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A Billion Here And a Billion There! January 10, 2011

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Originally Published December 17, 2010

By Dan Mangru
One key premise of negotiation is to frame the deal within the context that everyone wins. Everyone wants to feel that they got what they wanted. Nobody wants to be a loser.

Well, today in Washington, D.C., there are no losers, just politicians.

You see, Republicans wanted to extend the 2001/2003 tax cuts for all Americans. They believe that lower taxes are key to running an economically viable nation.

That’s not altogether a bad idea.

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Democrats feel that increased spending and lower/middle class tax rebates are the way to get our struggling economy back on track.

(Column continues below)


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That’s debatable, but there are some good uses for government spending. The sad thing is that those cases are few and far between.

For instance, cyber security and space exploration are examples of good government spending. Having our national databases hacked by the Chinese and relying on the Russians or the Chinese for a ride up to the space station … not such good ideas.

But I digress. I mean why have things like cyber security and a space program (which is being phased out by the Obama administration) when you have so many other important things to spend on in a new stimulus … err, I mean…Tax Cut Bill.

You see, like Rahm Emanuel says, you never should let a good crisis go to waste. Here America was in crisis facing a massive tax hike in the middle of a recession. Congress literally had to act now as the holidays were approaching and the tax hikes ready to rear their ugly head come January 1.

This was an opportunity. Sure, Congress could have just passed an extension of the tax cuts. But that would have been too easy.

Congress also could have followed the law and passed a dollar in spending cuts for every dollar in tax cuts per the Reagan-era PAYGO law. But that would have been too responsible.

So what did our friends in Congress decide to do? They decided to pass a win-win deal for Democrats and Republicans.

The Republicans wanted an extension of the tax cuts no matter what. The Democrats were happy to give that to them at a price.

In the end, an extension of some tax cuts ended up being a $990 billion debacle.

Yep, that’s right, $990 billion (although I presume that it was strategically valued at $990 billion so that it wouldn’t be over the magic $1 trillion mark, but then again has there ever been a government budget figure that wasn’t underestimated?). This bill is even larger than the $787 billion Obama porkulus bill.

So what’s exactly in this $990 billion bill? Necessary items for the growth of our nation, of course.

Some of the goodies in our beloved tax cut bill are the railroad track maintenance credit, a 7-year recovery period for NASCAR raceways, accelerated depreciation for business property on an Indian reservation, tax credits for mine rescue training, tax incentives for investment in the District of Columbia, and special tax breaks and subsidies for the rum industry.

Eureka!

What’s really been ailing our economy is that rum prices are just too high. Why should we pay $20 for a bottle of Capitan Morgan? That’s ridiculous.

Well, good thing that the new tax cut bill addressed that with a $235 million subsidy for rum makers in Puerto Rico and the Virgin Islands.

Whew! Crisis averted.

Yet, our friends in Congress didn’t stop there.

It turns out that the ethanol lobby didn’t feel like they were getting their fair share, so they got $6 billion.

Technology companies such as Microsoft and Boeing wanted in on the action, so they got $6 billion too.

All in all about $55 billion of goodies handed out to friends. Ah, the change that we can believe in. Apparently, the only thing that really changes is which party to blame this time.

It gets even worse. Had Congress just passed the income tax cuts ($359 billion), Alternative Minimum Tax Indexing ($140 billion) and the Estate Tax Changes ($68 billion), the total cost of the bill would have been $568 billion as opposed to $990 billion.

So how does the bill almost double in size?

Well, throw in about $56 billion in unemployment payments for people who have been out of work for up to 99 weeks, add in $120 billion of a payroll tax holiday, $21 billion of refundable tax credits, with a $146 billion dash of business expensing writeoffs, and a sprinkle of $80 billion so-called business tax extenders (i.e. major government subsidies for green technology), and you can start to see how the bill becomes so big.

Now for the $64,000 question: how do we pay for it?

Well some of you might suggest that we cut existing spending to pay for new spending.

While that might seem logical, you must remember this is Washington, D.C., that we’re dealing with.

Why do things like cut spending, and balance the budget, and pay down the national debt, when we can crank up the old printing press?


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You guessed it, Obama is just going to put in a call to his buddy at the Federal Reserve Mr. Bernanke, and tell him to oil up the machines because he needs a fresh trillion dollars printed up ASAP.

Don’t you just wish that you could fire up your HP printer at home and just start printing money? When the power bill comes every month, don’t worry about it. Just make sure that there is ink and paper in the printer and you’ll be just fine.

While that seems preposterous to you and me, this is the real power that our president has, and he’s teaming up with Congress to put our country further in debt.

Keep in mind, because Obama “compromised” by extending the Bush tax cuts, he’s going to expect the Republicans to “compromise” by extending the debt ceiling.

Currently, the U.S. is only legally authorized to have $14.3 trillion of debt. However, that can be changed by an act of Congress. And when President Obama reminds the Republicans that their tax cut bill was the trillion dollars that put them over the edge, the Republicans will cave in to his demands to allow the nation to go trillions more in debt.

How high can the ceiling go?


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It just depends how high Obama is willing to ask. Maybe he’ll go for just another trillion. If he’s daring maybe he can push the debt ceiling to $17 trillion maybe, even $19 trillion. After all, he is the Compromiser-in-Chief.

So in the end every political party got what they wanted, a win-win deal. Republicans got tax cuts and Democrats got more spending.

Yes America, only in Washington, D.C., can we make a deal that not only increases spending but decreases tax revenue. Simply put, we have to pay for more with less.

Hopefully, when the new class of representatives and senators comes into office next year, we will have a change for the better. Maybe the threat of the Tea Party can keep newly elected politicians honest.

For our sake, I hope so.

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Top Headlines: November 5, 2010 November 5, 2010

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US Added Jobs Last Month for First Time Since May

GOP Leaders: Sarah Palin Must be Stopped

AIG loses $2.4 billion on asset sales

Health-care law likely to stay – for now

Obama: “Leadership Isn’t Just Legislation”

Toyota…Predicts Second-Half Plunge

 

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Why Obama Is No Roosevelt – WSJ Opinion Piece November 4, 2010

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Why Obama Is No Roosevelt

Roosevelt: ‘Your government has unmistakable confidence in your ability to hear the worst without flinching and losing heart.’ Obama: We don’t ‘always think clearly when we’re scared.’

By DOROTHY RABINOWITZ

Whatever the outcome of today’s election, this much is clear: It will be a long time before Americans ever again decide that the leadership of the nation should go to a legislator of negligible experience—with a voting record, as state and U.S. senator, consisting largely of “present,” and an election platform based on glowing promises of transcendence. A platform vowing, unforgettably, to restore us—a country lost to arrogance and crimes against humanity—to a place of respect in the world.

Deputy editor Daniel Henninger, editorial board member Matthew Kaminski, and WSJ.com columnist John Fund analyze tomorrow’s referendum on Obama-Pelosi governance.

We would win back our allies who, so far as we knew, hadn’t been lost anywhere. Though once Mr. Obama was elected and began dissing them with returned Churchill busts and airy claims of ignorance about the existence of any special relationship between the United States and Great Britain, the British, at least, have been feeling less like pals of old.

In the nearly 24 months since Mr. Obama’s election, popular enthusiasm for him has gone the way of his famous speeches—lyrical, inspired and unburdened by the weight of concrete thought.

About the ingratitude of Democratic voters the president brooded in a September Rolling Stone interview. “If people now want to take their ball and go home,” he declared, “that tells me folks weren’t serious in the first place.” His vice president, Joe Biden, had a few days earlier contributed his own distinctive effort to seduce Democrats back to the fold by telling them to “stop whining.”

The results of this charm campaign remain to be seen. What’s clear now is that we’ve heard quite enough about the “angry electorate”—a peculiarly reductive view of citizens who’ve managed to read all the signs and detect an administration they were not prepared to live with.

Martin Kozlowski

rabinowitz

rabinowitz

Nothing wakened their instincts more than the administration’s insistence on its health-care bill—its whiff of totalitarian will, its secretiveness, its display of cold assurance that the new president’s social agenda trumped everything.

But it was about far more than health-care reform, or joblessness, or the great ideological divide between the president and the rest of the country. It was about an accumulation of facts quietly taken in that told Americans that the man they had sent to the White House had neither the character or the capacity to lead the country.

Their president was the toast of Europe, masterful before the adoring crowds—but one who had remarkably soon proved unable to inspire, in citizens at home, any belief that he was a leader they could trust. Or one who trusted them or their instincts. His Democratic voters were unhappy? They, and their limited capacities, were to blame.

These are conspicuous breaks in the armor of civility and charm that candidate Obama once showed—and those breaks are multiplying.

At a Democratic fund-raiser a few weeks ago, the president noted, in explanation for the Democrats’ lack of enthusiasm, that facts and science and argument aren’t winning the day because “we’re hard-wired not to always think clearly when we’re scared.” The suggestion was clear: The Democrats’ growing resistance to his policies was a product of the public’s lack of intellectual capacity and their fears.

Decades ago another president directly addressed Americans in a time of far greater peril. “Your government has unmistakable confidence in your ability to hear the worst without flinching and losing heart,” Franklin Roosevelt told his national audience. The occasion was a fireside chat delivered Feb. 23, 1942. No radio address then or since has ever imparted a presidential message so remarkable in its detail, complexity and faith in its audience.

It was delivered just a few months after Pearl Harbor, a time when the Allied cause looked bleakest. It would be known to history as “The Map Speech.” The president had asked Americans to have a map at hand, “to follow with me the references I shall make to the world- encircling battle lines of this war.” He took them through those lines, the status of battles around the globe, the enemy’s objectives, centers of raw material and far more. By the time they had finished poring over their maps with him they had had a considerable education.

It is impossible to imagine what might have been the effect if the current president, who is regularly compared to FDR—always a source of amazement—had tried anything like a detailed address explaining, say, the new health-care bill. Though this would have required knowledge of what was actually in the bill (a likely problem) and a readiness to share that news (an even greater one).

Election Night at Opinion Journal

Visit WSJ.com on Tuesday night for live commentary from The Wall Street Journal editorial board.

Despite the ongoing work of legions grinding out endless new and improved proofs that FDR was a despoiler of democracy and our economic system, it is worth remembering the reason virtually all serious historians rank him among the top three of our greatest presidents.

Franklin Roosevelt led the nation through 12 years begun in incomparable national misery virtually to the end of the war. When he died, an anguished country mourned as it had not done since the death of Lincoln. Americans trusted him. The story is told of a man found weeping when Roosevelt’s funeral train went past, who was asked if he had known the president. “I didn’t know him,” he replied. “But he knew me.”

The times are now vastly different—no one expects a candidate with the powers of an FDR these days. But the requirements of leadership don’t change. Despite charm and intellect, Americans have never been able to see in Mr. Obama a president who spoke to them and for them. He has been their lecturer-in-chief, a planner of programs for his vision of a new and progressive society.

Plenty of suggestions, none of them feasible, are in the air now about how he can reposition himself for 2012, and move to the center. Mr. Obama is who he is: a man of deep-dyed ideological inclinations, with a persona to match. And that isn’t going away.

The Democrats may not take a complete battering in the current contest, but there is no doubt of the problems ahead. This election has everything to do with the man in the White House about whom Americans have lost their illusions. Illusions matter. Their loss is irrecoverable.

Ms. Rabinowitz is a member of the Journal’s editorial board.

The Mangru Moment on China Currency Manipulation – The Mangru Report Episode 21 October 27, 2010

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While Congress passes a new resolution to label China as a currency manipulator, Dan Mangru evaluates whether this is just political posturing or real policy.  China recently unpegged its currency (the yuan) from the U.S. dollar but has seen more pressure from the U.S. to allow it’s currency to appreciate so that U.S. manufactured goods would be cheaper to Chinese consumers.
During this Mangru Moment, Mangru also takes a hard look at whether the U.S. should fight it’s battles with China via the media, whether the U.S. should be focused on growing the Chinese market, and what’s ultimately best for America.

 

 

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Healthy School Lunches – Taxation By Representation – The Mangru Report on Fox Business October 12, 2010

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As Congress continues to debate a new bill to implement healthy school lunches across the country (HR 5504, Improving Nutrition for America’s Children Act), The Mangru Report panel of experts composed of John Browne (Euro-Pacific Capital), Anthony Pulieri (United Bullion Group), and Jim Knight (The Knight Group) discusses the merits of the bill and whether this is solving an epidemic problem or just more government spending.

The panel also weighs whether the healthy school lunches should be income based as opposed to being distributed to all students, whether food stamps should be cut to pay for it, whether physical fitness programs should accompany the healthy lunches, and whether the government should be intruding further into our lives.


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New Poll: Was George W. Bush a better President than Barack  Obama? – CLICK HERE TO VOTE

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Exclusive: Breaking News – New Deal Extends Bush Tax Cuts for 2 More Years October 6, 2010

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*** This is a breaking news alert from The Mangru Report ***

Our sources in Washington D.C. have just informed us that Republican Minority Leader Rep. John Boehner has reached an agreement to extend the Bush tax cuts across the board for an additional two years. The vote on the measure will be taken before the election.

Keeping the Bush tax cuts in place for all Americans keeps the personal income tax brackets from rising roughly 5% for all income classes, but more importantly keeps capital gains taxes and dividend taxes at 15% instead of raising them to 20% and 39.6% repsectively.

For the latest updates on this situation check back on The Mangru Report website www.themangrureport.com or sign up ABSOLUTELY FREE for our insider’s club on the right hand side of our website by entering your email address, so that you can have breaking news updates delivered right to your inbox.

LTC Allen West 9/11 One-On-One Interview with Dan Mangru – The Mangru Report – Episode 17 September 11, 2010

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Thank you for watching today’s episode of The Mangru Report.  We hope that it gave you some new insight on 9/11 and reminded you of the day that America should never forget.  We will be releasing various extended coverage items of that episode on the website throughout the next couple of days.

In case you missed it, here’s our interview with LTC Allen West. Watch West West discuss the war on terror, why we need to properly identify our enemy, carrying the memory of those fallen on 9/11, fighting for freedom, and ultimately why we can win the war.

Also to find out more about the victims of 9/11 CLICK HERE NOW  to visit Legacy.com’s 9/11 Tribute.

The Mangru Moment – Episode 9 – The Mangru Report July 19, 2010

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If you’ve ever wondered who’s behind the Cap-And-Trade Agenda, this is a video that you have to watch.  Watch Dan Mangru’s revealing “Mangru Moment”  about Franklin Raines from Episode 9 of The Mangru Report.

It appears that while he was the CEO of Fannie Mae Franklin Raines developed a system for the trading residential carbon emissions, or what we now know as Cap-and-Trade.  Since he was working for Fannie Mae, technically Fannie Mae owned the patent to the Cap-and-Trade system.  But after Raines shamefully resigned his post he filed a second patent application which superceded the first one, and give him and his partners the sole patent on Cap-and-Trade and removed any claims to the patent by Fannie Mae’s or the taxpayers.

“More Of” or “Moron”, Regulation Nation, & The Mangru Moment on the BP Oil Spill July 14, 2010

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As part of our best of series for episodes 8-11, we’re bringing you the following three segments: “More Of” or “Moron”, Regulation Nation, and The Mangru Moment, all from episode 8.  For videos and descriptions see below:

Dr. Nouriel Roubini is calling for more aggressive central bank policies and money printing as the answer to the financial crisis in Europe.  Ben Bernanke says that the economy cannot handle higher taxes or spending cuts.  Tim Geithner doesn’t seem to get much out of the Chinese during his “negotiations”.  So who’s a “more of” and who’s a “moron”?  Find out in Episode 8’s edition of “More Of” or “Moron”.

The easiest answer for any problem according to the government is to put a new “watchdog” on the case.  So when bank rating agencies were on the Congressional hotseat, our friends in Washington D.C. got the great idea of putting a new agency/bureaucracy on the case.  Find out more about this in our Regulation Nation segment.

As the BP oil spill continues to go on and one, did you ever wonder where were the other countries to help America?  Everytime there is an earthquake in Haiti or a financial crisis in Greece doesn’t the U.S. always come to the table with at least a couple billion?  Find out the answers in Dan Mangru’s “Mangru Moment” from Episode 8 of the Mangru Report.

Casey Research CEO Olivier Garret One-On-One with Dan Mangru – The Mangru Report – Episode 11 July 14, 2010

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As the financial reform bill moves closer to reality, Casey Research CEO Olivier Garret warned the viewers of The Mangru Report how the big banks will use the financial reform bill to consolidate their power.  Although though the financial reform bill gets derivatives traded on an exchange, Garret warns that there are too many loopholes in the bill and it just adds to government bureaucracy.  Garret also shares with Dan Mangru his thoughts on E.U. austerity, and the gold trade.