seeing all these tax benefits being given to the rich. If 1% of the country's millionaires/billionaires control 40% of the wealth of this nation, something is very, very wrong.

  4. We shouldn't be mad at China...As the saying goes, "It's the economy, stupid!" We have only ourselves to blame for getting fat, bloated and over-taxed.

    Like good business people, the Asians are simply exploiting our inefficiencies.

    WE, and no one else, are the reason we're "Circling the drain."

  5. CTD, "Circling the Drain"... George Carlin. We are circling the drain, and they want your Social Security and and your Mother's medicare so they can give it to the crooks on Wall St...


    It's a big club and you ain't in it! You may think you are in it, but you're not.

    Unless you make a billion a year...

  6. Lol LanceJ you're short sightedness is an indication of your age and experience (meaning lack there of.

    Clinton didn't do anything to grow the economy, he was the fortunate recipient of the technology boom, which made the economy strong. Nothing Clinton did actually improved our economy. Hello, remember NAFTA?

    Oh, and you keep saying bush bush bush. Find me a conservative who backs Bush Jr.'s fiscal policy. *crickets*

    These problems weren't created in the past 12 years, or even 30 years. These problems started almost 80 years ago. Please stop taking the easy road of blame bush for everything. It's a weak argument at best.

    Oh, and you should really really really research your "ameri-jobs" nonsense. Government jobs DO NOT grow the economy; it's physically impossible.

  7. What are you people bitching about.Paying taxes? Why would you volunteer to do that?
    There is no law (code) mandating any one to do that. 14 or more IRS commissioners have said it is volantary.

    The US Treasury document 6209 states 1040 Not Required--Section 8 Page 72 Colum 2

    Also IMF (individual Master File)filing requirement code
    1040 United States individual Income Tax Return--Section 8 Page 76 Colum 1
    2 Not required to be mailed or filed.

    The IRS code 861-8a A United States citizen with foreign income is liable.
    Who is a United States citizen? a person born in the United States of America.

    What is the United States of America?
    Washington DC, Virgin Islands,Guam, American Samoa Island, Northern Mariannas,
    Puerto Rico. US army bases, Post Offices. Federal Court houses.

    I not find where any americans are liable.


  8. Flat Tax? Great idea except BHO and the CONgress would overlay it on top of what we have now. Mind you, this would only be temporary until the kinks would need to be worked out. Place your bets on that one. This dude did finally complete his taxes today. 72 pages with Federal, State, K1s, worksheets and all. Thank you very much but we don’t have a taxing problem, we have a spending problem. There seems to be only one new viable candidate so far, without too much baggage, to shake out the rotten fruit from the rotten tree and that might be too late.

  9. That would be a BIG mistake my friend.

    You would hand our Constitution over to the same dirt-bags that have slowly taken us over the edge by offering to put their thumb on the scales in exchange for a vote, or a kickback? No way!

    As Americans, we are woefully illiterate of what our Constitution is, and why it made our country so successful and special. The problem today is that we have most of our elected officials who think the US Constitution is a real impediment to their agenda. I have news for them, the Founders knew what is in the hearts of politicians, and they designed the Constitution to put them in chains. The limitations imposed on them by the US Constitution allow the the rest of us a chance to better of ourselves with the stability that results from having our politicians unable to sow instability with their personal agenda. Today, these criminals openly write laws that violate the Constitution and make the Courts sort it out, because of their utter lack of integrity, character and honor. They're either ignorant or unconcerned with the genius of the document that they've all sworn to uphold as they step into the office they were elected to.

    We need to actually follow the Constitution we have now, not open the floodgates for naked tyranny in America.

  10. Hello Adam;

    Very nice and thoughtfull comments. I am sure lot of people think alike you. I want to know why we do not have yet a real leader who is not power hungry? A lone leader may not be successful to achieve his/her goal to put our country in right track, but it will open eyes for the masses even if the leads of the leader will affect each of them. Then only the real power of mass will go in right direction. It is just my thought. Thanks


  11. A flat tax is a good thing. Beware of those pushing a so called "Fair Tax". The name alone should be a dead give away that its another big government scam to fleece the population. First off they plan to implement in in addition to the income tax, not to replace it like they claim. Secondly it will be tied into your soon to be biometric national ID card (papers anyone?)and will track every purchase you make for taxation purposes. If you like the anonomity enjoyed by using cash? What about gold and silver? Get ready to relinquish your privacy in the name of "fair" taxation. (ie being taxed into oblivion while the goverment profiles your every move.) Its a complete hoax and the establishment knows this. I wish the public wouldn't be so naive!

  12. Many of you actual belief there is a real difference in the political parties. They all get a cut, they are all on the take."Capitalism for the poor, socialism for the rich"...

    You all got robbed by the Banks 8.5 trillion in the bailout. It was a planned and orchestrated theft.“Socialism for Wall Street, Capitalism for Main Street.” They knew they were too big to fail and they pulled of the same scam Bankers have been pulling for centuries. i.e. "I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. ... You are a den of vipers and thieves". —Andrew Jackson, 1834, on closing the Second Bank of the United States..."Socialization of the losses, privatization of the profits"...

    Who repealed the Glass-Steagall Act?
    History of Glass - Steagall Act; by Phil Rubinstein

    We are all being robbed by this and it will probably destory our country. You are stepping over Trillions to worry about millions... You are all supposed to be sophisticated here? Are you? Do you really understand what has been going on or are you just worried about a punity tax hike on the super wealthy? Everyone in the country, especially people like you need to understand, we have all been duped AND IT IS HAPPENING AGAIN AS WE SPEAK... This time may be the knockout punch for everything we have and the country as we know it...

    REINSTATE GLASS-STEAGALL NOW! Before it is too late...

  13. I agree with Jessee Ventura. Cut the military in half, close down all the military bases, some 240 in the world then perhaps our US dollar would straighten itself out.
    I seriously doubt if any of these comments will do any good.

  14. These discussions have been going on for years and government bureaucracy keeps on growing. I doubt that the average citizen understands government money is their money. Oh the government will pay; we can charge the government more; we can cheat the government; etc. The list of taxes mentioned in a comment above are often created because some "do good" citizen or fastidious government employee or self serving politician lobbied to have a dog license or something similar. They had no perception of how the government would have to hire people to make all aspects of a new dog license work. As more people demanded more services related to the law to have a dog license, the government does their best to comply. Then some enterprising lawyer, especially in the States, decides this dog license law is a source of revenue. Now the government has to provide court time to address this. And it goes on and on. Soon the big government bureaucracy begins to feed on itself where many of the government employees work in the system to make the system work without any idea what the benefit or intent of the system is. Large corporations have this same problem. Canada is having an election now. The Prime Minister of Canada has far more power to do things in the country than the President of the United States. Most people don't know that Great Britain set up the colonies so this would be to their advantage. The Prime Minister appoints the Governor General (Queens Representative), members of the court, the head of CSIS (Kind of CIA)), the head of the armed forces, the head of the RCMP (national police force) members of our senate, head of the Bank of Canada (kind of the FED), Ministers for all federal government departments, heads of many public corporations, and more. What are our election choices in Canada in this election? Very poor ones many people think. We even have a national party representing one province (state in US terms) whose sole purpose is to separate from Canada. As a result it is almost impossible to elect a majority government. Now we are threatened with ongoing minority governments with elections ever year or two which again are a waste of the people's money especially since the end result will probably be the same. Or we could have a coalition government with a separatist component. Taxes in Canada are unbelievable yet we survive. Our present Prime Minister is an economist. He is also regularly disregarding democratic principles. The people seem to have less and less input and options. Maybe the comments above about dictatorship apply. Maybe Canada has always been ahead of the US in this regard. It is quite amazing that democracy works as well as it does. Hopefully, for both countries, it will continue to be self correcting.

  15. Adam,
    Atfer reading many of the posts one thing is crystal clear. Apparently you have struck a nerve!

  16. Adam, Like what you wrote. Somewhere you said the world is turned on it's side or something like this. If you think about it a world government has been on man's mind for centuries. World governments are alluded to in the Bible at least 3000 years ago. Ir's just logical, it's only surprising someone could figure that out so long ago. It's got to happen since Companies and other entities are becoming so powerful. What is so different is Obama. When someone says of him "the anointed one" it's not hard to believe.

    The most amazing rise to power of anyone in this counties’ history has occurred in my life time. It might be the most of all time anywhere. There is no substance to Obama’s background, of the usual nature that leads men, to the Presidency.

    He mocks us constantly. Wednesday speech was clear and upfront about his agenda. It has never changed. Government investment (control), raise taxes, spend more. His goals are to weaken America. He has accomplished so much doing so little. He seems unconcerned about the outcome and only gets involved to do damage control. He is in a line of Presidents some of whom seem to favor world government.

    He has demonstrated a vision for world power. I believe we are in a spiritual war and the world is about to change.

  17. the rich pay plenty of taxes... luxury taxes, gas guzzler taxes, property taxes, etc. etc. etc. Why is it that liberals want to fund the federal government when you know without question the feds will spend more than whatever we give them. In our current model, the rich fund state and local government far more than do the middle class and the poor. What about THOSE taxes?

  18. Taking out the scissors is a very simplistic approach to our current situation.

    We need to stand behind Senators and Representatives that actually want to take back this country. People who are ACTUALLY more interested in serving that getting re-elected. The professional politicians, mostly lawyers who have never worked a real job, have been in office for too long ang their only interest is "Self".

    We need responsible representation that will not only take out the scissors but actually do something that makes sense for this country. Start cutting special interest, subsidies, civil unions, organizations such as the EPA, Education, and old government institutions that are no longer needed. We need to streamline other Gvmnt Organizations such as the IRS, OSHA that weild a large stick with little impunity.

    We will also have to re-evaluate all laws that have been passed regulating corporations and business and eliminate the duplicity and actually try to give our business owners and workers a level playing field so that we can compete in this "so called" global economy. The first should be to lower the Corporate Tax in order to entice corporations to come back to this country and employ our people. Why is it that we have the highest Corporate Tax in the world, but the present administration attacks our Corporations and businesses on a daily basis. They are presently demonizing our base employment institutions.

    It will be hard, but it needs to be done. We ACTUALLY have to reduce the size of government which unfortunately means eliminating government jobs. My Dad once told me to remember two things and that is that "The government cannot control or manage anythng". Once the great people of this country understand this, the less likely it will happen again if we are actually able to turn things around in the first place.

    Unfortunately, our present administration is hell bent on distroying this country which has been the norm for Democrats since FDR. Special interest, subsidies, favoratism to the civil unions and the 47% of people that pay no taxes is their electoral base and they cater to them with zeal. Can you believe that our president actually took over GM and gave a large percentage of the company to the unions, which in essence converted them to civil unions and an expanded voter base.

    We are in trouble in this country and you are right, people need to wake up, put down the cell phones, quit listening to the liberal media and start educating themselves on the current situation or we will all be in peril. We have to understand that organizations such as the "Tea Party" are not far right wing loons but are the mainstream americans who are more atuned to the situation. We also have to understand history in order to realize that the Democratic party has been using slander, lies and fraud in order to accomplish their goals.

    Thank You for reading my rant.

  19. Folks, I'm going to make this VERY simple for you.

    You can tax the rich, the middle class, and the poor at 100%, and the federal government will find a way to spend 100% of that money, plus more.

    Revenue IS NOT the problem! Spending is the problem, and it has to be cut. For all of you who believe that increasing taxes on the wealthy will somehow balance the budget, you need to look at the numbers. If you taxed that top 10% of earners in this country at 100%, it wouldn't even put a dent in the $1.4 trillion deficit we're running this year.

    Further, the concept of take from one man so that another gets his transportation,health,food,water,electricity,shelter for free is massively divergent from the spirit which founded this country. Those people survived using their 2 hands, 2 feet, and their brains. So quit crying about the rich, the old, and the sick. Those people will find a way if they are forced to.

  20. "On the spending side, more than 60% of our spending is on “national defense”" I call BS, prove it

  21. That flat tax should be adjustable, year over year, depending on needs, mitigated by a maximum % increase year over year.

  22. "In addition, the top 2%, the super wealthy, take over 40% of all income and return less in income taxes as a percentage than the average lower 1/2 of taxpayers. And then they gripe."

    The super wealth dont "take over 40% of all income." They EARN it. Your thought process is that of a poor man.

  23. Hang on just one minute. Take off the blinders for a second.
    Why do the rich not pay taxes? Because they are using their money to strategically invest in the country. If I make $1 million this year, I can pay taxes on it and keep it in my bank and pay tax on it every year...or I can invest it into investments that shelter my money from tax, but are used to invest into businesses and growth that foster the development of industries. If there were not incentives to invest in businesses, where would the growth and jobs come from?
    You say you have come from England and I know a lot of economists from that area who are brilliant, but I don't think the economy over there is that robust. I want people to invest in companies here to foster the growth that create the jobs in research, development, manufacturing, services, and support industries.
    Flat tax is just flat stupid, I am afraid. I believe it would drive a whole lot of business and people to tax friendlier places (like the Cayman Islands), where they could enjoy their investments tax-free. Instead, let's move to keep our money at work here at home.

  24. Democrats turned over an economy to the Republicans that had the debt paid off. During 8 years of Bush, we had tax cutting for the rich. That didn't create more jobs. The rich don't go out and hire more people when there are lower taxes. Trickle down economics didn't work during George Bush and the Republicans 8 years in power. All that happened was a huge deficit. What I find incredible is how stupid the average 'Sarah Palin' 'real America' really is to turn to the same party that created this mess using the same tactics of tax cuts for the rich. I remember all the 'rich people' who came out and said in 2002 that they didn't want or need tax cuts. Most of those same rich guys today are now champions for tax cuts except Warren Buffet. Another problem is the republican controlled US Chamber of Commerce which actually funnels money from the Chinese and Indians to go get 'pro outsourcing' candidates elected.

    The Democrats have the knowledge and experience to fix the situation and part of that means raising taxes on the rich to a level back to where they were during the Clinton years.

    Finally, health care is the biggest problem facing our economy. Republicans continue to be controlled by health care lobbyists to try and block laws that prohibit the uncontrolled pursuit of greed regarding a person's health.

    I pay $1,200 a month in health care for a family of 4. That's 4 car payments or a mortgage on a home. I rent because I can't afford a home due to health care. I car pool with my wife and we are a one car family because we don't have the money for 2 cars anymore.

    The republicans bash universal healthcare and say look at Canada and yet Sarah Palin is secretly sneaking to Canada to get healthcare for her kids. Canada has a great healthcare system, no long lines, high quality care yet republicans who are in the pockets of the healthcare lobbyists state false lies about Canada and how bad their healthcare system is and all the dumb populous nods their heads.

    Folks, you need to wake up to the reality of the republican party and the horrible financial mess they got this country in. They continue to cast their lot for the rich and for profit rather than for doing what is right for the average American. This idea that if you are a good trader you have to be a republican is old school thinking and is dead. Warren Buffet likes Obama and I agree.

    Republicans don't care about 'spending beyond the countries needs'. All they care about is tightening the purse strings while a Democrat is President so that they can make him a 'one term President' which is their stated goal.

    Always remember GM and how Fix News put republican after republican on the air saying the government doesn't know how to run a car company and that the bailout of GM was going to be an endless black hole for the tax payers and that the government would be telling you what kind of car you had to buy. And the Beck broadcasts about how GM was just the start of a socialist manifesto conspiracy to take over the private sector. That was all proved wrong. The tax payers bailed out GM and it saved an estimated 1 million jobs in the GM supply chain and the tax payers will walk away with a profit when it's all said and done.

    The way out of this mess is clear, taxes on the rich need to be put back at a level where it was during the Clinton years. A universal healthcare system like Canada's needs to be implemented. The US Chamber of Commerce needs to be sued in court for taking money from outside countries and using that money to influence the election of 'pro-outsourcing' candidates here in America. Corporations that do not hire here in America should not be allowed to sell their products here in America without steep tariffs added as a penalty. All wars overseas need to come to an end as we don't have the money to prevent dictators from slaughtering their own people or from China invading South Korea or Taiwan if they choose to do so. A massive government Ameri-Jobs program needs to be implemented immediately with high quality workers on unemployment put to work modernizing our infrastructure, installing high speed rail, and getting us over to green energy and off middle east oil something like Theodore Roosevelt did with creating jobs for the National Parks project. We have a deep bench of talent sitting on the sidelines in unemployment. Get them back in the game and don't pay them to do nothing, pay them to do what apparently the private sector can't do.

    The November elections were a disaster with putting republicans back in power as they now seek to cut off the money for everything in an attempt to stall the economic recovery until after the 2012 elections under the fake guise of "we have to live within our means". I know of a lot of republicans who wish they could go back to November and vote another way, especially after the union busting moves of many republican governors and the attack on public workers. Yeah, that's the problem, your fellow broke citizens getting that fat check being a government worker, not the rich who are taxed at a 25 year low or the Chamber of Commerce outsourcing jobs, or the republicans being in the pockets of the healthcare lobbyists, it's your fellow man that's the problem with his fat government job... whatever, talking about a divide and conquer strategy.

  25. I have watched as your once great country has trashed the very values that have driven your civilization and spurred millions of fine men and women to emulate the equally fine examples of their mothers and fathers who clutched the American dream that was based on Christian tenets and values.

    When you, the American people, allowed your representatives, your broadcasting stations, your education system and now your president to make a mockery of your Christian values, the country took the slippery slope and as I have read above, it is gaining speed; but there is still time to turn away from this mistake and again embrace the vision of your forefathers and lead America once more to be the value driven collossus it once was.

    Worse, the incipient, parasitic cancer that stalks the Earth under a reworked strategy; Islam, is feeding on your vacillation and misguidedness and all decent Western countries in their avowed quest to ultimately swallow the civilizations within.

    For the sake of our children and grandchildren, please get back to basic values, whilst embracing all, unselfishly; yet with a firm gaze on your objective. We are all hedonistic and need to look outwardly

  26. The American right often criticizes us up here in Canada for being a "nanny nation." Yet we can't write off our home mortgage interest. I'd love to know how much extra revenue the Treasury would get if this U.S. "nanny perk" were eliminated. And I can't understand your rejection of taxpayer-funded universal healthcare. Our longevity and infant mortality stats are better than yours yet our per-capita costs are lower.

  27. Adam -

    The two most important words in your rant: FLAT TAX.

    I agree whole heartedly. There are some that support a FAIR tax. Im my opinion, anytime the word 'fair' is used, discrimination is immediately introduced. A FLAT tax would mean that everyone would have some skin in the game and an interest in the greater good. If you had income or a corporation made a profit (remember no deductions, exemptions, or credits) you owed the same percentage of income that everyone else pays. More income, more paid, less income less paid, but ALL pay.

    There were two other words that you did not use: TERM LIMITS.

    With term limits our congress would be free to make the tough decisions necessary for the good of our country and not those that would pander to special enterests just to get re-elected.

    What say you?

  28. YOU are Yanks and you want to control the world , so you have done the same thing as Muslims zero interest rates as you know muslim to muslim they are not allowed to charge interest BUT Muslim to infidel you are allowed to charge interest rates . But the infidels are charging zero interest rates and the muslim structure has self imploded . Think of the bigger picture SPEND SPEND and all those petro - dollars are worth 20c in the dollar . CHECKMATE Don't mess with uncle Sam,

    Cheers Don

  29. Dear John,

    How is socialized medicine working out for you Canadians?

    This is not a blame game but a call to all Americans to wake up and get involved.

    Your wingnut friend,


  30. In my estimation, Adam, your site is losing more and more credibility by the day.

    Your justification for a "flat" and "fair" tax flies in the face of so much of the history regarding the tax policies in the United States, I'm not quite sure where to begin. For starters, try examining the historical tax rates among various income groups since the 1920s. To suggest higher tax rates for high income earners are somehow "job killers" or "innovation killers" or "prosperity killers" - what have you - contradicts the economic history of nearly the entire western, industrialized world. And while you're at it, please define what you mean by "innovation." Do synthetic default swaps meet your definition of "innovation"? What about no-doc mortgages? Is MERS, the Mortgage Electronic Registration System, another example of innovation? Or, are we limiting the definition of innovation only to those things that manage to make us money?

    The last time I checked, a $13 Trillion hole had been blown right through the middle of our economy, thanks in large part to many of the "innovations" dreamed up by Wall Street investment banks and the mortgage industry. Now we're faced with the difficult task to trying to figure out how to fill that hole. We can either inflate our way out of this mess, or nominal income will have to fall; either Wall Street or Main Street has to pay the price. Neither option is very appealing, I admit. But the time to worry about these consequences was before the crisis happened, not after. Unfortunately, regulation and setting rules for banks, corporations, and other powerful financial interests to follow hasn't been such a keen idea for a while now. And so here we are.

    1. Brian,

      Like you I am frustrated. There is a lot of blame to go all around. There used to be laws that were removed that would have prevented this fiasco.

      The republicans and democrats are both guilty for the mess we are in.


  31. Excellent commentary Kirk, this directly addresses an argument I recently had regarding the criteria for Presidential eligibility. It also relates to the business of aliens birthing a child within our borders and whether or not that individual is 'automatically' a "natural born" citizen?

    Historically, the Supreme Court has upheld the obvious conclusion that children born within our borders are NOT U.S. Citizens merely by the physical place of birth. There is a jurisdictional side of the Constitution. Examples include U.S. born children of foreign diplomats and native Americans born within our borders but part of a separate and sovereign nation. The key element is that their parents were NOT U.S. Citizens. The latter was later changed by legislation (not the ruling - but the law was changed.)

    Contrary to popular belief, i.e. the so-called mainstream liberal left media, simply being born physically within the borders does not bestow automatic citizenship. This part of the law remains ambiguous. At some point, I have no doubt, the Supreme Court will have to make a clarification ruling on this law, wherein the example of Barack Obama being born (presumably i.e., if we assume within the borders of the U.S.) but without both parents being U.S. Citizens is not a natural born citizen and would therefore be ineligible to become president.

    The requirement set down by our founding fathers was, simply put, to insure that any one in order to be eligible to be president must think like an American in order to be an American. If your parents are not U.S. Citizens, then the influences in your life do not provide assurance of that.

    Obama is the classic example of the justifiable fears of the founding fathers. The matter was so important that they decided that eligibility should require "natural born" as a opposed to "naturalized".

    In the mean time, we are stuck with him - until we get rid of him.

  32. Congress and Senate Need to Stop having their own Health care and
    become part of the Medicare Program (will they take Health care
    serious). Stop Congress & Senate people from receiving a Retirement
    income after serving one term. Limit Terms Servicing in Washington.
    Stop making a Career of out of being in Washington..Limit Term in
    Congress & Senate. Stop the Lobbyiest from writing U.S. Govt
    Bills that favor Tax Dollar Spending.

    Secure the Boarders. People who came to U.S. illegally and have
    children born here will not be entitled to U.S. Citizens. Stop
    all Immigration....Til U.S. economy stabilizes and unemployment
    returns to 2% to 3%. MAKE ENGLISH REQUIRED language for business,
    & schools...FOR ALL U.S. Citizens as was voted on back in the 1800's.

    Restructure Company Taxes....as U.S. has hightest Taxes for Businesses
    in the World.

    C. J. Chesser

  33. I agree on a flat tax for all people with one rider attached. If you produce a product that is not made in this country it gets taxed DOUBLE. Another thing I am so sick and tired of people calling the unemployed names, freeloaders,zombies, etc. I went from a hard working job of many years at $22 an hour, to an unemployment check making $251 a WEEK. My family and I are really whooping it up on the government ,let me tell you! 🙁 It's not like jobs are everywhere you know. Obama now wants to allow illegal aliens amnesty, so they can soak up the rest of the jobs available. 20 million unemployed, 20 million illegal aliens, coincidence I think not!

    Bring the jobs back home to America and stop playing policeman with the rest of the world (737) foreign military bases currently.
    That would be a good start in my opinion. In parting here is a list of taxes we currently pay.
    Interesting List of Taxes That Exist Today!

    Accounts Receivable Tax
    Building Permit Tax
    Capital Gains Tax
    CDL License Tax
    Cigarette Tax
    Corporate Income Tax
    Court Fines (Indirect Tax)
    Dog License Tax
    Federal Income Tax
    Federal Unemployment Tax
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax (42 Cents a Gallon)
    Hunting License Tax
    Inheritance Tax Interest Expense (Tax On The Money)
    Inventory Tax IRS Interest Charges (Tax On Top Of Tax)
    Liquor Tax
    Local Income Tax
    Luxury Taxes
    Marriage License Tax
    Medicare Tax
    Property Tax
    Real Estate Tax
    Septic Permit Tax
    Service Charge Taxes
    Social Security Tax
    Road Usage Taxes (Truckers)
    Sales Taxes
    Recreational Vehicle Tax
    Road Toll Booth Taxes
    School Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Service Fee Tax
    Telephone Federal, State, and Local Surcharge Taxes
    Telephone Minimum Usage Surcharge Tax
    Telephone Recurring and Non-Recurring Charges Tax
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Toll Bridge Taxes
    Toll Tunnel Taxes
    Traffic Fines (Indirect Taxation)
    Trailer Registration Tax
    Utility Taxes
    Vehicle License Registration Tax
    Vehicle Sales Tax (Paid each & every time the vehicle sells)
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    "Not one of these taxes existed 100 years ago and our nation was the most prosperous in the world, had absolutely no national debt, had the largest middle class in the world and only one parent had to work to the support the family."


    Am I Bitter...A Tad

  34. here's a solution

    next time elect a person who demonstrates a belief in at least the basic American principals of self determination, liberty and justice for president

  35. The problem with us is really this: a madding belief keynesian economics! Over the past 3 decades our leaders in goovernment (local, state, Federal), the FED, and our leading economists all believe that deficit spending is a legitimate tool to keep the economy bouyant. This republican belive this, the democts did.The only real difference is that Repblicans are eager to use deficit spending to finance the military, while democrats favor domestic spending. Regardless both parties have practiced this.

    So to blame our nation's propensity to borrow/print and spend on one political party or the other is a lack of understanding! The real culprit is acommon belief and over-application of an economic theory by our leaders a cross the board!

    What has happened to us here is proof that deficit spending (at least without limits) is an addictive drug to which we as a nation have become addicted. Now we have to flush this drug out of our system!

    Can we do it? I am optimistic becuse now both the President and Congress has publicly stated a goal to reduce the deficit by 4trillion in 12 years.

  36. Where would I begin! Im 60 yrs old and Ive seen alot of changes to our country and it sickens me to see Americans imploding across the board. It seems that most mentally missed a huge event that took place in the clinton administration!!!!!! Have you ever heard of nafta, you know the agreement that bill and his political pals used to wipe out Americas economy. This was something he said he would NEVER VOTE FOR" in his campaign speeches, and get this he said after signing the agreement " that it would make America stronger,what a dip.... and a backstabber. We need to get all of these clowns out of office or theres going to be riots in our streets like the which weve all dreaded for years,thats the last thing I want to see " EVER" and Im sure 98% of my fellow Americans feel the same we dont want ak 47s shooting in the air and broken glass in the streets" If you are Jewish you know what the night of the broken glass started.Question? why do our states have to balance their budget but obama and crew doesnt, that rule is discriminatory our president and his political pals and foes have one agenda and thats to keep their jobs! and the empty chairs I see on c span tell me one thing and thats they dont spend much time there, and by mid term theyre campaigning their brains out " you know what? If you do your job you will win and you can take the money you piss away and put it into our deficit, how many adds do we have to see and phone/surveys do we need if its a secret ballot the rest should be secret, and our business!!!!! The masons put the worst president ever in office for 8 years he took 450 plus days of holiday at crawford/ camp david / he didnt give a rats ass about America he borrowed 2-3 trillion from China to fund a illegal war and we spilled our dearest blood over there, were there any politicians kids there? no way, I lost alot of pals in Nam and there was no politicians attending their soldier/childrens funerals.Im pissed beyond words that we sacrifice our young men and women to help countries who hate us, what the hell is going on? ok Im done I could write all night but we dont need to hear me, we just want our country back ! Im a baby boomer and I got to live through the birth of rock and roll,we marched for peace and we taught America to hug/ love one another, and our doors were unlocked Mom was home to hug her kids and dad had a job and there was so much pride and prosperity and we thought it would never end! but it did attention politicians you suck and you need to go wash cars and live in a ghetto and eat alp[o every night ,then a bedroll in a gutter, as for the politicians, mayors etc that care out there "THANK YOU FOR CARING!!!!!!!!!!!!!We had a president when we were kids,he was cool, young and charismatic he was a game changer, the Kennedys loved america and they were patriarch family brothers who were murdered, because they cared and they paid the ultimate price!they went to heaven and we went to hell fast.America still mourns these leaders they had flaws like we all do but they didnt fit the status quoa, we all wept in our classrooms/and at home with our families,after the ordered hit in Dallas. The Masons run the show and if they dont get what they want you are toast! Clinton , bush and bj/bush junior, cruised through without a scratch! " Hey they are bigtime masons we are in the toilet and soon asia will hold all the cards if we dont get rid of our new bad leaders in power now at the polls. lets take America back and send these clowns to the unemployment lines or jail if they really give us the shaft I can dream cant I ? Ridgerunner

  37. It's not who has the more beautiful answer, but who asks the most beautiful question (paraphrase poet e.e. cummings) It remains the same in the discussion of tax structure, recognizing Cuba, and right on down the line. Elections are held to make the common feel like he has had his say. It doesn't matter which way the elections go. Who, then??? ....shhh...(the financial elite)

  38. Adam - Flat 10% tax for individuals and corps. Do away with EVERY deduction and subsidy, such as depreciation, farm, oil depletion, etc and lobbying expenses. Cut off the cash flow from corps to Congress.

    Index corp tax rate to employee count and salaries(not executives)so that if a corp has 80% of its jobs and sourcing in the USA the rate is 10%, less than 80% the rate goes up. (How the hell can we call corps such as AA American when they have 100% of their production outside of the USA?)

    For the 108 foreign military bases and the depolyed naval fleets- start billing the countries we are defending, or close the bases asap and put the troops on border patrol or Army Corps projects that rebuild infrastructure.

    Kill the 2% social security gimmick now, increase the social security tax by 0.5% and eliminate the salary cap.

    Make all stock dividends and interest paid to natural persons tax free, but tax at 50% if paid to corps. Tax stock buybacks at 50% - they add zero value to the real economy. Tax corp acquisitions at 33% as they almost always eliminate jobs.

    Eliminate all foreign aide including military loan guarantees, retain only humanitarian aide.

    Cut the Federal budget by 7% a year for 10 years.


  39. No John it is people like you who are obvious one of the useful idiots Kirk describes in that you fall prey to this nonsense that obama is somehow a great leader with great ideas. He is caniverous and wishes to devour the American soul and morons like you are making it possible. WAKE UP YOU STUPID ZOMBIE BEFORE YOU REALIZE IT WILL TAKE YOU HALF YOUR INCOME JUST TO BUY FOOD. ANYONE SAY HELLO TO $20 LOAF OF BREAD.

  40. If the only tax an American paid was Federal Income Tax then a flat tax would be fair. But that is not the current system. FICA is used as general revenue (through IOU's but still...) but is a regressive tax on lower income workers. On top of that you have state taxes of various sorts. And the funding coming out of that is equally complicated. This effectively means that reducing or flattening Federal taxes effectively means tax policy becomes more regressive. This is not a fair system. If every calculation combined FICA and income tax as a general tax category then the conversation starts on a level playing field. And guess what tax policy under that criteria is almost flat except for lots of exemptions that can only be taken effectively by high earners. i.e. the system becomes far more regressive.

    Adam - I would love your comments on this analysis.

  41. There is no point trying to get the rich to pay more taxes, they have sophisticated tax planning and are way too smart to pay high income taxes, the higher you make 'em, the more they will find a way to get round them. Cuts is the only way forward.

  42. Strange, isn't it, how we start with a wrong premise and end up with a wrong result. On the spending side, more than 60% of our spending is on "national defense", i.e the military-industrial complex. The deficit more than doubled over the 8 years of socalled Republican rule. In addition the regulation that so many complain about (and I'm sure that there is some that is onerous) also keeps our environment and workplaces safe and make living enjoyable. What sweatshop would you prefer to work in? Without beating the horse, admit that this is not as simple as some would like.

    On the revenue side, we believe that taxing based on earnings makes sense when we know it doesn't. Ditto for sales taxes which distort other decisions.
    We also fail to understand how so much wealth is accumulated thru special deals and laws, even fraud (consider the recent mortgage situation as example #1.) Put simply, the basis for collecting revenue for community purposes (local, regional, state, nations, etc) in our present system has no relationship to what the community has provided for us, which would be the correct approach to the collection of revenue for our community needs (now don't get your intestines in a bind by calling that "communism"). Without going into a deep discussion taking many pages, the only taxing system which relies on what the community provides would be based on the values in ones space property, commonly called location and/or resource values. Values of locations are produced by the investment of the community, not by the input of the owner (think of values provided by a school system, etc.) The value of a resource (think electromagnetic spectrum as an example) is based on a community (government) granted privilege. Changing to such a system would change our entire structure over time, but would have to be placed in over a twenty year period to allow for adjustment of contracts, etc. Until we do, we shall be forever fighting the same economic wars. Politicians only think in terms of the next election, not the long term, another of our difficulties.

  43. Thank you for your straightforward and courageous expression of your opinion, Adam! I think you have crystalized the feelings of so many of us who see the same things happening to our once great country. How do think we should prepare for the next phase, the final debasement of the Dollar?

    1. Ron,

      We have a currency market and a metals market. Use and follow the Trade Triangles.

      All the best,


  44. I believe that no one will ever agree to a flat tax. Too many attorneys and accountants will be put out of work. I do agree that this is the best tactic to put in place due to debt we owe to China. I was so miffed about the proposed shut down if the 2 sides did not agree this past weekend. I say that non federal employees should take one to two days from spending any money. Stop buying gas, diesel, groceries, alcohol, cigarettes, soda pop, fast food, clothing, shoes, all necessites for just one to two days. Plan this so that we all do this on the same two days...maybe even consider not going to our offices. Just stop!!!! Trucks stop on the highways, train employees not show up for work, JUST STRIKE against what our govt is not doing. If Egypt can do it why can't we ----We have the best country to live in....But I am sick and tired of the people I voted in office not listening.....what will.....Let's just slow down and stop for 2 days.....are you with me....when will it be????

  45. What scares me is socialism for the wealthy to the tune of 8.5 trillion Bailout. We are not a democracy anymore.

    Washington is all Kabuki theater and in the end they are going to fight and fight and the middle class gets screwed a lot when the Republicans win and screwed a lot when the Democrats win. They play Good Cop Bad Cop...

    Clinton scrapped Glass-Steagall ( that was put in place in 1933 after what it regulated helped start the depression) and let Investment Banks merge with Banks and created the conflict of interest and TOO big to fail. The trap was then set after a rash of Bank mergers.

    Bush pulled the trigger on the TRAP, the biggest rip-off in the history of the world. It is mind boggling they got away with it, but they transferred 8.5 trillion dollars of wealth to the wealthy around the world in the Bailouts at our expense! 30 grand per person living in the USA! LOL... Madoff was small potatoes!

    No one is going to Jail, no investigations of the rampant fraud, and nothing is being done about too big to fail.

    And the rip-off artists that were part of the fraud, guys like Robert Rubin, who helped overthrow Glass-Steagall as the Treas. Sec. then immediately went to Citibank that he helped turn into Citigroup(and TOO big to Fail)through mergers and eventually became CEO. Got a 120 million bonus to leave C after the crash he helped orchestrate.

    We are a bunch of patsies...

    Most children don't pay taxes and niether do the working poor. A flat tax or sales tax is regressive and hits the middle class much harder than the wealthy. Warren Buffett pays 17% without tricks in taxes, his secretary pays 47%.

    I am sick of the rich whining after buying the government and cutting THEIR own taxes to 15% and shipping jobs overseas where their dirty little secret is that the real reason they sent the jobs overseas is a DIRT POOR DESPARATE WORKFORCE... Now we have a boat load of working poor here that can pay taxes and keep a roof over their heads. Not everyone is born a genius folks. This is a civilization and we have civilizations because no man is an island and nobody can actually does it all.

    Don't whine and don't lie to yourselves, MOST PEOPLE WISH THEY HAD WEALTH PROBLEMS... And if anyone is destroying the country is the clowns buying the politicians in Washington.

  46. None of the above. Have you ever heard of a STANDARD OF MEASUREMENT ???? Without no such proxy for value for currency, currency is nothing more than than an I.O.U. In other words if I sold you, a loaf of bread say for a dollar last year, and one year later, you return to buy another loaf, There is nothing to stop me from charging you 366 dollars the reason being like being in junior grade learning to count each day you get introduced to a new symbol called a number and in order to memorize it you start trading everything with that new symbol. We just give it class by defining it as money. Just a number that rationalizes a quantity of any goods for the amount of numbers we have accumulated on this classy paper we have been programmed to represent value in our mind.

    Try to imagine what a "GOOGOL" is! You see what I mean? I hope so! Thanks!

  47. yes indeed,
    this is the trouble with governments and even religions and all other sources of external controls over human virtue.
    Yes the government is bloated and obese.
    but only because of the welfare nanny state, beware of those calling themselves benefactors who offer benefits in return for economic slavery.
    the UNITED STATES is being trashed
    flat tax is a great idea.
    no income tax is a better idea.
    check out the CAFR.com and see that governments are not broke as they portray they own it all by investment.
    The supply of money is not the problem ,
    it is the control of the supply that is the problem.
    If our government was really the benefactor it claims to be it would have put all that tarp money directly into the hands of the people ,that huge chunk of change would have soved the so called trouble.
    So maybe there is no trouble but only smoke screen to hide the left hand from the right.
    No our government gave our money to its real masters the bannkers,
    they are in bed together government and the bank are strange bedfellows indeed.
    And though the government and bankers are in bed together how is it we the people are the ones getting screwed???
    they pee on our leg and tell us its rainin,
    but hey they got raincoats for sale too....

  48. Before any Senator or House of Representative of US votes, I'll say they ALL need to give up their own "federal health insurance they hold for themselves and their families for life ( yes, this Federal perk they all are entitled to) which they get for life from our tax monies!
    Only in America you see people allowing the ones who already have these health benefits to vote wether the rest of us should have it! Unbeliavable!
    The low and middle income population is already taxed to the max. They live paycheck to paycheck. The 35 % tax from the rich is not taking from their needs to survive, is taken from the luxury lifestyle they think they are entitled to live to the expense of the future education of children! After all, you don't get to take any money to the grave, you go as you came into this world. With nothing material, only developed souls, through detachment and godly attributes if you realize what is truly important. All the Profets helped the poor: Christ, Mohammed, Buddha, Baha'u'llah, etc.
    Higher taxes on the higher tax bracket of American earners makes sense to balance "the U S Budget" since they are encompassed of only 3-5 % of the 300 million population of this country! Norway invested in education which has a great return, and low , and now their economy is doing great.
    As one said, you cannot say with one corner of your mouth that you hold " Christian values" and with the other that it is Ok to cut the needs the lower income population needs to SURVIVE, which is the 95% of US population.
    This country is too materialistic and lost perspective on values such as helping the poor and needy, chidren, elderly, sick, with the focus on "ME"!!!

  49. I really believe that a flat tax with no deductions or loopholes would be a huge improvement over the current system. Even a really small amount, like 2% could work. That means that the rich and corporations (gross income) would have to pay, and the poorer people would have to pay too, because they use services just like everyone else. There could be a cut off point like $10,000/year per person gross income, or less.

    As for Obama, I'm so tired of the "alien" argument. I'm from Hawaii, and he was born and raised in Hawaii. He attended Punahou school, a prestigious private school in Honolulu. His birth certificate is public record and available for a small fee. Why doesn't he just show everyone a copy? Probably because because people would say it's a fake, or make up some more lies to support the alien argument. Why are people so obsessed with this anyway? It doesn't take an alien to be a crappy president. I voted for him because he seemed like he had a vision and a plan to get us there. Instead, he's let all of his supporters down and turned into a worse warmonger and spender than the Bush legacy. Spending cuts alone won't do much because the biggest financial drain is the wars we've been in for so many years. If our country wasn't so obsessed with policing the whole world, we wouldn't need such a monstrous military budget. We're spending gazillions on "homeland security" and fighting terrorism. Is America safer? Does anyone feel more secure? I sure don't. I've traveled around the world alone and actually feel safer in many foreign countries than I do in America.

    The biggest problem with this country right now is all the fear mongering propaganda that was started during the Bush era. "Level Orange" alerts are total bullshit. Has anyone noticed that the alert levels never change? We are a nation of sheep, blindly being led by a fear based government that is held hostage by our military that is supposed to be protecting us. Does anyone ever wonder what's really going on? Our public officials certainly aren't going to tell us.

    If you've got a moment, check out this great commentary by Claus Vogt of Weiss Research, a very well respected independent investment research company. It's a bit long but well worth reading.

    A Sad Day for Western Civilization
    Claus Vogt | Wednesday, April 13, 2011 at 7:30 am

    When the currency of great nations and unions sinks steadily in value — as we are seeing now with the once-mighty U.S. dollar and even the once-proud euro — one must step back from the day-to-day fray of financial markets and look at current events from a much broader, historical perspective.

    What we see is a history littered with examples of horrendous crimes. But the biggest, the worst, and the most devastating have, almost without exception, been perpetrated in the name of the state.

    It is this unmistakable conclusion that has led philosophers of freedom to adopt a healthy mistrust of government and its representatives.

    Based on the most thorough analytical and empirical arguments, they see the government as the greatest threat to freedom, against which a society must protect itself at all costs, lest it degenerate into dictatorship.

    The separation of powers is one such protective mechanism. But equally important is strict adherence to a currency that cannot be multiplied at will.

    This is what forces governments to treat the nation’s finances in a responsible manner, while protecting the people from the greed of the politicians.

    In principle, there are two ways freedom can be abolished and slavery introduced: Through revolution or evolution.

    Investors are familiar with revolutions that have led to the rise of dictatorships. The communist revolutions, causing untold suffering and poverty across great swaths of the globe have, after all, only recently been consigned to history.

    That is not the threat Western Civilization faces right now. Instead, the greater threat stems from an evolutionary process initiated long ago — a not-so-subtle, insidious progression in which the government spreads gradually like a cancerous tumor, increasingly limiting individual freedoms.

    The decline in the U.S. dollar is the centerpiece of that trend. It not only threatens the freedom to spend. It also threatens a series of other freedoms.

    Where did it begin? Many years and presidents ago.

    For example, the administration of former president George W. Bush, despite all their rhetoric to the contrary, were, in fact, out-and-out Keynesians.

    This is so obvious it should not even be worth mentioning. However, in the wake of the debt crisis, since the blame game and search for scapegoats is so ubiquitous, and since neoliberalism is first in the firing line, this observation is nonetheless necessary. It’s ironic that liberalism and free market philosophies are getting lynched, when the real culprit that deserves to stand trial is Keynesianism.

    The key point here is not whether government intervention in the economy — including massive economic stimulus programs — are financed by deficits or not. We know that Keynes proposed that the government should accumulate reserves in good times so that it could afford to finance stimulus programs in bad times.

    But because Keynes himself was, in large measure, a politician, it is inconceivable that even he considered the implementation of this proposal to be possible — let alone probable.

    The interests of politicians who depend on votes are diametrically opposed to Keynes’s proposition of accumulating reserves in times of plenty. Voters almost invariably demand that surpluses be spent today — not in some elusive future.

    To reveal a government’s hidden agenda — even behind its smokescreen of public relations — all that is typically required is to consider a few key variables: You can look at the trend in the government’s share of total economic activity, the amount of legislation passed or, more commonly, the level of national debt.

    If each of these is expanding, you can be almost certain that the government is not pursuing a liberal agenda. It is immaterial what kind of rhetoric the government is deploying. Do not let them fool you. And don’t be hoodwinked by false critics, either. Judge both sides not by their words, but by their deeds.

    Classical liberalism and the Austrian School of economics stand, as we do, for freedom of the individual — with no ifs or buts. Classical liberalism and the Austrian School are the offspring of unwavering philosophers of freedom.

    And these are philosophers who think ideas through to their logical conclusion with inexorable consistency, even in circumstances in which others would prefer to take a more relaxed view — to further their career or to avoid established taboos.

    It should therefore come as no surprise that thinkers of this provenance have no powerful friends. They are a thorn in the side of the powerful.

    In The Denationalisation of Money, F.A. von Hayek sums it up as follows: “I fear that since ‘Keynesian’ propaganda has filtered through to the masses, has made inflation respectable and provided agitators with arguments which professional politicians are unable to refute, the only way to avoid being driven by continuing inflation into a controlled and directed economy, and [the only way to] ultimately save civilization, will be to deprive governments of their power over the supply of money.”

    I agree. But some of the world’s most powerful men — controlling trillions of a nation’s money supply — do not. They run their money printing presses nonstop. They drive up the price of virtually every commodity under the sun. And they place their entire national economies at risk.

    My advice: Extreme caution with U.S. dollar, long-term bonds. Look for opportunities to profit from the inevitable inflation.

    Best wishes,


  50. You have rhe right anwsers. Congress and the administration will never legislate a flat tax as it prevents them from extracting more money from us anytime they wish. I plea to the Tea Party to bear down on Congress to enact
    the Fair Tax. Another march on Washington would be a good start!

    party to

  51. The most economically efficient tax is a sales tax or value-added tax. Go to Google-- dozens of economic papers have drawn this conclusion.

    What if income tax was eliminated altogether? We could save the billions spent on tax collection, provide incentives to businesses and individuals to produce by eliminating the progressive tax system, eliminate the thousands of law suits and audits conducted each year...and the extra revenue can go towards social programs that ensure those with the most inelastic demand (the poor) can be taken care of.

    The idea that companies or individuals are unpatriotic for leaving the country is ridiculous. This comment comes from senators and individuals who no doubt on their way to work filled up their vehicle at the gas station with the lower price, not the higher one. In other words, they criticize companies for doing something they themselves do every time they make a purchase: they take the best deal, or move to the country with the lowest taxes/best work force, political stability, etc.

    Used to be the US was a place people wanted to get into...now some people want the government to hunt down those who choose to leave because America, at 35%, has the highest corporate taxes in the industrialized world. To me that sounds more like North Korea than the land of the free. Now is NOT the time to be wasting energy finding ways to hunt down corporations...America needs the money and the jobs NOW!! Do what America has always done: make it an attractive place to do business again.

    Just a thought.

  52. Hi.
    believe me I'm for a flat tax. however at this stage of the game it is far too late to cut spending. just the opposite. unfunded liabilities are north of 100 trillions. the share per working non poor US person is more than 1million. not workable wether you cut spending or not. but let's imagine we do. cut half ofgovernement workers, state cities workers. cut half of health care spending (15% of the economy) and defund social security (another 15% of americans). let's cut half the military. defund social programs. OK . where are we now.we're still in deficit. that's right. economy has been cut in half. that's right.
    now what. a complete cratering of the remaining private businesses (are you going to eat out? travel? buy stuff?).
    it's just not workable unless we're willing to go thru a greater depression transition phase that will destroy the very fabric of society.
    I'm all for hard money, low taxes, .....but just not doable at this stage.
    BTW, I would point out that trading would be very limited in the "wishable" environment.

  53. By debasing the dollar by 50% we reduce our international debt in half - that is the secret plan!

  54. Adam: is it really a good argument for a flat tax? (I assume every dollar would be taxed, no exceptions, no matter who earns it or their circumstances?)

    Then what do you believe the optimum flat tax rate should be? !0%? - 20%? - 30%? - Any of those would be a gift to the wealthy (honest ones anyway), wouldn't it? and any of those would be a nasty burden on those who are already earning less that it takes to provide the necessities for themselves and their families, would you agree?

    So the question is how would you put everybody on an equivalent level before you apply the tax.

    Oh, and what would you do about the vast amounts of hidden taxes that are so disproportionately paid by the poorest among us?

    1. Theoryofl,

      I only suggested a flat tax, what the actual percentage is I would have to study the numbers. The big thing would be no exceptions.

      All the best,

  55. Good article! A flat tax could be good, but I would like a national sales tax and just eliminate the bureaucracy of the IRS. Everyone eventually spends money. This would help tax those who completely evade the tax system by operating on a cash basis. Everyone should contribute, and not just penalize those who are successful.

    The core of the problem is indeed spending the money we don't have, making promises that we can't keep, operating a huge Ponzie scheme. Continued taxing for entitlements will change the direction of our great country from being a leader of nations, making it an also-ran.

    I have worked hard my entire life, operating on a budget, saving for the future and doing my best to avoid debt. The government should do the same.

  56. Not only does this article from 2009 provide some detail on the dollar debasement Adam rightly brings up, it predicted the problem China now faces as it continues to hold dollars. I believe Adam has discussed this on a recent 1pm update, as well.

    One More Bubble to Go — http://bit.ly/i5wRRS

  57. The gripe, that 47% or half or whatever number is kicked around by the misinformed and dubiously resentful complainers, is at best a mean deception and at worst an intentional lie. Everyone pays taxes. Everyone eats, wears clothes, uses energy, water, and consumes the various necessities of life, and with few exceptions, pays what they can afford to live however well they can.

    For example: most people eat bread... years ago it was estimated that there were 127 taxes on a loaf of bread because everybody from the farmer to the miller, the baker, the trucker (several), the wholesaler, and the grocer paid taxes, and they all added the tax cost to the bread. The consumer, whether rich or poor, pays the same taxes, but the rich person doesn't eat much more bread than the poor. The same is relatively true for every necessity.

    The important difference is that, income taxes aside, the poorest of wage earners pay an immensely higher percentage of their income for these hidden taxes than the wealthy.

    In addition, the top 2%, the super wealthy, take over 40% of all income and return less in income taxes as a percentage than the average lower 1/2 of taxpayers. And then they gripe.

  58. Adam, you are so right. All politicians really are doing is running for the next election. In the movie, The American President, this is exactly what Michael Douglas' character does. Until he realizes that "he should be DOING his job instead of trying to KEEP his job". What I think we really need (because I think the Founders missed this one)is an amendment to the Constitution that limits both Senators and Representatives to 12 years total. Either house, no more than 12 years max. That's two terms for Senators (hey, it's good enough for the President, why not them?) and six terms for Reps. Max. That's it. I seem to remember from school that in colonial times, you served the public, then went back to your farm, not went on a speaking tour or wrote a book. Your logic is spot on. The government should not be living beyond its means. Individual citizens can't. Neither should their government. Flat tax? Right on. As long as you can guarantee there won't be any income hiding games being played. Beyond that, if we're going to keep the current system on taxes, there is no way you can justify GE making $ 65 billion in profit and paying no taxes. AMT good enough for individuals? Then, should be good enough for corporations. Much of the problem with government and private industry are the accounting gimmicks. I'm sure if I try hard enough, I can show that I'm a multi-millionaire without having the actual assets using their accounting gimmicks.

  59. what for? Elected leaders are not following the current one. Leave the document alone and replace all the leadership instead.

  60. I agree with Adam. I would like to see all deductions eliminated and everyone taxed at the same flat rate. Close all the loopholes that allow corporations to move their headquarters to foreign countries to avoid paying corporate taxes. Money earned in the United States should be taxed by the United States. And we should have a balanced budget amendment to stop forcing our children from having to deal with our debt because we aren't paying our bills.
    Years ago no one had CREDIT - if you didn't have cash in your hand you couldn't buy it. The two exceptions were home mortgages and auto loans - both of which you got from a local bank where the loan officer knew you personally. We still did all of the things people do now except we paid our way as we went.

  61. Please pay CLOSE attention to this quotation from Alexander Tytler written in 1770:

    “A Democracy cannot exist as a permanent form of government. It can exist only until the voters discover that they can vote themselves largesse from the public treasury.

    From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, always followed by a dictatorship.

    The average age of the world’s greatest civilizations has been about 200 years. These nations always progressed through this sequence:"

    Happy Bicentennial (plus 35 years), America!!

    This WILL end badly...no dramatic increase in commodity prices has ever NOT been followed by major conflict. There WILL be riots (Middle East/Europe/fiscal pressure, mass youth unemployment); there WILL be war. Major powers NEED commodities...when materials become scarce and expensive, countries will go to war rather than let their people starve or go without.

  62. How about cutting the wars and military bases around the world. Its costing trillions literally. Whilst the increase in the money supply has decreased the value of the dollar, we have/or will possibly hit peak production this decade if we are to believe hubbert. This does not mean we have run out of oil but the easy and cheap oil has already been consumed and global supply and reserves are decreasing as well as saudi arabia lying about its oil reserves. We have not found a single large depository of oil in the last 3 decades and we have increasing demand from asia. america and us western nations are heavily dependent on imported oil which makes us dependent on social and politically stability in the middle-east. The middle-east is highly likely to have increasing turmoil over the next few years and perhaps a big war awaits us. America has plenty of oil and natural gas, but unfortunately wishes to use others natural resources before they use there own, perhaps for strategic reasons, meanwhile in the U.K we are doomed as we have run out of north sea oil and dependent on financial capital. whilst all currencies have depreciated in value to gold in the last 10 years due monetary/credit expansion, emerging countries and commodity rich countires have been appreciating against the western currencies. I think this reflects the growth in emerging countries and post industrial state of western nations as well as the increase in the money supply. A time for war.


  63. if not the politicians, then who makes the policies for our direction? we have changed leaders for 50 or 60 years yet the policy direction remains the same erwin

  64. Kirk, it's people like you that are the problem, not us ipad users. Duh!!!
    If you educated yourself instead of ranting about bogus conspiracies like,"where was Obama born?",you would understand the complex issues we face.
    One man of either party cannot change the direction the US is in.
    This started decades ago and you all let it happen. It's now evident how much trouble you're in. It will take decades to change course and there are no guarantees you will succeed. There is no quick fix as your favoutite FOX programs suggest.
    America is polarized to the extreme. Your Boehner man is emblematic of this.
    Start thinking more and blaming less and you may begin the long process of turning your country around.
    As a canadian, I have many warm friends in the US. I wish you all well. Even this obvious wingnut Kirk.

  65. On the pragmatic side, how do we flush this administrative and congressional cesspool and reestablish fundamental rules?
    Does the Tea Party have a point and does it deserve the attention and help of all conservative Americans?
    Have we already gone beyond the the point of no return? Have our politicians killed the golden goose?
    With tongue in cheek, should there be a rule that lawyers be prohibited from running for public office? Works for me!


  66. I believe all Three options apply.

    1. There needs to but cuts but they need to be selective and broad based.
    2. The tax system needs to be changed to more fairly tax the population. At the present the working
    poor are carrying a heavy burden. All subsides need to be reworked. Maybe some are needed but most are not.
    3. And yes we do need to have spending. But spending needs to generate jobs and help the well being of the public.
    Not add more money to the pockets of the wealthy.

    I belive the President is on the right track with his budget plan

  67. So, what was the dirty little secret? that politicians work to get re-elected -- not working for the best interests of the country?

  68. Americans need to put away the game boxes and ipods and wake up!!
    Only one out of 2 people living in this country pay taxes. The rest are here for a free ride. Once this sinks in and people grow to understand the TRUE agenda of their "change agent" President, maybe some positive change action will begin. I have pasted an article that helps to explain what I believe is happening.

    Who is Barack Obama? – A Terrifying Analysis
    Redacted from a speech by Dinesh D’Souza, President King’s College, NYC, NY
    By Jerome S. Kaufman
    On March 15, 2011, the Heritage Foundation sponsored a telecast featuring Dinesh D’Souza, President of King’s College New York and author of the best selling book, Roots of Obama’s Rage. After introducing himself, D’Souza got right into an in-depth analysis of current US President Barack Obama. Obama is the product of an unusual family history, far different from most Americans or people anywhere, for that matter. To say Obama is the product of his parentage and previous environment is a gross understatement.
    D’Souza first described his own difficulty understanding Obama. Who did Obama represent, what were his ambitions, his goals, his mind set, etc.? D’Souza concluded that Obama was a different leader from previous Democrats – especially different from so-called liberals like Jimmy Carter, Michael Dukakis, Bill Clinton.
    There are a host of theories trying to explain Obama. By the Right he has many different designations – a Progressive, a conventional Liberal, a Socialist, a Muslim, not born an American, an alien. But, all of these javelins bounce off Obama with no effect or just glancing blows. He continues to act in apparently mysterious ways – not easily explained. If he were truly a Socialist he would have tried to command the means of production. But, Obama did not nationalize banks but rather infused capital to them. Another inconsistency: Recently banks wanted to pay back their government loan and get off the hook with the Obama administration. But, Obama did not want to take their money. Rather he insisted that the bank undergo some sort of stress test before allowing them off the hook? Why?
    There are claims that he is an environmentalist and simply acting out that role – banning vital oil drilling in America, limiting the production of coal, introducing and pouring billions into hair brain solutions like wind mills and sun energy which are far more expensive and will not supply anywhere near the energy required besides, requiring years to develop properly.
    Others say he has been motivated by Al Gore’s global warming theory. Gore asks for the use of less energy and a smaller carbon footprint to solve this debatable problem. However, Gore wants everyone in the world to cut back, not just the US. Obama does not care who conforms or not. Faster growing economies like China and India, far more responsible for future theoretical global warming, are ignored. Obama’s thinking is thus, not that of a true environmentalist.
    In addition, Obama is blocking oil drilling all over America and its coastline while, at the same time, encouraging oil drilling in Mexico. To add salt to our wounds, The US Export Import bank has given a two billion dollar loan guarantee to Brazil to do their own off shore drilling. But, the oil is not to go to us but to the Chinese!
    Then, there is his inconsistent and apparently illogical approach to all our problems in the Middle East – one minute he is siding with the dictators of Egypt, Libya, Iran, Saudi Arabia and the next minute, making obligatory gestures of compassion to their long suffering populations. (Not to mention his dissing and enthusiastic participation in the dismantling of our only reliable ally in the Middle East, Israel jsk)
    Other inane gestures: He somehow made the Muslims party to our space program praising them for their great contributions to its development – huh? He returned a bust of Winston Churchill given to us by the Brits that had been gratefully placed by us in the White House because of Churchill’s crucial contribution to the defeat of Adolph Hitler in WWII.
    D’Souza ended up concluding it was difficult accounting for all of Obama’s apparent weirdness until D’Souza came to his own epiphany that Obama is not weird, foolish, inexperienced naive or any of the above. He knows exactly what he is doing and we had better stop misinterpreting and underestimating the man.
    D’Sousa presented his conclusion combining these disparate facts in one impossible to refute hypothesis which negates all the previous theories we might have had. Obama is not Jesse Jackson or Al Sharpton or just another American Black shake down artist. Obama has not really been raised American. His early years were in Kenya and then Indonesia. He was first thrust into American culture by his mother when he was already 10-12 years old.
    Then, D’Sousa read Obama’s book, Dreams from my Father. D’Sousa discovered that indeed, Obama has nothing to do with Black America. He never sat at a segregated lunch counter nor was he descended from slaves. His Dad was an educated immigrant from Kenya and his Mom was white from Kansas. His is not an American dream. He has no understanding or sympathy for American exceptionalism. In fact, he resents the concept.
    So, what is Obama’s dream? He tells us very explicitly that his dream is his father’s dream. Obama Sr. was raised in Kenya. In his 20‘s, he married a Black woman in Kezia, had two children by her, and while she was pregnant with the second, he left his family and went to Hawaii as a student. He there met Obama’s Mom – Stanley Ann, married her and before Obama Jr. was age two also left her. He then went to Harvard where he took up with a third woman, took her back to Africa and had two children by her. At the same time he reunited with his first wife, from Kezia, and had two more children with her. In total he had four wives, usually two at the same time, and 8 children and with no sense of obligation and nor did he supply care for any of them.
    Obama Sr. was a chronic alcoholic who had multiple driving accidents. He kills a man in one, in another hurts himself so badly his two legs have to be cut off and replaced with iron rods. Nevertheless, his courtship style remains intact. He takes up with another woman who bears his eighth child, George Obama.
    In summary – he was quite an unusual role model for President Obama! Later, Obama Jr’s sister took him to task and demanded how could he admire this despicable man who had abandoned all his wives and children, never gave them a dime or even paid them a visit. Obama Jr., in fact, barely knew him since his Dad had visited him only once, when he was about 10 years old. Consequently, Sr. had no direct influence upon Jr.
    That influence was wielded by Obama Sr.’s first convert – Jr’s mother, Stanley Ann Obama. Obama’s mother was an only child. She grew up in Kansas and somehow became a bohemian rebel against her parents and her country. Despite her marriage and rapid abandonment by Obama’s father, she refused to learn from her experience. She finds and marries another third world, anti-American guy, Lolo Satora, He was Indonesian and grew up under the colonial Dutch. Satora wooed Stanley Ann Obama with stories of Indonesian colonialism, married her and took her and her son, Jr. to live in Indonesia.
    By a quirk of fate and bad luck for the American people, the Indonesian husband becomes more pro Western, pro American, and anti Communist. He signs up with an oil company and fights against Indonesian rebels in his own countryside. Ann then attacks him as a traitor to the greater cause and quickly sends Jr. back to Kansas to be raised by her parents and escape the pro-American thinking of the Indonesian husband. She remains in Indonesia the rest of her life.
    Obama’s father, Obama Sr.. was basically an anti-Colonialist – the dominant idea in the third world of the 20th Century. The simple core of this idea was that the world is divided into two – the colonizers or oppressors and the colonized or victims. The colonizers used to be Europe, Britain, France and now it is America in this line of thought. Furthermore, the rich got rich only by looting the colonized and even when they left, powerful economic forces remained in a position of exploitation. Banks, insurance and pharmaceutical companies, oil companies and anyone else that happens to make money are simply now the economic wing of colonialism still into exploitation. And, who to Barack Obama, Jr. is the lead elephant and current exploiter? Why we are, of course.
    How is Obama to deal with us, the problem? First, bring us under the rod of the Federal government. Obama’s father in 1965 wrote an article in an East African journal saying how this should be done. Bring down all the rich guys by the power of the state, confiscate their land, property, raise taxes as high as you want – 100% if necessary, and obtain their wealth through fiat and legislative piracy. The rationale is that the wealth is not rightfully theirs, in the first place, but had been ripped off from the poor .
    That is Dinesh D’Souza’s basic hypothesis. So, Obama far from being a multi-culture guy, far from being the first African American president, is actually the first anti-American, anti-colonialism president and driven by that mind-set!
    Obama, like the naive would like to believe, is no buffoon, not inexperienced, not unworldly, not apolitical and not a mediocrity. He is a very clever but misdirected guy and out to do us all in. He is the most effective Democratic President since Lyndon Johnson. He has gotten more programs passed in the shortest time, by Democrat or Republican, since Reagan.
    If he is to be voted out of office in 2012, Republicans will have to take the full measure of the man. They need a strong guy, perhaps a father figure, a person that appeals to the American public. It will be a very difficult election made more so by mindless, irresponsible media genuflections and the Obama useful idiots that may never see the awful danger that this man represents.

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