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Taxes, Spending, and Debt are the Real Issues

My favorite politician, Ron Paul, once again tells it like it is. 

BTW, looking forward to a tax refund at tax-time is not fiscally responsible.  Some people look at it as forced savings.  That’s a joke.  Why loan the government your money for free?  Your goal should be to pay or to receive back as little as possible.  

 

Source: House . Gov
by Ron Paul

In Washington we hear a lot of talk about tax cuts, but the rhetoric does not always match the reality. For most Americans, taxes remain too complex and too high. After the tumult of the upcoming midterm election, it is imperative that Congress gets back to basics and addresses our terrible tax system.

Lower taxes benefit all Americans by increasing economic growth and encouraging wealth creation. I’m in favor of cutting everybody’staxes – rich, poor, and otherwise.  Whether a tax cut reduces a single mother’s payroll taxes by forty dollars a month, or allows a business owner to save thousands in capital gains and hire more employees, the net effect is beneficial. Both either spend, save, or invest the extra dollars, which helps all of us more than if those dollars were sent to the black hole known as the federal Treasury.

….. But the real issue is total spending by government, not tax reform.

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Don’t Get Excited About CPI and Housing Data

The more economically savvy I become – the more difficult it is to believe many of the government’s statistics that are quoted as fact.  Or maybe it has become easier to understand how and why the statistics are manipulated by various stake holders.  For example, it doesn’t take a brain surgeon to realize that there is a glut of housing inventory. I am amazed at how many houses are for sale as I drive around town.  However, there are new homes being built on every vacant green patch of land.  If the following assertion by Peter Schiff is true – there will be some CEOs wearing striped suits. 

“Either home builders do not appreciate the gravity of the supply and demand imbalances, or they are simply building in order to convince stockholders that the future earnings picture looks bright. Company insiders can only continue selling their shares if they convince investors to keep buying. A sharp reduction in starts would confirm just how dire the housing situation really is, and jeopardize many executives exit strategies.”

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Deficit Spending and Social Security

Ron Paul tells it like it is.  I wonder what his Republican brethren say when they read his writings.

 

Source: House . gov
by Ron Paul

The only honest solution to the future insolvency of Social Security is for Congress to stop spending so much money. When Congress outspends federal revenues, it raids Social Security funds to cover the difference.  Unless Congress makes real cuts in spending– and stops spending Social Security taxes on completely unrelated programs– millions of Americans simply will not receive even a fraction of the money they paid into Social Security.  Ignore the rhetoric about tax increases and cuts in benefits, as though you are to blame for the problem! All Social Security obligations could be met if Congress did not spend so much on other things.

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Let’s Get Real About Deficits

I always thought that the Republicans were the party of fiscal discipline.  Not so under W’s administration.

 

Source:  Financial Sense . com
by Peter Schiff

This week, while President Bush took credit for supposedly cutting the enormous budget deficit in half, the Commerce Department reported that the trade deficit in August was a record $69.9 billion. Annualized, the trade gap comes to well over $800 billion of foreign-made merchandise tacked onto our national charge card, a figure that dwarfs the federal budget deficit by comparison.

In the first place, the fact that President Bush maintains a straight face while claiming to be a deficit cutter is a testament to his political skills and the media’s and Wall Street’s gullibility. Who does the President think he is kidding? So far, the national debt has increased by about three trillion dollars during his presidency, or about $500 billion per year. Those are the real numbers. The non-sense budget deficit the government reports excludes off-budget items and money borrowed from government “trust funds.” However, expenditures excluded from official budget numbers still must be financed, and the money borrowed to do so adds to the national debt. In addition, those numbers do not reflect expenses accrued during the year but not yet paid. Were such expenses properly accounted for, the official deficit would be several hundred billion dollars higher. Finally, the numbers do not include any growth in contingent liabilities, which now exceed $40 trillion, making the actual national debt over eight times the official figure, which includes only the funded portion.

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Bernanke Passes The Buck

If you don’t know – Gold and the US Dollar are inversely correlated.  As the dollar strengthens, the price of gold declines. As the dollar weakens, the price of gold increases.  Paul van Eeden explains the reasoning for this far better than I can, so refer his article Understanding the Gold Price.

Now while reading the article below recall the relationship between the dollar and gold.  When you finish reading it, it should be apparent why investing gold will pay great rewards over the next 10 years.

Many people will make money investing in gold, but only a few will get to keep it.  That’s just the way bull markets work.  In order to be one of the fortunate few, you will need to have a plan.  Re-read the articles on dollar cost averaging – this strategy should be the foundation of any plan.

 

Source: Kito Casey
by Axel Merk

In a speech at the Economics Club in Washington, Federal Reserve (Fed) Chairman Ben Bernanke warned America to save more and spend less to preserve our standard of living for the long-term. The core of his message that we must improve fiscal discipline and the quality of our education is not new; his advice will also be applicable as long as we have politicians and schools. The speech is more striking for what was not mentioned – namely the Fed’s role in this process.

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