A Billion Here And a Billion There! January 10, 2011Posted by Admin in Dan Mangru.
Tags: billions, boehner, capitol hill, Congress, dc, republicans, spending, tax cut, trillions, Washington
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.
Democrats feel that increased spending and lower/middle class tax rebates are the way to get our struggling economy back on track.
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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.
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?
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?
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.
Tags: business, cost, deficit, Fox, FSA, government, healthcare, hsa, insurance, mcdonald's, news, obamacare, Richard S. Bernstein, spending, tax, The Mangru Report, w-2
The Unseen Costs of Obamacare
By Richard S. Bernstein
Chief Executive Officer,
Richard S. Bernstein & Associates Inc.
Last week, I received two visits from employees, both with the same question: “You mean I’m going to have to pay income tax next year on the health insurance benefits you give me?”
The only answer I was able to give them was: Not yet.
It has been six months since Congress passed the Patient Protection and Affordable Care Act, yet still, we continue to find and learn new things about how the “Obamacare” health care bill will affect the average American.
What my two employees recently learned was that, beginning in January 2011, every American who receives health insurance through his or her employer will see that insurance benefits show up in his or her W-2 form. For the time being, that doesn’t mean they are paying taxes on this benefit – only that they are disclosing the value of that benefit to the government.
Raise your hand if you believe this won’t lead to a new tax? After the midterm election, of course.
Meanwhile, many of the Americans who can least afford a new expense arelikely to see one, unless Congress repeals another facet of Obamacare. McDonald’s Corp. this week announced plans to drop the low-cost, effective health care plan it offers to nearly 30,000 hourly restaurant workers if that clause – which mandates that a certain percentage of revenue has to go to claims rather than administrative costs – is waived. If that happens, those hourly workers – all of whom likely fall into the group of Americans that Obama promised not to raise taxes on, as they make less than $250,000 a year – will find themselves paying significantly more for health insurance.
While this isn’t precisely a tax increase, it creates the same effect: it takes money from Americans’ pockets, many of whom are living paycheck-to-paycheck.
This is a real effect of Obamacare that will affect their quality of life; even more than that, it is a real effect of Obamacare that will decrease Americans’ spendable income – and that will be felt throughout our economy.
I say this as a person who works in the insurance industry, and who strongly believes that our nation’s health care system rode off the tracks many years ago. In some places, Obamacare will help put us back on track: that the bill has removed lifetime limits on insurance coverage; that it has prohibited insurance companies from rescinding coverage, or from discriminating against Americans with pre-existing conditions – these are good things that have been a long time coming.
But, like a young woman preparing for the prom, the cost of changing our health care system isn’t as simple as paying for the ticket. That young woman needs
a dress, shoes, accessories – all things that come with an extra cost. The same is true of our health care bill – everything comes with an extra cost.
And before Americans go to the polls this November – where most will, without a doubt, have health care on the brain – they should understand those costs.
They should understand that employers like McDonald’s Corp could drop their affordable health care plans.
They should understand that the cost of both drugs and hospital visits have gone up since Obamacare’s passage, at least partially because drug companies and hospitals don’t know what the future holds, and want to ensure a cash reserve if their finances take a dive under the new health care laws.
They should understand that, if they currently use a Health Savings Account (HSA) to purchase over-the-counter drugs, allowing them to write off those medications on their taxes, that practice will end under Obamacare.
They should understand that taking money from their HSA for non-medical purposes will no longer come with a 10 percent penalty; now, that penalty will be 20 percent. And they should understand that their Flexible Spending Accounts (FSA) will be capped at $2,500. So the payroll deductions that currently go into Flexible Spending Accounts tax-free will become capped under Obamacare. And in today’s medical world, $2,500 doesn’t go very far.
In all, there are more than 20 examples like this – new, higher taxes that will go into effect under Obamacare, some as soon as January 1, 2011.
And that’s only what we’ve found so far.
Richard S. Bernstein is one of the nation’s top insurance advisors to high net worth individuals, businesses, and charitable organizations. He’s been featured in many national publications and has joined The Mangru Report on Fox Business as a featured panelist. You can find out more about Mr. Bernstein by visting his corporate website www.rbernstein.com
Tags: abruzzo, business, commentary, cut, dan mangru, deficits, democrat, democratic, district 85, finance, florida, Fox, government, house, joseph, pension, representative, spending, state, state budget, talk, taxes, The Mangru Report, tv, unfunded
Watch rising Democratic star and Florida State Rep. Joseph Abruzzo (D-FL) go One-On-One with Dan Mangru. During their interview, Abruzzo shares his thoughts on whether to raise taxes or cut spending, state budget deficits, where to cut spending, unfunded pension liabilities, Charlie Crist, Kendrick Meek and the 2010 U.S. Senate race in Florida. Abruzzo is currently running for reelection to the State House of Representatives in Florida’s District 85.
Tags: bailout, bernanke, business, Capital, commentary, dan, deficit, Dollar, equities, finance, financial, gold, inflation, investments, mangru, spending, taxes, U.S.
It’s probably not a very politically correct thing to say. But when I saw this piece of news a short time back it was the first thing that came into my mind.
I saw the headline on Bloomberg: “Bernanke Says U.S. Should Tackle Debt.”
Apparently our friend, Federal Reserve Chairman Ben Bernanke, is warning that U.S. budget deficits threaten the nation’s long-term economic health and should be addressed soon.
Yeah, Can you believe it?
Now you probably understand the title for this article.
Nobody has done more to increase the deficit of the United States in our entire history than Mr. Bernanke.
Can you say bank bailouts?
Ben Bernanke and his partners in money printing have orchestrated the biggest financial spending spree in U.S. history. To date, Bernanke, Treasury Secretary Tim Geithner, and their associated partners have doled out a whopping $4.6 trillion of your hard earned taxpayer dollars to Wall Street banks and toxic mortgages. Even worse, according to sourcewatch.org, there’s $14 trillion that the U.S. taxpayer is at risk for because of these bailouts.
Editor’s Note: For the complete article CLICK HERE NOW.
Tags: aduro, al, anthony, asset, banking committee, barack obama, brack, capital gains, dan, debt, dividend, group, hedge fund, laffer curve, mangru, nicholas, pulieri, report, ronald reagan, senate, spending, taxes, U.S., United Bullion Group, wall st., world trade center, zucaro
In this segment of The Mangru Report, Dan Mangru along with the Mangru Panel of Experts (Al Zucaro, Anthony Pulieri, and Nicholas Brack) discuss the recent Senate Banking committee vote to raise capital gains and dividend taxes, the laffer curve, inflation, Ronald Reagan, and Barack Obama, as well as hedge fund and Wall St. taxes.
The Mangru Moment – On Ben Bernanke and Deficit Reduction – The Mangru Report – Episode 3 May 21, 2010Posted by Admin in Dan Mangru.
Tags: bailout, banks, barack, ben, bernanke, dan mangru, federal reserve, geithner, government, lecture, mangru, Moment, mortgages, obama, president, report, secretary, spending, tim, treasury, wall street
In this edition of The Mangru Moment, Dan Mangru tackles Federal Reserve Chairman Ben Bernanke. Recently, Bernanke has been lecturing Americans about the need to reduce deficits. What Bernanke fails to acknowledge is that he has spent more money on bailouts and toxic mortgages than any other Fed Chairman in history. Combine that with low interest rate policies and we are seeing how Bernanke is reflating the bubble all over again.
Jim Rogers One-on-One – On Greece Bailout and Social Security – The Mangru Report – Episode 3 May 17, 2010Posted by Admin in Interviews.
Tags: bailout, bowties, Comission, Commodities, cotton, equities, Exchange, financial reform, Fund, gold, greece, inflation, jim rogers, madoff, natural gas, pornography, Quantum, regulation, Rogers Holdings, sec, Securities, silver, Soros, spending, stocks
All the way from Singapore, the Founder of the Rogers International Commodity Index, and the author of A Gift to My Children, Jim Rogers speaks candidly with Dan Mangru of The Mangru Report. During their conversation Jim Rogers explains why the Greek bailout could eventually overturn the U.K., why that’s not the end of the world, why the Financial Reform Bill is a waste of time, why Ben Bernanke can’t get a job, why Madoff got a clean bill of health from the S.E.C., regulators too focused on pornography, his best advice for seniors nearing retirement, and the age old question of why he wears bowties.
Be sure to tune into The Mangru Report Every Saturday and Sunday at 5:30 p.m. on Fox Business Network.