Obama’s Fuzzy Math — Millionaires Already Pay a Fair Share

Sep 21, 2011, 1:45 pm EDT
Obama’s Fuzzy Math — Millionaires Already Pay a Fair Share

President Barack Obama offers “a plan that asks the most fortunate among us to pay their fair share like everybody else.” One wonders if Obama’s “everybody else” includes the 50 million Americans on welfare or perhaps the nearly 50% of Americans who pay no income taxes. Probably not, but then, who is the everybody else the president refers to?

But here in the Obama welfare state, who needs to work and pay taxes? As Pat Buchanan points out, “Folks below the poverty line have their kids educated for free in Head Start, for 13 years in public schools, then get Pell grants for college. They get free food stamps and health care through Medicaid. They get subsidized housing and earned income tax credits, are eligible for all other safety-net programs, and can earn $23,000 in pretax income and pay no income taxes.”

Pat’s probably making this scenario up, right? No, as usual, Mr. B. is dead on the money. I guess that crowd is not the everyone else Obama is referring to. Is it any wonder the Tea Party is gaining powerful upside momentum as sales of Ayn Rand’s Atlas Shrugged surge? In Atlas Shrugged, America’s “producers” — persuaded by John Galt — disappear, leaving behind the socialist government and creating their own independent unregulated economy. This “strike” by the producers grinds “the motor of the world” to a halt. Factories close and people riot. Read 

Making the Case for a Millionaires Tax

Sep 21, 2011, 1:38 pm EDT

“Class warfare” or “math” — that’s what the debate over raising taxes on the wealthiest Americans has boiled down to.

The consequences of doing nothing in Washington usually are not great. In this case, however, if the “supercommittee” can’t produce an acceptable outcome to both the Democratic and Republican leadership, we all will suffer as Medicare and defense spending are scaled back dramatically. So called “triggers” related to spending cuts would be equally split between defense and non-defense programs — though Social Security and Medicaid would remain unchanged. Credit agencies also might consider another downgrade of American debt in the aftermath.

Obama drew a line in the sand this week by boldly claiming to veto any deficit reduction that does not include some higher taxes on the rich.  Republicans have been fighting back, but it makes sense to blink on this issue and get to work on serious deficit reduction and tax reform. Read 

Greece’s Debt Issues Are Becoming a Global Black Hole

Sep 21, 2011, 12:44 pm EDT

The extremely volatile markets of late stem in part from news suggesting Greece’s debt issues have made a default imminent — creating a global black hole that’s sucking in a growing number of other economies with it.

Default fears intensified last Friday when European finance ministers announced they would delay a decision on whether or not Greece was eligible for its sixth tranche of bailout funds. Greece was scheduled to get the next $11 billion (8 billion euros) installment of its $152.6 billion (110 billion euros) aid package by the end of September, but now must wait at least until October.

European Union and International Monetary Fund inspectors met with Greek Finance Minister Evangelos Venizelos last night to evaluate the country’s progress with austerity measures. Greece agreed to reduce its deficit to 7.5% of gross domestic product (GDP) this year, and below 3% by 2014 in order to receive bailouts from the IMF and other euro nations. Read 

Will the Fed Channel Chubby Checker?

Sep 21, 2011, 11:00 am EDT

Can the Federal Reserve save the economy — and the stock market — by “doing the twist”? Monday’s early rally for the Dow showed hope still is bubbling among some investors, even if it might not quite spring eternal. (The bounce largely faded by the close.)

Today, though, the nation’s central bank will announce the results of its two-day policy meeting in Washington — and the “hopers” are looking for Chairman Ben Bernanke to spin a dusty vinyl platter from the Federal Reserve’s oldies collection.

Back in the early 1960s, in an effort to stimulate a sluggish economy, the Fed — working hand-in-glove with the Kennedy administration’s Treasury Department — instituted Operation Twist. This maneuver called for the central bank to buy long-term Treasury bonds and simultaneously sell government paper with shorter maturities. Read 

Forget the Fed — It Won’t Matter Until 2013

Sep 20, 2011, 5:43 pm EDT
Forget the Fed — It Won’t Matter Until 2013

Federal Reserve Chairman Ben Bernanke will be center stage at the Federal Open Market Committee meeting Wednesday. Will investors be greeted by some big news from Bernanke? Is there a so-called “Operation Twist” in the works?

Highly unlikely. The sad reality is the Fed just doesn’t have a lot of punch left. On top of that, Bernanke and the rest of the Fed are not very interested in making a lot of noise right now as critics sharpen their knives after QE2.

It all adds up to a whole lot of nothing from the Federal Reserve – today, tomorrow, and across every day for the next two years. Read 

Global Markets Continue Downtrend on Greece Woes

Sep 20, 2011, 9:00 am EDT

Stocks in Asia, Europe and North America are falling as contagion from the Greek debt crisis continues to impact markets worldwide. Until there is some resolution, investors should expect this to continue along with intermittent sharp moves up thanks to central bank liquidity injections.

Trouble began in Asia last night with the Hang Seng in Hong Kong falling 537 points, or 2.8%. It closed at 18,918, well below the critical 20,000 support level. The Indian Sensex was down 188 points, or 1.1%, to 16,745. It has been leading Asian markets down and is trading on top of a very large gap made in May 2009. The Nikkei in Japan managed to buck the trend and close up 195 points to 8,864 or 2.3%. It has been mostly trading below key support at 10,000 since March when the Tohoku earthquake struck. All three markets are in a technically bearish trading pattern.

No part of the globe can escape what is happening in Europe. EU finance ministers said Friday they would delay authorizing a new installment of emergency funds for Greece until October. Greece still is on its first 110 billion euro bailout, but the final payments have yet to be made. A second bailout has yet to be fully approved, although the terms have been set. Greece’s fiscal situation continues to deteriorate rapidly despite all the funding it has received from the EU and the IMF. The bailout money is life support for Greece. If the plug is pulled, the patient defaults. Read 

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