The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Tuesday, January 31, 2012

The Sweet California Cash Scam - Browndoggle

Joe:  see below California Politicians are killing California and America. In this troubled economy, they overspent by $2.6 billion. We are going to run out of cash and the stupid California High Speed Rail is now estimated to cost three times as much – in other words the politicians lied, again. The stupid LA Times still thinks we should go for it. I think Margaret Thatcher said it’s easy to spend other people’s money. By the way the rail situation is now being called a "BROWNDOGGLE" after Jerry Brown. -Bob
 
California will run out of cash
January 31, 2012

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June. But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year.

Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.
The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.

Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiangestimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.

With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates."

California borrows money early each fiscal year because the state has regular monthly expenses but receives the bulk of its tax revenues in the spring. The state borrowed $5.4 billion last fall for this purpose.

California High-Speed Rail Authority

Still on board the bullet train

Editorial

Yes, the price tag has tripled and its completion date is 13 years later. But it's still a gamble worth taking.

It's easy to see why many Californians are losing patience with the bullet train.
Voters who were asked in 2008 to approve $9.95 billion in bonds to build a high-speed rail line from Los Angeles to San Francisco were told the project would cost $33 billion and be completed by 2020, yet a more realistic business plan released Tuesday by the rail authority placed the price tag at — whoops — $98 billion and the completion date at 2033. The project has been hitting political snags at every turn, prompting raging disputes over routing decisions, proposed land seizures and its alleged interferencewith freight lines. So fed up is state Sen. Doug LaMalfa (R-Richvale) that he's planning to introduce a bill asking voters to reconsider the original bond measure, even as Republicans in Congress threaten to block future federal funding.

Congress to Cut Off Off-Shoring? - Will it be effective?


Joe: see article below from CRM magazine, it claims that some 500,000 jobs were moved off shore in four years time. The proposed bill is geared to penalize companies by excluding them from federal grants or loans. What the article doesn’t state is if the law would actually apply to anyone and if it would actually have some kind of impact. It may be just for show. –Bob


Congress Moves to Cut Off Off-Shoring
Proposed legislation would prevent U.S. firms that offshore contact center jobs from receiving government funds.
By Leonard Klie

Dec 9, 2011
New legislation introduced in Congress December 7 would prohibit companies that outsource call center jobs overseas from receiving federal grants and loans.

The bill, called the U.S. Call Center and Consumer Protection Act, was proposed by Rep. Tim Bishop (D-N.Y) and co-sponsored by Reps. Dave McKinley (R-W.V.), Mike Michaud (D-Maine), and Gene Green (D-Texas). It would require the U.S. Department of Labor to track firms that move call center jobs overseas; the firms would then be ineligible for any direct or indirect federal loans or loan guarantees for five years.

The legislation (H.R. 3596) would also require overseas call center employees to disclose their location to U.S. consumers and give customers the right to be transferred to a U.S.-based call center upon request. It would further require companies to notify the U.S. Department of Labor 120 days prior to any proposed moves off-shore and require the list of companies that off-shore call center work to be made available to the public.

"It's common sense that we should not be rewarding companies that ship jobs overseas while millions of qualified Americans are looking for work," Bishop said in a statement. "Taxpayer dollars should only be used to incentivize good corporate citizens who create American jobs."

Rep. McKinley called the proposed legislation "a common sense jobs bill that will protect American workers and consumers." "Our taxpayers should not be financing those who send our jobs overseas," he said in a statement.

The bill also has the full support of the Communications Workers of America, the labor union representing about 700,000 telecommunications workers, including about 150,000 call center employees.

"Americans are fed up with good-paying, family-supporting call center jobs here in the United States being shipped overseas so the 1 percent can make a little extra money," said CWA Chief of Staff Ron Collins, in a statement. "This legislation does not prevent them from moving if they want, but it prevents them from gaining access to our tax dollars while they do so."

The bill is also designed to limit the threat of consumer fraud and identity theft at foreign call centers. A new CWA study expected to be formally released next week will spotlight the fact that foreign call centers often lack the type of security measures common in the United States, potentially putting financial, medical, and other sensitive customer information at risk.

"Congressman Bishop’s bill will help to address a serious issue that has bothered most Americans for a long time," said Michael Gendron of Communications Workers of America Local 1108 in Patchogue, N.Y., in a statement. "If you are frustrated by dealing with call centers that are located overseas and having to worry about the security of your personal information, this bill will give you a choice to deal with American workers who must comply with American laws."

According to the CWA, total call center employment has dropped from 5.2 million jobs in 2006 to 4.7 million in 2010, a loss of approximately 500,000 jobs in just four years.

Chinese Debt Really? - Does China have Debt!

Joe:  as you know I think China is way overrated and has been cheating at many things. I simply think they will not disclose any major unfavorable economic information. Here is an article on their debt situation you may find of interest. –Bob

With Her Debt in Tow, Where is China Heading?

By: Michael Pettis   Date: 27 January 2012

Senior Associate at the Carnegie Endowment for International Peace

EconomyWatch Contributor


Before starting on the subject of debt I wanted to make a quick reference to something sent to me by Charles Horner, a senior fellow at the Hudson Institute.  I am glad to say that the overinvestment thesis is much more widely acknowledged today than it was even two or three years ago, but one myth, I think, is that most of the overinvestment excesses in China are concentrated in the real estate sector.  I have always argued that it is infrastructure where the most amount of investment has been wasted.

Its impossible to prove one way or the other, but Horner sent me a paper in the Oxford Review of Economic Policy, by Oxford’s Bent Flyvbjerg, with the rather alarming title “Survival of the unfittest: why the worst infrastructure gets built—and what we can do about it”, which suggests why we need to be so worried about infrastructure spending in China – aide from the fact that the numbers are simply huge.

In the paper Flyvbjerg looks at infrastructure projects in a number of countries (not in China, though, because he needed decent data) and shows how the benefits of these projects are systematically overstated and the costs systematically understated.  More important, he shows how these terrible results are simply the expected outcomes of the way infrastructure projects are typically designed and implemented.

It is not a very happy paper in general, but I am pretty sure that many people who read it probably had a thought similar to mine: if infrastructure spending can be so seriously mismanaged in relatively transparent systems with greater political accountability, what might happen in a country with a huge infrastructure boom stretching over decades, much less transparency, and very little political accountability? Isn’t the potential for waste vast? Who knows, but it seems that Beijing is increasingly worried about that possibility.  Here is an article from this week’s Caijing:

A golden but brief era for urban railway suppliers, builders and related companies across China appears to have ended in recent months.  Local governments nationwide have slashed infrastructure spending since last summer, and the urban rail business has slowed to a crawl after several years of rapid growth.

…NDRC imposed extremely tight regulations on the approval process for subway construction before 2008, said Jin Yongxiang, general manager of Beijing’s Dayue Consulting Firm, which advises subway projects.  Jin said “the situation took a 180 degree turn” in April 2009, when the State Council reduced the minimum capital requirement for urban rail projects to 25 percent. At that time, a NDRC source told Caixin, credit was loose and bank loans were easy to obtain.

“In some cases, the NDRC gave a nod to an urban rail project even if a local government had yet to meet the minimum capital requirement,” the source said. “With NDRC’s approval for subway projects, banks were willing to lend and would not hold city governments to the capital requirement.”  In some cities, though, enthusiasm for the urban railway building went too far.

For example, rail lines were built where few people live on the outskirts of the Hunan Province city of Changsha, said Wang Chengli, an urban transit professor at the city’s Central South University. Today, exit gates for some of the city’s finished subway stations lead to farm fields.  Wang said Changsha authorities installed far fewer kilometers of track in the city’s center than in its suburbs. Each project was approved by the central government, he added.

Zhang says China learned important lessons from the fast-track subway program. For example, he now thinks subways should never have been built in “many cities.”  “The only cities that should have built subways are super-large ones such as Beijing, Shanghai, Tianjin, Shenzhen, Wuhan, Nanjing and Guangzhou,” Zhang said. “Provincial capitals such as Shenyang and Taiyuan can handle their transit needs with a single, light-rail line.”  Subways can be uneconomical in smaller cities. Zhang said final costs for many projects were often much higher than a local government’s estimate.

Little by little the claim repeated by so many China bulls – that you can never spend too much on infrastructure – is being eroded. It is possible, it turns out, to waste a lot of money even on infrastructure, and if debt-fueled investment is being wasted in China, as I have been arguing for over half a decade, then without doubt debt must be rising at an unsustainable pace. Last week Bloomberg had this article, which suggests that even the official numbers, which show debt soaring, may be understating the reality:

 Debt accumulated by companies financing local governments such as Tianjin…is rising, a survey of Chinese-language bond prospectuses issued this year indicates. It also suggests the total owed by all such entities likely dwarfs the count by China’s national auditor and figures disclosed by banks.  Bloomberg News tallied the debt disclosed by all 231 local government financing companies that sold bonds, notes or commercial paper through Dec. 10 this year. The total amounted to 3.96 trillion yuan ($622 billion), mostly in bank loans, more than the current size of the European bailout fund.

There are 6,576 of such entities across China, according to a June count by the National Audit Office, which put their total debt at 4.97 trillion yuan. That means the 231 borrowers studied by Bloomberg have alone amassed more than three-quarters of the overall debt.

The fact so few of the companies have accumulated that much debt suggests a bigger problem, says Fraser Howie, the Singapore-based managing director of CLSA Asia-Pacific Markets who has written two books on China’s financial system. “You should be more worried than you think,” he said of Bloomberg’s findings. “Certainly more worried than the banks will tell you."

Peter Schweizer: Honest Graft

Joe:  I am planning on getting around to reading this book by Peter Schweizer, "Throw Them All Out", looks like an excellent read.


Throw Them All Out

It has received a fair amount of publicity. I heard a radio interview and Peter said he the starting point for him was to figure out how politicians entered office with not much income years later became very wealthy.

A Mr. Plunkitt said, “There is so much honest graft in this big town that they would be fools to go in for dishonest graft.”

George Washington Plunkitt (1842–1924) was a long-time State Senator from the U.S. state of New York, representing the Fifteenth Senate District, who was especially powerful in New York City. He was part of what is known as New York's Tammany Hall machine.


graft [graft, grahft] 
noun
the acquisition of money, gain, or advantage by dishonest,unfair, or illegal means, especially through the abuse of one's position or influence in politics, business, etc.

Peter describes some deals for example, $16 billion out of the $20 billion that Obama handed out went to financial backers of Obama. Another one is Nancy Pelosi, she received 5,000 shares of an almost impossible-to-get credit card stock.

They also make money on what Peter calls "pump-and-dump." Al Gore made and a Silicon Valley investor put in $16 million into a company before a $25 million grant was issued by the federal government and then Gore's investment became $89 million.


Legal Graft, Legal Corruption… Politicians are part of what’s killing America.

They are now trying to pass a law called the STOCK ACT , which also outlines a fantastic history and solution for this problem, which seems to only be getting worse. Apparently, at least one politician thinks the Stock Act is symbolic only, knowing how things have been going lately, if I were a betting man I would put money on his view.

   STOCK Act advances in the Senate


Rep. Sean Duffy Says RESTRICT Act Provides Greater Transparency than STOCK Act
“…Congressman Sean Duffy (R-WI) believes the much-discussed STOCK (Stop Trading On Congressional Knowledge) Act contains significant flaws that render the measure a largely symbolic gesture. “The truth is, there are loopholes in that bill [the STOCK Act] you can drive a truck through,” said Rep. Duffy in an interview with Big Government.

-Bob

Monday, January 30, 2012

Obama is the leader without a plan

Foster January 30, 2012

Bob Greetings,

Another interesting article… -Joe

 

The Man Without A Plan

http://theeconomiccollapseblog.com/archives/the-man-without-a-plan

Barack Obama is a man without a plan.  When you are young, they often tell you to "fake it until you make it", but Barack Obama is taking this to ridiculous extremes.  Barack Obama has absolutely no idea what he is doing when it comes to the economy, and yet he continues to give speeches in which he declares that he is the man for the job.  The State of the Union speech the other night was just abysmal.  The federal government is spending way too much money, and yet Barack Obama is proposing even more government spending.  Entrepreneurs and small businesses are being taxed into oblivion and yet Barack Obama is proposing even higher taxes.  Our economy is being strangled to death by crippling regulations, and yet Barack Obama is proposing a vast array of new regulations.  Barack Obama always gives a nice speech, but it has become appallingly evident that he is totally out of ideas.  So our country will continue to drift aimlessly along without a direction and without a plan until the next financial tsunami comes along and makes things even worse.

And the American people are starting to clue in to the fact that Obama does not have a plan and does not have anything new to say.  Just check out how the audiences for his State of the Union addresses have declined each year....
2009: 52.3 million
2010: 48 million
2011: 42.8 million
2012: 37.8 million

His ratings are falling almost as fast as the ratings for American Idol are. It is amazing how Barack Obama can use so many words to say so very little. He always tickles our ears but then he never delivers the goods.  Toward the beginning of his speech the other night, he made the following statement....

"Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last—an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values"

Well, that sounds pretty good.  Except for the fact that everything he has done for the past 3 years has been the exact opposite of that. It is almost as if he woke up that morning and decided that he would try the whole "do the opposite" thing once made famous by George Costanza on Seinfeld.

Obama says that our employment situation is getting better, but that is not really true.  The only way that the federal government can claim that there is an 8.5 percent unemployment rate is because they have decided that millions of Americans that have been unemployed for a long time should not be considered "part of the workforce" any longer. If the number of Americans that were considered to be part of the workforce was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to approximately 11 percent.

Sadly, the number of Americans that are dependent on the government continues to soar even higher. Since Barack Obama took office, the number of Americans on food stamps has actually increased by 14 million.

Things have not gotten better for average Americans. They have gotten worse. In fact, 10 million more Americans have fallen below the poverty line since 2006.  And in 2010, more Americans fell into poverty than ever before. A lot of people out there are really hurting, and the American people deserve some real answers. But instead, Obama was saying stuff like this the other night....

"I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place"

Oh really? What is Obama actually doing about the things that caused the last financial crisis? The "financial reform" bill was a complete and total joke.  Obama has been shamefully soft on the big Wall Street banks that caused the last crisis.

Today, the "too big to fail" banks are larger than ever.  The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

So now they are more of a danger to the financial system than ever. And not a single Wall Street executive has gone to jail for what they did during the last financial crisis. Thanks Obama. But of course Obama was never going to seriously go after Wall Street. After all, they are the ones that fund his campaigns. Most Americans don't realize this, but 3 of the top 7 donors to Obama's campaign in 2008 were "too big to fail" banks.

And the Obama administration has been absolutely packed with ex-Wall Street bankers.  Last year, Michael Brenner wrote the following about the composition of the Obama administration....

Wall Street's takeover of the Obama administration is now complete. The mega-banks and their corporate allies control every economic policy position of consequence. Mr. Obama has moved rapidly since the November debacle to install business people where it counts most. Mr.William Daley from JP Morgan Chase as White House Chief of Staff. Mr. Gene Sperling from the Goldman Sachs payroll to be director of the National Economic Council. Eileen Rominger from Goldman Sachs named director of the SEC's Investment Management division. Even the National Security Advisor, Thomas Donilon, was executive vice president for law and policy at the disgraced Fannie Mae after serving as a corporate lobbyist with O'Melveny & Roberts. The keystone of the business friendly team was put in place on Friday. General Electric Chairman and CEO Jeffrey Immelt will serve as chair of the president's Council on Jobs and Competitiveness.

During his State of the Union address, Obama also promised to bring manufacturing jobs back to America....

"Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs"

That sounds great, except for the fact that Obama has been doing everything he can to get more American jobs shipped out of the country. The Obama administration has been aggressively pushing new "free trade" agreements with Panama, South Korea and Colombia.  The Obama administration has also made the Trans-Pacific Partnership ("the NAFTA of the Pacific") an extremely high priority.

And of course we have all seen how wonderfully the first NAFTA worked out. Our "free trade" policies have been an absolute nightmare for the American worker. During 2010, an average of 23 manufacturing facilities a day shut down in the United States.  Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.

We are bleeding jobs at a pace that is hard to believe. Amazingly, the United States has lost an average of 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

Yet Obama promises more of the same and that is  supposed to help? During his speech, Obama correctly noted that many foreign manufacturers are heavily subsidized....

"It's not fair when foreign manufacturers have a leg up on ours, only because they're heavily subsidized"

So are we going to deeply penalize those that have been cheating? Are we going to warn them that we will stop trading with them unless they stop? Of course not. Obama is going to do next to nothing to stop what China and other predatory nations are doing to us.

Today, the United States spends approximately 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States, and the U.S. trade deficit with China in 2010was 27 times larger than it was back in 1990.

But the Obama administration doesn't seem to care much about these things. In fact, just check out what U.S. Trade Representative Ron Kirk told Tim Robertson of the Huffington Post about the Obama administration's attitude toward keeping manufacturing jobs in America....

Let's increase our competitiveness... the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don't want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don't want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure.

Oh, but Obama now says that he is going to toughen up on trade....

"I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China. There will be more inspections"

Oh boy - "inspections" - yeah, that is really going to have the Chinese shaking in their boots.

Meanwhile, the Chinese just keep hitting us with new tariffs.  According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States will now cost about $85,000 in China thanks to these new tariffs. So is Obama going to hit China with tough new tariffs in return? Of course not.

Meanwhile, our economy continues to bleed businesses and jobs.  According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue. But if you listen to Obama, he makes it seem like many of our industries are in better shape than ever....

"We bet on American ingenuity, and tonight the American auto industry is back."

Yes, the American auto industry is no longer on the brink of bankruptcy, but it is not "back".  Just consider the following stats....

*In 1970, General Motors had about a 60 percent share of the U.S. automobile market.  Today, that figure is down to about 20 percent.

*Back in 2000, about 17 million new automobiles were sold in the United States.  During 2011, less than 13 million new automobiles were sold in the United States.

*Japan builds more cars than anyone else on the globe.  Japan now manufactures about 5 million more automobiles than the United States does.

*Since Alan Mulally became CEO of Ford, the company has reduced its North American workforce by nearly half.

*In the year 2000, the U.S. auto industry employed more than 1.3 millionAmericans.  Today, the U.S. auto industry employs about 698,000 people.

Obama bailed out the auto industry, and they responded by sending even more of our jobs overseas. During his speech, Obama declared that there will be no more bailouts....

"No bailouts, no handouts, and no copouts."

That is kind of funny because Obama is basically the all-time champion of handing out bailouts.

If Barack Obama and John McCain had not aggressively pushed for the Wall Street bailouts back in 2008, they never would have happened.

And once Obama became president, there was a seemingly endless parade of bailouts and "stimulus packages". So what do you honestly think he will do when the next financial crisis happens?  Do you think he would actually be able to resist the temptation for more bailouts? Obama also says that he wants to spend more money on training for American workers....

"Join me in a national commitment to train two million Americans with skills that will lead directly to a job."

But the American people already have enough training.  There are tons of college-educated Americans that are among the ranks of the unemployed right now. What the American people need are jobs. Unfortunately, jobs are leaving this country at an unprecedented pace.

Back in the year 2000, more than 20 percent of all jobs in America were manufacturing jobs.  Today, about 5 percent of all jobs in America are manufacturing jobs.

Not only that, but our incomes are also going down.  Because U.S. workers now have to compete for jobs with workers that make slave labor wages on the other side of the globe, pay in this country continues to decline.

A recent White House reported entitled "Investing in America: Building an Economy That Lasts" actually bragged that our trade policies have driven wages in America down.  The following chart is from that report....

The Obama administration has been very good for the largest corporations. For the rest of us, not so much. But Obama now says that he wants America to be a place that encourages entrepreneurs and small businesses to thrive....

"It means we should support everyone who’s willing to work; and every risk-taker and entrepreneur who aspires to become the next Steve Jobs."

Unfortunately, the reality is that the federal government is strangling entrepreneurs and small businesses to death with taxes and crippling regulations. According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

That is not a good trend. And right now small businesses are extremely hesitant to bring on new workers. One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers in the coming year.

So obviously what the Obama administration is doing is not working. During his speech, Obama also spoke of developing our own energy resources....

"A future where we are in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world."

Hopefully most of those watching laughed when they heard this, because this had to have been a joke. America is absolutely swimming in oil and natural gas, and yet the Obama administration has blocked the development of those resources at every turn.

Instead, Obama has been very busy trying to push green energy companies on us, but they have had a nasty habit of going bankrupt. During his speech, Obama also spoke of the need for "comprehensive immigration reform".

But apparently Obama's idea of "immigration reform" is to grant "backdoor amnesty" to the vast majority of the illegal immigrants in the United States and to continue to leave our borders completely wide open.

The consequences of such a policy are very serious.  As I wrote about the other day, there are now 1.4 million gang members living inside the United States, and that number has risen by an astounding 40 percent since 2009.

The last thing we need is more "immigration reform" from Barack Obama. Of course the "class warfare" part was the centerpiece of Obama's speech the other night. Referring to it as the "defining issue of our time", Obama said that now is the time to hit the wealthy with higher taxes....

"We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."

This is going to be what Barack Obama is going to base his entire 2012 campaign on.  He is going to try to tap into the economic frustrations of the poor and the middle class and he is going to try to get them to blame the rich and the "party of the rich" (the Republicans). But taxing the rich is not going to solve our problems.  If Bill Gates donated his entire fortune to the U.S. government, it would only cover the U.S. budget deficit for about 15 days.

The truth is that the ultra-wealthy are always several steps ahead of the U.S. government.  The global elite are hiding 18 trillion dollars in offshore banks, and they are absolute experts at avoiding taxes.

No, the people that always get hit when taxes are raised are small business owners that try to do things "by the book" and middle class families that are barely scraping by. What we need to do is to get rid of the income tax system entirely.  It is deeply corrupt and it is full of thousands of loopholes. Trust me, I know.  I used to study this stuff.

But Obama seems to think that taxing the rich is the solution to all of our problems....

"We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to their country’s future, and they know our way of life will only endure if we feel that same sense of shared responsibility. That’s how we’ll reduce our deficit."

Oh really? If we just accept Obama's plan the deficit will be fixed? That worked out so well during his first term.  During the first three years of the Obama administration, the U.S. government accumulated more debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

The truth is that Obama does not plan to fix anything.  Barack Obama's proposed 2012 budget projects that the national debt will rise to 26 trillion dollars a decade from now.  And his budget numbers are ridiculously optimistic. Not that our tax system does not need reform. If we are going to have an income tax system (which we should not), then it should at least be fair.

There is no way in the world that General Electric and Mitt Romney should pay a lower tax rate than you and I do.

In a previous article, I noted some of the big corporations that have made enormous profits and yet have paid less than zero in taxes in recent years....

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice.  These are combined figures for the tax years 2008, 2009 and 2010. During those three years, all of the corporations below made a lot of money.  Yet all of them paid net taxes that were below zero for those three years combined. How is that possible?  Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero. If you have not seen these before, you are going to have a hard time believing some of these statistics.....

*Honeywell*Profits: $4.9 billion    Taxes: -$34 million
*Fed Ex*Profits: $3 billion    Taxes: -$23 million
*Wells Fargo*Profits: $49.37 billion Taxes: -$681 million
*Boeing*    Profits: $9.7 billion    Taxes: -$178 million
*Verizon*    Profits: $32.5 billion    Taxes: -$951 million
*Dupont*    Profits: $2.1 billion    Taxes -$72 million
*American Electric Power*    Profits: $5.89 billion    Taxes -$545 million
*General Electric*    Profits: $7.7 billion    Taxes: -$4.7 billion

Are you starting to get the picture?

Hopefully we can all agree that there is something seriously wrong with those numbers. But fixing holes in the tax system is one thing - blaming America's economic ills on the wealthy is another. During his speech, Obama made the following statement....

"You can call this class warfare all you want"

And yes, we will hear the term "class warfare" over and over again for the rest of 2012. Obama actually believes that "blaming the 1%" can get him sent back to the White House again. But that isn't going to solve any of our problems. Instead, we should be focusing on the root causes of our economic problems.

I would love to see a president get up during a State of the Union address and declare that we need to shut down the Federal Reserve.

Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power. Since the Federal Reserve was created in 1913, the U.S. national debt has gotten more than 5000 times larger. Thanks to the debt-based Federal Reserve system, we are going into debt at a pace that is unlike anything the world has ever seen.

Right now, the federal government is stealing 150 million dollars an hour from our children and our grandchildren. But Barack Obama loves the Federal Reserve.

In fact, he actually nominated Ben Bernanke for a second term as Federal Reserve Chairman even though Bernanke has a track record of incompetence that is legendary.

So no, nobody should be applauding Barack Obama for his absolutely abysmal speech the other night.

He is a man without a plan and he has been an absolute disaster for America.