Tag Archive | "Politics"

Government Explained To An Alien

“OK, so government isn’t a monster; and it isn’t a building, and it’s not politicians…it’s something else.”

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Government is merely a group of people who think they’re special enough to order around other adults, take their money, and commit organized violence.

You cannot delegate powers to a group of other people to do things that you do not have the power to do, like rob your neighbor, or go to another country and commit mass murder.

The tragedy of our time is that so many crimes are committed in the name of “government.” People are misled to believe that an elected subset of a population is justified to operate outside the moral boundaries set for each individual.

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Homeowner Equity Points Down The Road To Serfdom

The capital structure of US real estate assets has been in a long process of change. By subsidizing real estate and making mortgage debt artificially cheaper than equity capital, the US government has been effectively transferring real estate ownership from individuals to lending institutions and the Federal Reserve. Here’s how this game has been unfolding, and a warning to Americans that they will one day wake up in a country where most people live as feudalistic peasants, beholden to their banking and political overlords. Continue Reading

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Obama Wants To End Mortgage Tax Break

The White House is urging Congress to limit, or cut, the once untouchable tax break for mortgage interest. In traditional class warfare parlance, the White House cap on mortgage interest deductions will fall only upon the “wealthy.” Let’s not drink the Obama Kool-Aid – the effects of this legislative move will impact everyone.

The Obama administration is proposing reducing deductions for homeowners who earn more than $250,000 pear year. Since I’m a southern California Realtor®, I’ll bring up an example from my local market – the South Bay; in particular, Manhattan Beach, CA.

Chart from LA Times Local Neighborhoods.

Manhattan Beach is a wealthy southern California city, nestled along a prime beach-front location. With 38% of Manhattan Beach residents earning over $125,000 per year, we expect this legislative change will materially impact our local market.

When many home buyers calculate the amount of home they can afford, mortgage interest deductions on income factor heavily into capital service capacity, i.e. how much mortgage they can comfortably afford to pay every month. If a high income earner is in the 34% income tax bracket and has a $5,000 per month mortgage, of which, say, roughly $4,000 is comprised of interest payments, the net annual benefit of the tax break is $16,320, or $1,360 per month.

with a simple 5% mortgage rate, the effect of removing the tax break amounts to reducing home values by $326,400, or 34%, the marginal tax rate. These are very simple assumptions; the reality of this legislative change will likely not be as severe. Higher end properties will likely be impacted the most, with falling price levels manifesting in some way throughout the entire housing market.

President Bush attempted to eliminate the mortgage tax break in 2005, but was stopped by Congress. The Obama administration tried this same legislative change with last year’s budget, but met similar obstacles. Given that the real estate market is in such turmoil, and that so many people gain advantage from perpetuating this tax break, it is unlikely the White House proposal will be accepted by Congress.

What Does The Mortgage Tax Break Mean For The Economy?

There is no free lunch in economics – we’ve all heard that term, right? The same is true for tax breaks, or any legislative market manipulation. Enabling borrowers to write off interest payments from their income tax liability increases incentives to borrow money to buy real estate. This ultimately skews capital structures in that less equity investment is made with purchases relative to debt assumption. Increasing debt levels simultaneously increases prices and risk. In essence, the mortgage tax break causes housing to be “over-capitalized,” siphoning disproportionate capital resources from other parts of the economy.

Eliminating the tax break makes good economic sense; however, the result will inevitably be a deflation in housing prices. The magnitude of the deflation is uncertain. Given that real estate markets are already on shaky grounds, reducing, or eliminating, policies that support home prices can potentially lead to a market route.

All things considered, it is too bad President Bush was not able to repeal this tax break in 2005. That was probably the best time to moderate an over-heated market, and realign national capital resources in a relatively stable environment. We may have missed that opportunity for some time.

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Home Ec For The Modern Times

Home Ec For The Modern Times

Japan’s Home Ec classes are a tad more modern than ours. Instead of egg babies, they have robot babies.

These are especially popular now, as Japan is trying to encourage it’s females to have babies. You see, the once booming Japan is suffering dire economic consequences because their population is at an all time low, with a birthrate at 1.37%. Compare that to 2.12% in the US. Put simply, people are not having babies. This is causing severe economic problems for the country, which doesn’t allow immigrants. Continue Reading

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Socialists love Facebook!

Socialists love Facebook!

For everyone that has a Facebook account, the status updates can be a powerful tool to get your opinions across to your friends-sometimes I just can’t believe what some people say! A closet socialist friend of mine posted a congratulatory post about Obama’s Nobel Peace Prize… Continue Reading

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Book Review: 5 Steps To Freedom

Book Review: 5 Steps To Freedom

The shackles of serfdom are being silently fastened to America. Every dollar Congress spends beyond its budget, every Federal Reserve Note printed, every tax, regulation, and government intrusion into our lives renders us less free. Ever wonder why it feels like it’s increasingly difficult to make ends meet? Remember the days when one spouse could work, the other raise the kids, and still save for a comfortable retirement? Those days are gone, but why? What’s next? The 5 Steps to Freedom: How To Cut Your Dependence On Institutions And Escape Financial Slavery, by Jeff Nabers explains what happened to our once prosperous society and how we can all take definite steps to escape what is to come. Continue Reading

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America's Effective Tax Burden: A Nation of Serfs

America's Effective Tax Burden: A Nation of Serfs

This article is dedicated to the growing segment of American society that is awakening to the ideas that we are increasingly overworked and overtaxed. My goal is to determine an effective tax burden on the average middle-class American. I will leave it to the reader to judge relative severity of the burden as measured against associated “benefits” to which he is “entitled” from the system. Continue Reading

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Now is not the time to give up

B Y LAWRENCE W. R E E D

reed_4erd1These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated.”

So began the first of 16 pamphlets under the title “The American Crisis,” by patriot Thomas Paine. These very words were read aloud to General George Washington’s forlorn and
bedraggled men on Christmas 1776, the night before the Battle of Trenton.

Consider the backdrop: For the six months since the Declaration of Independence, Americans had been in almost constant retreat. To a disinterested observer, the American cause must have seemed hopelessly quixotic. To many patriots as well, it appeared all but lost. But Paine’s stirring words helped give the troops the morale boost they needed. The next day they accomplished the impossible, capturing nearly the entire force arrayed against them. Desertions plummeted and reenlistments soared.

Lovers of liberty need a little Paine today in the face of all the pain around us. It seems at times that the world has gone mad. Companies that lose billions are being bailed out by a government that loses trillions. The same federal Leviathan that outlaws competition in first-class mail delivery but still can’t deliver letters at a profit now supposedly knows how to run auto companies, banks, and insurance firms. Debt, deficits, bureaucracy, regulation, government spending—the depressing stuff already in frightful superabundance pre-financial crisis—now threaten our diminishing liberties more than ever before. The cover of the March 15 issue of Newsweek proclaimed,“We Are All Socialists Now.”

No Sunshine Soldiers

Maybe we have good reason to feel like those dispirited troops on Christmas Day in 1776, but
we should learn from what they did just a day later. We can either be summer soldiers and sunshine patriots, or we can let the very principles we profess be our rallying cry for the battles ahead.

Eternal optimist though I am, I admit that pessimism really tugs at me when I read the morning papers. At every speech I give these days, there’s a sizable portion of the crowd that seems ready to crawl under a rock and let the world go to a statist hell in a hand basket.

But then I ask myself, what good purpose could a defeatist attitude possibly promote? Will it make me work harder for the causes I know are right? Is there anything about liberty that an election or events in Congress disproves? If I exude a pessimistic demeanor, will it help attract newcomers to the ideas I believe in? Is this the first time in history that believers in liberty have lost some battles? If we simply throw in the towel, will that enhance the prospects for future victories? Is our cause so menial as to justify deserting it because of some bad news or some new challenges? Do we turn back just because the hill we have to climb got a little steeper?

Readers of this magazine [The Freeman] should know the answers to those questions.

This is not the time to abandon time-honored principles. I can’t speak for you but someday I want to go to my reward and be able to look back and say, “I never gave up. I never became part of the problem I tried to solve. I never gave the other side the luxury of winning anything without a rigorous, intellectual contest. I never missed an opportunity to do my best for what I believed in, and it never mattered what the odds or the obstacles were.”

A Tradition of Courage

Remember that we stand on the shoulders of many people who came before us and who persevered through far darker times. The American patriots who shed their blood and suffered through unspeakable hardships as they took on the world’s most powerful nation in 1776 are
certainly among them. But I am also thinking of the brave men and women behind the Iron Curtain who resisted the greatest tyranny of the modern age, and won. I think of those like Hayek and Mises who kept the flame of liberty flickering in the 1930s and ’40s. I think of the heroes like Wilberforce and Clarkson who fought to end slavery and literally changed the
conscience and character of a nation in the face of the most daunting of disadvantages. And I think of the Scots who, 456 years before the Declaration of Independence, put their lives on the line to repel English invaders with these thrilling words: “It is not for honor or glory or wealth that we fight, but for freedom alone, which no good man gives up except with his life.”

As I think about what some of those great men and women faced, the obstacles before us today seem rather puny. We just need to gird our loins. We have to get a lot smarter and better at reaching more fellow citizens with a compelling alternative to the dead hand of the corrupt and incompetent State. We need to put confident smiles on our faces and sally forth.

Time to Rally

We should not squander a second feeling bad for ourselves. This is a moment when our true character, the stuff we’re really made of, will show itself. If we retreat, that would tell me we were never really worthy of the battle in the first place. But if we resolve to let these tough times build character and rally our dispirited friends to new levels of dedication, we will look back on this occasion someday with pride at how we handled it. Have you called a friend yet today to explain to him or her why liberty should be a top priority?

Nobody ever promised that liberty would be easy to attain or easy to keep. The world has always been full of greedy thieves and thugs, narcissistic power seekers, snake-oil charlatans,
unprincipled ne’er-do-wells, and arrogant busybodies. Sometimes they’re nattily dressed in custom-tailored, pin-stripe suits and give good speeches; sometimes they’re bedecked in jewel-studded robes and give lousy speeches; on yet other occasions they wear well-worn street clothes and don’t bother with a speech at all as they hold you up. It doesn’t matter how they’re dressed or what they say. No true friend of liberty should just roll over and play dead for any of them.

Wipe that frown off your face and get to work. Liberty’s future depends on you.

Lawrence W.Reed is the president of the Foundation for Economic Education

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Top 10 Signs You Are A Socialist And…Challenged

Top 10 Signs You Are A Socialist And…Challenged

After extensive research we’ve concluded that these are the Top 10 Signs you just might be a Socialist:

1. You advocate for equality for all and yet you want to raise taxes on certain social classes.
2. You support the troops but do not support the war and you did not support the war in Iraq but now you support the war in Afghanistan. So… do you want war or not?
3. You believe in bigger Government and yet you advocate for the government not to run your life.
4. You think that we shouldn’t outsource labor and yet you complain about the rising cost of consumer goods.
5. You want the Government to take control and regulate all private businesses and yet you work for or own a privately owned business.
6. You want to get paid the same as everybody else, but the average income in the US is probably less than what you are making.
7. You think that the Government should spend more money to stimulate the economy when the Government has no money.
8. You think that the tax increase will not affect you.
9. You sit around and wait for the Government to “help” you.
10. You blame the economy for putting you in the situation that you are in even though you’ve been in the same situation for years.

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Freedom Under Fire, Apr. 21st, 2009

Freedom Under Fire, Apr. 21st, 2009

Rep. Jane Harman exchanged favors for power-aided Israeli lobbyists accused of espionage, top government investigator says that bank bailouts are open to fraud, Obama tells Cabinet to cut spending by 0.02%, U.S. Treasury estimates it has lost $900 million of taxpayer money from holding $301 billion in Citigroup junk assets, Russian tariffs take toll on U.S. companies, and could the U.S. be headed for a Russian-style economic collapse circa 1998? Continue Reading

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