Taxes are a part of every government. Citizens pay a portion of their incomes in return for administrative services by their elected officials. It sounds pretty simple, while the code that governs taxes is anything but simple.
There are several proposed solutions to this including the flat tax and "fair tax."
These will be the subject of our next post. Stay tuned.
-Matthew Nielsen
IVLG
Wednesday, September 21, 2011
Tuesday, August 30, 2011
Job Creation: Public vs. Private
>>>This just in: More insanity from the IMF on govt spending.
Big government folks on both sides of the political spectrum like to spend your money. It's so common that all of us know that most Democrats and even most Republicans now seem to enjoy spending taxes on their pet projects.
It's an addiction that rears its ugly head time and time again amongst politicians and some of their ravenous constituents and donors. Everyone wants a piece of the pie, and when the government is doling out cash as fast as possible, can you blame the folks who want some of their taxes back, in whatever form?
Unfortunately, a very common misconception is regurgitated by politicians, citizens and even educated economists: Government can create jobs. How, you ask? Well, by stimulating the economy, of course. Some of us are aware now that government spending doesn't create jobs. Just because the government creates a program to encourage people to take their vehicles in to a dealership and have its engine seized up so none of the parts can be used (ever again), doesn't mean that a new job was created. All that did was allow a large auto manufacturer to sell a car. They didn't hire anyone new to make that car. Cash for Clunkers was a gross intervention into commerce by the federal government of the United States. It was also one of the worst things you could do in a time when everyone is "going green." Just think of all those auto parts that could have been reused.
The government attempts to stimulate the economy by sending money it got from taxes (or from creditors) into the economy.
Contrast this with the private sector where demand determines supply. One great example: Apple's iPad. It's a huge success and Apple effectively created the market for it. Sure, tablet computers didn't start with the iPad, but Apple made them mainstream and they did it without any help from the government. Apple didn't "prime the pump" first by sending out stimulus checks. They didn't make an announcement that it's your patriotic duty to spend (remember G.W. Bush in 2001). They simply created a product that they were confident in, marketed it, and watched the coffers fill up.
Daniel J. Mitchell of the CATO Institute wrote an article in 2008 that explains how government really can not create jobs. Mitchell argues that government stimulus, intended to "jolt" the economy by spreading money out into the economy, is actually just taking money from your left pocket and putting it into your right. So, how about unemployment benefits? Where does that money come from? Doesn't it come from the folks that just laid you off? If they had hit hard times but never paid unemployment insurance, might they have enough money to keep you on for a bit longer than they otherwise could? Well, maybe so.
This article, written by Barbara Kiviat of TIME magazine in 2009, starts out with all of the facts straight, then quickly turns a corner and suggests that the Cash for Clunkers debacle was a success. Then, another slight turn back when she doesn't quite give three other ideas her full approval, though, according to her, there's no reason not to try them out.
Itkowitz and Kraus of The Morning Call wrote an article just a couple of weeks ago that outlines well the positions of the two opposing approaches to solving the problem of unemployment.
The fact is that most Democrats and Republicans want to spend all the money they get (and then some), just in different ways. The party that you belong to, in large part, depends on your view of where to spend the cash. Some of us are a bit different. We know from personal experience that money doesn't grow on trees, and it can't really be created just because the Federal Reserve types in a couple more zeroes in their transfers to banks around the country. We know from handling our own finances that we've got to learn to live within our means. And, yes, the same principle DOES apply to the government that applies to us personally. How is it all of a sudden okay to go into massive amounts of debt just to pass that debt on to your kids and grandkids... when you're the government?
Do not forget that the people created the government. "... if we permit government to manufacture its own authority out of thin air, and to create self-proclaimed powers not delegated to it by the people, then the creature exceeds the creator and becomes master." -E. T. Benson
P.S.
"Students of history know that no government in the history of mankind has ever created any wealth. People who work create wealth. James R. Evans, in his inspiring book, "The Glorious Quest" gives this simple illustration of legalized plunder:
Big government folks on both sides of the political spectrum like to spend your money. It's so common that all of us know that most Democrats and even most Republicans now seem to enjoy spending taxes on their pet projects.
It's an addiction that rears its ugly head time and time again amongst politicians and some of their ravenous constituents and donors. Everyone wants a piece of the pie, and when the government is doling out cash as fast as possible, can you blame the folks who want some of their taxes back, in whatever form?
Unfortunately, a very common misconception is regurgitated by politicians, citizens and even educated economists: Government can create jobs. How, you ask? Well, by stimulating the economy, of course. Some of us are aware now that government spending doesn't create jobs. Just because the government creates a program to encourage people to take their vehicles in to a dealership and have its engine seized up so none of the parts can be used (ever again), doesn't mean that a new job was created. All that did was allow a large auto manufacturer to sell a car. They didn't hire anyone new to make that car. Cash for Clunkers was a gross intervention into commerce by the federal government of the United States. It was also one of the worst things you could do in a time when everyone is "going green." Just think of all those auto parts that could have been reused.
The government attempts to stimulate the economy by sending money it got from taxes (or from creditors) into the economy.
Contrast this with the private sector where demand determines supply. One great example: Apple's iPad. It's a huge success and Apple effectively created the market for it. Sure, tablet computers didn't start with the iPad, but Apple made them mainstream and they did it without any help from the government. Apple didn't "prime the pump" first by sending out stimulus checks. They didn't make an announcement that it's your patriotic duty to spend (remember G.W. Bush in 2001). They simply created a product that they were confident in, marketed it, and watched the coffers fill up.
Daniel J. Mitchell of the CATO Institute wrote an article in 2008 that explains how government really can not create jobs. Mitchell argues that government stimulus, intended to "jolt" the economy by spreading money out into the economy, is actually just taking money from your left pocket and putting it into your right. So, how about unemployment benefits? Where does that money come from? Doesn't it come from the folks that just laid you off? If they had hit hard times but never paid unemployment insurance, might they have enough money to keep you on for a bit longer than they otherwise could? Well, maybe so.
This article, written by Barbara Kiviat of TIME magazine in 2009, starts out with all of the facts straight, then quickly turns a corner and suggests that the Cash for Clunkers debacle was a success. Then, another slight turn back when she doesn't quite give three other ideas her full approval, though, according to her, there's no reason not to try them out.
Itkowitz and Kraus of The Morning Call wrote an article just a couple of weeks ago that outlines well the positions of the two opposing approaches to solving the problem of unemployment.
The fact is that most Democrats and Republicans want to spend all the money they get (and then some), just in different ways. The party that you belong to, in large part, depends on your view of where to spend the cash. Some of us are a bit different. We know from personal experience that money doesn't grow on trees, and it can't really be created just because the Federal Reserve types in a couple more zeroes in their transfers to banks around the country. We know from handling our own finances that we've got to learn to live within our means. And, yes, the same principle DOES apply to the government that applies to us personally. How is it all of a sudden okay to go into massive amounts of debt just to pass that debt on to your kids and grandkids... when you're the government?
Do not forget that the people created the government. "... if we permit government to manufacture its own authority out of thin air, and to create self-proclaimed powers not delegated to it by the people, then the creature exceeds the creator and becomes master." -E. T. Benson
P.S.
"Students of history know that no government in the history of mankind has ever created any wealth. People who work create wealth. James R. Evans, in his inspiring book, "The Glorious Quest" gives this simple illustration of legalized plunder:
"Assume, for example, that we were farmers, and that we received a letter from the government telling us that we were going to get a thousand dollars this year for plowed up acreage. But rather than the normal method of collection, we were to take this letter and collect $69.71 from Bill Brown, at such and such an address, and $82.47 from Henry Jones, $59.80 from a Bill Smith, and so on down the line; that these men would make up our farm subsidy. "Neither you nor I, nor would 99 percent of the farmers, walk up and ring a man’s doorbell, hold out a hand and say, ‘Give me what you’ve earned even though I have not.’ We simply wouldn’t do it because we would be facing directly the violation of a moral law, ‘Thou shalt not steal.’ In short, we would be held accountable for our actions." -E.T. Benson, The Proper Role of Government
Tuesday, August 23, 2011
Foreign Aid to China... huh?
That's right, the United States sends millions of dollars over to China each year in foreign aid.
What? You didn't know this? Well, you should because it's your money they're using to improve infrastructure and get farmers on the internet.
You may ask, "Why are our lawmakers so worried about raising our taxes at home when they just send it all overseas?" Then I would say, "That's a fair question, maybe an email or phone call to your legislators is in order." Then you might say, "Nah, it's not worth all that." Or, you might say, "An email isn't too difficult to send." In which case, you would be right. Especially when I've already found a place where you can look up your representatives' contact information. You might also try your senators here.
Back to my point, Americans' representatives have agreed together that China needs their money back in the form of a gift. They send us money by buying our debt and we thank them kindly, begin paying interest on it, then we give them some back as a gift. Hmmm... I've never done that. I've never gone to the bank that holds my mortgage and handed them some extra cash to make repairs to their building or to improve their internet speed. Have you? Maybe you don't own a home, but have you done this for your landlord? Maybe they need a new cell phone or computer. I'm not convinced I would enjoy doing that. Are you? Why do we do it?
Would it surprise you to learn that the US Government has hundreds of millions of dollars worth of contracts with state-owned Chinese corporations? Well, be surprised no more. It's true. It's also nauseating. We're trying to get out of debt by raising taxes, cutting services (which won't get any opposition from me) and even printing dollars out of thin air while sending China the money we borrowed with interest attached, just because we'd like to see the farmers online more often. Seems perfectly reasonable, right?
Nope.
-Matthew Nielsen
IVLG
What? You didn't know this? Well, you should because it's your money they're using to improve infrastructure and get farmers on the internet.
You may ask, "Why are our lawmakers so worried about raising our taxes at home when they just send it all overseas?" Then I would say, "That's a fair question, maybe an email or phone call to your legislators is in order." Then you might say, "Nah, it's not worth all that." Or, you might say, "An email isn't too difficult to send." In which case, you would be right. Especially when I've already found a place where you can look up your representatives' contact information. You might also try your senators here.
Back to my point, Americans' representatives have agreed together that China needs their money back in the form of a gift. They send us money by buying our debt and we thank them kindly, begin paying interest on it, then we give them some back as a gift. Hmmm... I've never done that. I've never gone to the bank that holds my mortgage and handed them some extra cash to make repairs to their building or to improve their internet speed. Have you? Maybe you don't own a home, but have you done this for your landlord? Maybe they need a new cell phone or computer. I'm not convinced I would enjoy doing that. Are you? Why do we do it?
Would it surprise you to learn that the US Government has hundreds of millions of dollars worth of contracts with state-owned Chinese corporations? Well, be surprised no more. It's true. It's also nauseating. We're trying to get out of debt by raising taxes, cutting services (which won't get any opposition from me) and even printing dollars out of thin air while sending China the money we borrowed with interest attached, just because we'd like to see the farmers online more often. Seems perfectly reasonable, right?
Nope.
-Matthew Nielsen
IVLG
Monday, August 22, 2011
Arab Spring: Who gets credit?
The Libyan rebellion has been all over the news for weeks now in the United States. Just today they overtook the capital city of Tripoli (video). Gaddafi was a friend of the US (if only by name) up until recently. What does the United States do for its friends? We send them money. In 2009, our government took the dollars that you sent them, as required by law through taxes, and sent $2.5 million to Libya. $400,000 from that total were set aside just for Gaddafi and his "foundations."
Does this strike you as odd? Why was President Obama so quiet about Libya-anything up until he could see that Gaddafi would surely be ousted? Politico.com says that he was playing the game just right, and that he was just "fatigued" by the Egyptian revolution. The fact is that Obama doesn't like to do any heavy lifting. Time and again he opts for cheerleader-turned-leader, effectively claiming movements already in motion as his own.
So, surely, G.W. Bush was better, right? He didn't send your money to any dictators, especially Mubarak or Gaddafi...right? Well, that's not quite true. We've been sending Egypt an average of $2.1 billion each year since 1975. That's a lot of money. That's a lot of YOUR money. A further perusal of W's record in the Middle East shows that he restored full diplomatic ties to Gaddafi's Libya in 2006.
Okay, so both Bush and Obama have a bit of a tainted record when it comes to supporting dictators in the Middle East. But, which of the two deserves the credit for the revolutions in Egypt and Libya (with Syria likely to follow in this delightful "Arab Spring")? First, why am I even asking this question in this way? I'm already assuming that it's one of these two people. I'll tell you why: John Gibson (Fox News Radio host) told me to.
Gibson, whom I picked on earlier, claims that Bush 43's speech in Egypt in 2008 was the impetus for the revolutions we see happening now. Disagreements by callers were met with incredulous sneers and outright disbelief. He doesn't even know if this Libyan revolution is such a good thing just yet and he'd like to assign W the W. While no one in the Obama administration would like to admit it just yet, the U.S. did provide "support" for the rebels. But before we can go giving the "credit" to Obama, we should consider assigning that to the rebels, since they're the ones spilling their blood in this conflict.
As a parting note, I'm not too eager to declare this Arab Spring "wonderful" since the whole Egypt thing doesn't seem to be panning out too well. And, unfortunately, even in this early stage, the rebels of Libya seem to want to turn immediately to Sharia Law, that wonderful source of equality and civility. There is one certainty in all of this, which is uncertainty. To add to the complexities and unpredictability of wars and uprisings, Middle Eastern cultures are so different from those in the western world, that most of the talking heads get the whole thing completely wrong. The Arab Spring will likely turn into one of the hottest, muggiest summers that region has seen in some time.
-Matthew Nielsen
IVLG
Does this strike you as odd? Why was President Obama so quiet about Libya-anything up until he could see that Gaddafi would surely be ousted? Politico.com says that he was playing the game just right, and that he was just "fatigued" by the Egyptian revolution. The fact is that Obama doesn't like to do any heavy lifting. Time and again he opts for cheerleader-turned-leader, effectively claiming movements already in motion as his own.
So, surely, G.W. Bush was better, right? He didn't send your money to any dictators, especially Mubarak or Gaddafi...right? Well, that's not quite true. We've been sending Egypt an average of $2.1 billion each year since 1975. That's a lot of money. That's a lot of YOUR money. A further perusal of W's record in the Middle East shows that he restored full diplomatic ties to Gaddafi's Libya in 2006.
Okay, so both Bush and Obama have a bit of a tainted record when it comes to supporting dictators in the Middle East. But, which of the two deserves the credit for the revolutions in Egypt and Libya (with Syria likely to follow in this delightful "Arab Spring")? First, why am I even asking this question in this way? I'm already assuming that it's one of these two people. I'll tell you why: John Gibson (Fox News Radio host) told me to.
Gibson, whom I picked on earlier, claims that Bush 43's speech in Egypt in 2008 was the impetus for the revolutions we see happening now. Disagreements by callers were met with incredulous sneers and outright disbelief. He doesn't even know if this Libyan revolution is such a good thing just yet and he'd like to assign W the W. While no one in the Obama administration would like to admit it just yet, the U.S. did provide "support" for the rebels. But before we can go giving the "credit" to Obama, we should consider assigning that to the rebels, since they're the ones spilling their blood in this conflict.
As a parting note, I'm not too eager to declare this Arab Spring "wonderful" since the whole Egypt thing doesn't seem to be panning out too well. And, unfortunately, even in this early stage, the rebels of Libya seem to want to turn immediately to Sharia Law, that wonderful source of equality and civility. There is one certainty in all of this, which is uncertainty. To add to the complexities and unpredictability of wars and uprisings, Middle Eastern cultures are so different from those in the western world, that most of the talking heads get the whole thing completely wrong. The Arab Spring will likely turn into one of the hottest, muggiest summers that region has seen in some time.
-Matthew Nielsen
IVLG
Wednesday, August 17, 2011
Buying weapons for the enemy
For those of us who have been around long enough to see a few wars, or even to have read about some of them, it's no surprise that our military's finance department doesn't have a perfect record. Even so, the rose color fades fast from the glasses when the military reports that over $360 million has passed on to the people we're fighting against.
So, how does this happen? Well, let's take a look first at the Obama administration, because the president is ultimately responsible, like it or not, for the goings-on during his tenure in office. How can we even expect a remote possibility of avoiding something so heinous as this, when Attorney General Holder is sending guns into the cartel-run provinces of Mexico with almost no way to get them back? Operation Fast and Furious is a failure of gigantic proportions. But, really, folks, we should be more worried about a Lone Wolf attack... seriously? The Lone Wolf, if there is one, has a great possibility of being a creation of our own government, considering their unbelievably loose policies in shelling out cash and guns to our enemies.
By the way, this $360 million "mistake"in Afghanistan amounts to more than than all of Osama bin Laden's estimated personal wealth. The United States government, in the wake of bin Laden's death, is bankrolling the Taliban and al Qaida. This provides funding for another seven World Trade Center attacks!
The answer? You be the judge. Comments welcome.
-Matthew Nielsen
IVLG
So, how does this happen? Well, let's take a look first at the Obama administration, because the president is ultimately responsible, like it or not, for the goings-on during his tenure in office. How can we even expect a remote possibility of avoiding something so heinous as this, when Attorney General Holder is sending guns into the cartel-run provinces of Mexico with almost no way to get them back? Operation Fast and Furious is a failure of gigantic proportions. But, really, folks, we should be more worried about a Lone Wolf attack... seriously? The Lone Wolf, if there is one, has a great possibility of being a creation of our own government, considering their unbelievably loose policies in shelling out cash and guns to our enemies.
By the way, this $360 million "mistake"in Afghanistan amounts to more than than all of Osama bin Laden's estimated personal wealth. The United States government, in the wake of bin Laden's death, is bankrolling the Taliban and al Qaida. This provides funding for another seven World Trade Center attacks!
The answer? You be the judge. Comments welcome.
-Matthew Nielsen
IVLG
Tuesday, August 9, 2011
Radio and Big Gov't
Today as I was driving around for several errands, I tuned in on SiriusXM to John Gibson's (@johngibsononfox) radio show. At one point in the show, a man from Minnesota (I believe) called in and commented that America should pull back most of its troops. He asked "Why does America stick its nose where it doesn't belong?" One of Gibson's cohorts/sidekicks said, in so many words, "Our military belongs where we say it belongs. That's what being a superpower means."
This raises a few questions. First and foremost, "Are you kidding me?" Well, that's a little rhetorical. Maybe something more like "If/When America loses superpower status, will your opinion change?"
I'll be the first to say that the outcome of the Iraq war (e.g. the removal of Saddam) was favorable for everyone except Saddam. Maybe even him. However, am I alone in thinking that our military should be defending OUR land? Disagree? Maybe George Washington can persuade you:
Now we find ourselves in 2011 with over 70 military bases outside the borders of the United States. We have thousands of soldiers operating and living at these locations. Some of these include places like Japan, England, and Spain. Greenland, Greece, and the Netherlands also play host to our servicemen and servicewomen. Does this strike you as even somewhat excessive?
So, back to Gibson and his hasty sidekick. Do you really think, honestly, when you're away from the heat of the moment and the stare of the mic that we need a Naval Support Detachment in Sao Paulo, Brazil? Is it really so easy that America can just "stick its nose" anywhere it wants to because "That's what being a superpower means?" Are you giving license to the BRIC nations who are (Brazil, Russia, China) or will soon be (India) superpowers themselves to stick their noses into our business? Or are they only allowed to butt-in where the local GDP is below a certain pre-determined level? What's the magic/arbitrary number, Gibson, et al?
We don't have the resources to be patrolling the Indian Ocean while flying over the Baltic and flooding Afghanistan with 30,000 more troops. Not only does this contradict the Founders' intent, it also defies fiscal sensibility in a trying time for a global economy.
-Matthew Nielsen
-IVLG
This raises a few questions. First and foremost, "Are you kidding me?" Well, that's a little rhetorical. Maybe something more like "If/When America loses superpower status, will your opinion change?"
I'll be the first to say that the outcome of the Iraq war (e.g. the removal of Saddam) was favorable for everyone except Saddam. Maybe even him. However, am I alone in thinking that our military should be defending OUR land? Disagree? Maybe George Washington can persuade you:
"The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible. So far as we have already formed engagements, let them be fulfilled with perfect good faith. Here let us stop." -Farewell Address, 1796I'm inclined to agree with the father of our country.
Now we find ourselves in 2011 with over 70 military bases outside the borders of the United States. We have thousands of soldiers operating and living at these locations. Some of these include places like Japan, England, and Spain. Greenland, Greece, and the Netherlands also play host to our servicemen and servicewomen. Does this strike you as even somewhat excessive?
So, back to Gibson and his hasty sidekick. Do you really think, honestly, when you're away from the heat of the moment and the stare of the mic that we need a Naval Support Detachment in Sao Paulo, Brazil? Is it really so easy that America can just "stick its nose" anywhere it wants to because "That's what being a superpower means?" Are you giving license to the BRIC nations who are (Brazil, Russia, China) or will soon be (India) superpowers themselves to stick their noses into our business? Or are they only allowed to butt-in where the local GDP is below a certain pre-determined level? What's the magic/arbitrary number, Gibson, et al?
We don't have the resources to be patrolling the Indian Ocean while flying over the Baltic and flooding Afghanistan with 30,000 more troops. Not only does this contradict the Founders' intent, it also defies fiscal sensibility in a trying time for a global economy.
-Matthew Nielsen
-IVLG
Monday, August 8, 2011
Never Say Always
President Obama has declared that the United States is above the laws of economics. Taking a risk by buying into America's debt is not really a risk, apparently. The U.S. is impervious to the financial troubles that plague other countries who operate their governments at a higher annual cost than their GDP.
It looks like a duck and it sounds like a duck, but it's not a duck... Or is it?
No question that the problem can be fixed. None at all. The question is, when will Americans and the U.S. government wake up to the fact that more taxing and more spending is not the answer to our financial problems.
Cartoonist Mike Lester says it well:
Saturday, August 6, 2011
Credit Rating Downgrade
The United States has had the highest and best credit rating available since countries began to be rated in 1914.
Standard and Poor's explains their reasoning for issuing credit ratings:
"A credit rating is Standard & Poor's opinion on the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation. Over the years credit ratings have achieved wide investor acceptance as convenient tools for differentiating credit quality."
(Source: http://www.standardandpoors.com/ratings/en/us/)
So, when S&P downgrades the United States' credit rating, they're making a statement about how comfortable they are in recommending their customers invest in the debt securities that the country in question tries to sell. More simply, when any credit rating agency downgrades anything (a business, country, etc.), they are expressing their concern that any investment (plus interest and/or dividends) will be recovered, or at least that the odds have decreased for some reason.
Well, what does this move mean for the United States' ability to repay their creditors? At the very least, Standard & Poor's has called it into question... formally... publicly.
What does this mean to you as an individual? More than you may initially think.
Have a look: "One area of concern is whether a downgrade would ward off investors from buying U.S. debt and increase the country's cost to borrow money, therefore increasing consumer interest rates on everything from mortgages to car loans to student loans." -CNN.com
How do lawmakers react? Some, predictably, are trying to blow it off as absurd: "A source familiar with the discussions said that the Obama administration believes S&P's analysis contained "deep and fundamental flaws.""
Interest rates will likely rise. That's good for your 401k, savings accounts, and IRA's. But, it's not so good for folks looking to get a loan for a house, car, or an education.
Inflation is another potential issue along with unfavorable exchange rates. The dollar is already weak and vulnerable. Now, there is little question that the world's reserve currency is going to lose even more of its value. This pushes the BRIC countries (Brazil, Russia, India, China) even closer to completely dropping the U.S. dollar in favor of the Chinese yuan or possibly a completely new currency as has been reported by several outlets since at least 2009.
What will you do? What can you do? The list is too long for this post. I'll encourage you to make the list by posting your comments below.
-Matthew Nielsen
Independent Voters for Less Government (IVLG)
Standard and Poor's explains their reasoning for issuing credit ratings:
"A credit rating is Standard & Poor's opinion on the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation. Over the years credit ratings have achieved wide investor acceptance as convenient tools for differentiating credit quality."
(Source: http://www.standardandpoors.com/ratings/en/us/)
So, when S&P downgrades the United States' credit rating, they're making a statement about how comfortable they are in recommending their customers invest in the debt securities that the country in question tries to sell. More simply, when any credit rating agency downgrades anything (a business, country, etc.), they are expressing their concern that any investment (plus interest and/or dividends) will be recovered, or at least that the odds have decreased for some reason.
Well, what does this move mean for the United States' ability to repay their creditors? At the very least, Standard & Poor's has called it into question... formally... publicly.
What does this mean to you as an individual? More than you may initially think.
Have a look: "One area of concern is whether a downgrade would ward off investors from buying U.S. debt and increase the country's cost to borrow money, therefore increasing consumer interest rates on everything from mortgages to car loans to student loans." -CNN.com
How do lawmakers react? Some, predictably, are trying to blow it off as absurd: "A source familiar with the discussions said that the Obama administration believes S&P's analysis contained "deep and fundamental flaws.""
Interest rates will likely rise. That's good for your 401k, savings accounts, and IRA's. But, it's not so good for folks looking to get a loan for a house, car, or an education.
Inflation is another potential issue along with unfavorable exchange rates. The dollar is already weak and vulnerable. Now, there is little question that the world's reserve currency is going to lose even more of its value. This pushes the BRIC countries (Brazil, Russia, India, China) even closer to completely dropping the U.S. dollar in favor of the Chinese yuan or possibly a completely new currency as has been reported by several outlets since at least 2009.
What will you do? What can you do? The list is too long for this post. I'll encourage you to make the list by posting your comments below.
-Matthew Nielsen
Independent Voters for Less Government (IVLG)
Friday, August 5, 2011
Can Government Create Jobs?
Gateway Pundit has a video that may interest you. Government cannot create jobs. Jobs are created by businesses. Government can encourage job growth by reducing regulations and taxes. More on this later.
-IVLG
-IVLG
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