Right Down Reality

Some Redirection

2011-05-25T13:05:00.000-04:00

I haven't posted any new material in a while on this site as I've created a page on Facebook to get some of my thoughts out there. Search for "Right Down Reality" on Facebook and like the page to continue to get updates. Twitter's still available and I'm always putting something up to keep you guys in the loop. As always, your feedback is important to me

Sensible Ideas in a Senseless World: My ideas for stimulating the economy

2011-04-27T15:31:00.000-04:00

Last week a discussion on the wall of the President’s Facebook townhall left an impression on me. I was speaking to another economist about the policies of the current Administration and we each had different opinions about the success of them. When we came to a wall, the question was asked: What are your ideas then? I had ideas, and I shared them, but it made me think about how much time is spent criticizing others without presenting alternatives. Most of the criticism isn’t even based upon logic, but a personal dislike for the owner of that thought. Well, this gave me the idea of starting a video series explaining the criticisms of the current Administration based simply on economics and presenting alternatives to them.

Now, I’ll warn you, the subject of economics probably wouldn’t be as exciting to you as it is to me, but because it is important enough to affect everyone’s lives than it should be important enough to try to have a better understanding of it.

That being said, I would like to start with our tax code, specifically with the notion of “corporate taxes”. When asked who pays corporate taxes, many of us have been led to believe that the business pays those funds to the government, which is a serious misconception. Taxes are funded solely on an individual basis, and as such a corporation does not pay corporate taxes at all. Businesses are tax collectors on behalf of the government. Think about it. A business treats the tax as any other expense which gets passed down one of three ways: the consumer, employee, and shareholders (as explained in a piece I did in 2008). The pain of paying the higher taxes trickles down to one of the three beneficiaries of the business’ success as long as the business can remain competitive in the market. In a roundabout way, I’m basically saying that the idea of taxing businesses and corporations is another way for politicians to essentially tax the public (without the public being aware of it). Have you ever heard of a politician promising to lower the income taxes for the lower and middle classes, while also promising to get back at those greedy businesses and corporations by raising the corporate tax rates to fund social programs to benefit the growing poor and middle class? Ever notice how wages have stagnated as the cost of goods rise prior to the current recession as early as the 90s? Notice that as the world’s become globally connected, business has left this country to beneficial nations?

Retaining what I just pointed out, consider this idea to stimulate the economy: abolish the Corporate Tax rate completely. Doing so will allow business to have more revenue to play with, which would result in any of the following: stable stocks, expansion (jobs/wages/benefits), lower prices for the consumer. Business overseas will notice the friendly change and move to take advantage of the zero rate, making this country more appealing compared to other nations. If you want true stimuli, this purely economic based act would have an immediate (within a year) impact on the marketplace that would benefit the people. Yet, this act alone would not suffice….

The President recently called for the removal of federal subsidies to oil companies in retaliation to the steady increase in the price per barrel in a letter addressed to the Minority an Majority leaders of Congress with the intention of punishing the private oil companies for the increase in fuel prices. To his base and the uneducated, the idea of punishing big oil is considered a great idea. For the pain of paying at the pump, someone has to be blamed and punished. Just think about this for a second, and also consider what I said earlier about businesses and expenses. The initial shock of having those subsidies removed will dramatically increase the price we’d pay at the pump simply because what we pay at the pump has been subsidized by the government this whole time. In effect, the very people cheering this movement on will be hit the hardest once this action is taken. The trickle down effect will spread to every single industry that uses any product that comes from the oil industry, inflating the prices of food, clothing, housing, etc. Not to mention that when it comes to federal involvement in the marketplace, this is another example of the feds picking which industry wins/loses based on the political climate. In the quest for “fairness” in the marketplace, this is hardly fair business practice.

Couple the zero Corporate rate with a plan to end to all forms of Corporate Welfare. In 2006, the federal government allocated $92B subsidies to many companies including Boeing, Xerox, IBM, Motorola, Dow Chemical and General Electric. The state and local governments collectively paid out $40-50B. I just pointed out that the President is calling for the removal of subsidies to the oil industry simply because the political climate calls for it. I would agree with him, if he would take it further and completely remove all forms of corporate welfare as an economical gesture of good will. The government should be neutral in the choosing of which business receives an incentive over another. This practice of choosing who wins/loses has opened the doors for political corruption, lobbying, damaging policymaking, etc which hurts the average citizen and tainting the political process. By removing the practice, the average consumer has more say in the decisions a business makes and the future of the company. The company would no longer have to concern themselves with trying to obtain subsidies before their competitors by wasting time and money in lobbying efforts to that end, but would have to rely on catering to their customers in order to compete.

There are some concerns about the transition to such a system because there will be some of the same issues. Market influence into politics will never die unless the politicians themselves choose to make decisions that benefit the people they represent and not their campaign coffers. Regulation (a good thing, BTW) opens the door for lobbying/bribery as long as the restrictions are unnecessary, redundant and created for the purpose of assisting special interests. A reduction in some of the government programs that depend on the corporate tax system is a given, much of which can be sustained by removing waste fraud and abuse within them (no, really!) and the influx of jobs would reduce the number of Americans that are dependant on programs like WIC, Welfare, Section 8, etc.

These ideas aren’t perfect, but are simple and address the main concerns of the people in the country. The free market system works…..if the government reduces it’s influence to levels that benefit society as a whole.

For more ideas based on economic principles I've already covered (would coincide with the above):

Business
Social Security
Healthcare
Taxes

Acknowledgement: Michael Ramirez for the editorial cartoon

EAT THE RICH!

2011-04-01T12:57:00.000-04:00

If you don't know.....now you know.

Walter Williams: Up From the Projects

2011-03-22T20:53:00.000-04:00

Very enlightening video with Libertarian, Walter Williams. His views on Affirmative Action, Civil Rights Law, the Presidency of Barack Obama and other interesting subjects. One of my many heroes.

Saudi Arabia Running Out of Oil! Banks Deceiving Clients!

2011-02-09T19:43:00.000-05:00

State of the Union: The Conservative Response

2011-02-05T12:43:00.000-05:00

Saving Social Security with Personal Retirement Accounts

2011-01-10T06:52:00.000-05:00

PSAs have been given a bad rap in the last few years based on fear and desires to retain political power. It's high time to have a reasonable debate on the issue.

HAPPY NEW YEAR!! Same "new" political drama

2011-01-04T19:10:00.000-05:00

I'm somewhat back to my posting abilities. In the meantime, I have a new video up.

Fox News Viewers Are Misinformed Study, The Critique

2010-12-26T21:04:00.000-05:00

BRILLIANTLY DONE!

Being a Haitian American pt2 (with Haitian Mom)

2010-12-22T18:52:00.000-05:00

A light post, I felt I had to represent the culture that made me the man I am today. Enjoy!

PC Issues, Still Working it out

2010-12-20T23:20:00.000-05:00

I'm trying to avoid this, but I may need to purchase a new PC. Here's what's going on:

Purchased this PC 5+ years ago and the Hard drive went kaput two weeks ago
I ordered a new hard drive and RAM card last week that just came in today
Installed that hardware, loaded windows with a generic boot disk
Found that I don't have my Windows XP product key (from 5 years ago)
Microsoft Customer Service pretty much tells me I'm out of luck without the original boot disk
I have 30 days to find a copy of XP with the code
The audio/video driver install disks are missing too, so I have no sound at all

So basically, I have 30 days to post while I scramble trying to find the things I need to get my PC back to 100% Any suggestions to get me there would be greatly appreciated

Obama, Democrats, and Tax Extension Drama

2010-12-09T20:02:00.000-05:00

Yup, It's me covering the recent events...

Obama Gets Busted on Mythbusters!

2010-12-06T18:34:00.001-05:00

Here's where ReasonTV got their sources

Paul Ryan at Fiscal Commission

2010-12-02T20:02:00.000-05:00

Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, ...

2010-11-29T19:38:00.001-05:00

Via Ed Morrissey @Hotair.com:

Think of it as a Cash for Clunkers economic plan on a larger scale. The intention is to fool people into spending money in order to give the illusion of growth, and have that illusion somehow become reality through a process best known as FM; the M stands for “magic,” and you can guess what the F means. The problem is that the interventions run out of steam quickly without addressing the actual issues of income and asset value that drives organic consumer spending. Instead of increasing the size of the pie, we just cut it in different shapes.
The policies implemented in the early 1980s, in contrast, focused on generating growth in investment and income by reducing the government’s role in the economy and their bite out of it. That approach succeeded in long-term growth and prosperity by increasing the size of the pie. Critics scoff at this as “trickle-down economics,” but as the last two years showed, the Reagan approach worked while Keynesian Obamanomics has mainly generated nothing but short-term gimmicks and long-term stagnation

What We Believe, Part 7: American Exceptionalism

2010-11-26T06:13:00.000-05:00

America's unique. Here's why:

Covering the terror behind TSA Travel

2010-11-24T22:01:00.000-05:00

What We Believe, Part 6: Immigration

2010-11-18T06:15:00.000-05:00

The US has no real ethnicity, no unique language to unify us. What unifies this nation is the rule of law. Our nation is conceptually founded on the principle that a free people can set its own laws and those who wish to live free agree to abide by them. Laws that don’t work can be repealed or replaced through the open processes of representative government, and in some cases direct democracy (referendums, in some states). Those who break the laws of a free people should be subject to prosecution — and those who break the law of a free nation in order to gain entry into it should not profit from that lawbreaking.

Thus, illegal immigration and tolerance for it insults those who legally migrate to the US, a process almost everyone supports. It also insults the rule of law to offer those lawbreakers amnesty, especially a second time. Besides, securing the border is one of the few legitimate duties that the federal government has under the Constitution, and perhaps it should focus on doing that right before arrogating other authorities and jurisdictions to itself.

What We Believe, Part 5: Gun Rights

2010-11-18T06:14:00.000-05:00

Bill addresses the plague of gun-related homicides found in the US by pointing out that the epicenters of such plagues rarely coincide with higher densities of legal gun ownership, which means guns are a secondary issue and not the primary cause. It’s impossible to encapsulate Bill’s argument in anything less than the efficient manner in which he does so in this video:

3 Reasons This Election Didn't Change A Thing

2010-11-03T05:42:00.001-04:00

Sorry, but that's reality. Let's not forget that it's lame duck season in Washington. It's up to the NEW Congress and the Senate in January to change this outcome.

What We Saw at the Stewart-Colbert Rally to Restore Sanity

2010-11-01T06:42:00.000-04:00

This is sanity? The good stuff comes at 2:31 - 3:40, 3:45 -3:58, and 5:12 to the end. You really can't make this stuff up.

What We Believe, Part 4: Natural Law

2010-10-29T06:31:00.000-04:00

Bill Whittle examines the difference between Natural and Political Law and what makes some laws worth obeying, while others are overturned.

PSA From Zo

2010-10-27T18:53:00.000-04:00

Zo pretty much covers my position when it comes to race relations and the Conservative message as a whole. Don't focus on race, because that's when you pretty much say what you didn't mean to (like meeting a person with a HUGE zit on their forehead, if try to ignore it, you'll probably stick your foot in your mouth). Be flexible when it comes to accusations of racism, because more often then not, that's all the other person has in a debate. The more time you spend defending yourself on a non-issue, the worse you end up looking. That's just a little bit (with some of my own points) of what Zo's covered.

New study shows ObamaCare subsidies potentially five times higher in first year than predicted

2010-10-21T19:43:00.001-04:00

(Via Ed Morrissey)

In passing ObamaCare, Democrats argued that it would provide a net relief to the budget deficit in its balance of new taxes and fees, drastic cuts to Medicare Advantage, and the subsidies it would provide to Americans making $88,000 a year or less. A new study commissioned by Families USA, a group that supports ObamaCare, shows that the Democrats and the CBO badly miscalculated the level of subsidies provided. In the first year (2014), 28 million Americans would have eligibility for more than $110 billion, outstripping the Congressional/CBO estimate by almost 600%:

Families USA commissioned The Lewin Group to use its economic models to estimate how many individuals would benefit from the new premium tax credits in 2014 and the value of the dollars going to help pay for insurance (see the Methodology on page 12 for more details). We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion.

The new tax credits will provide much-needed assistance to insured individuals and families who struggle harder each year to pay rising premiums, as well as to uninsured individuals and families who need help purchasing coverage that otherwise would be completely out of reach financially. Most of the families who will be eligible for the tax credits will be employed, many for small businesses, and will have incomes between two and four times poverty (between $44,100 and $88,200 for a family of four based on 2010 poverty guidelines). However, because the size of the tax credits will be determined on a sliding scale based on income, those with the lowest incomes will receive the largest tax credit, which will ensure that the assistance is targeted to those who need it the most.

That conflicts with the final CBO estimate that Barack Obama and Congressional Democrats used to argue for ObamaCare. In his presentation to Congress, CBO director Douglas Elmendorf predicted a cost of only $20 billion on health-exchange subsidies and associated costs. The Lewin Group, which conducted the study for Families USA, shows that four times as many people will become eligible for subsidies in 2014 than the CBO predicted in March and that the cost will be 550% higher as a result (page 4 of the linked study):

•„„ Nationally, approximately 28.6 million Americans will be eligible for these new premium tax credits in 2014 (see Table 1).„

•„ People in working families—those with annual incomes at or above 200 percent of the federal poverty level ($44,100 for a family of four in 2010)—will constitute nearly twothirds(65.6 percent) of the people who will be eligible for a premium tax credit (seeTable 1a).

Morgen at Verum Serum discovered the wide discrepancy and notes that the study wasn’t intended to argue against ObamaCare:

The Lewin Group study was commissioned by Families USA, a healthcare reform advocacy group based out of Washington D.C. which is closely allied with the White House and leading Democrats in Congress. Then Senator Obama was a keynote speaker at their annual Health Action conference in 2005 and 2007, and House Speaker Nancy Pelosi opened the 2008 event. Other leading Democrats who have participated at Families USA events in recent years include Hillary Clinton, John Kerry, and Ted Kennedy.

The study appears to be the centerpiece of a major media campaign initiated last month by Families USA to promote the benefits of the health reform legislation. A September 14 press release touts the projected $110 billion in federal subsidies as “one of the largest middle-income tax cuts in history”, but makes no mention of the discrepancy with the CBO’s earlier estimate.
Families USA also published state-by-state estimates by the Lewin Group of the number of people eligible to receive these subsidies and the associated costs. Numerous local media outlets around the country have reported on these figures over the past few weeks.
The CBO’s projection that the healthcare reform bill would reduce the deficit by an estimated $143 billion over 10 years was a critical factor in the enactment of the bill. Democrats lost their super-majority in the Senate in January 2010 when Scott Brown was elected in Massachusetts, and ultimately passed the bill in March only through the use of procedural tactics, and without a single Republican vote in the House or Senate.
The claim that the bill will reduce the deficit continues to be a leading selling point for proponents of reform. Just last month Families USA repeated this claim in a press release criticizing opponents of the legislation. But if the latest Lewin Group estimate is correct the initial 10-year cost of the bill will be significantly higher than what was forecast by the CBO, and would begin adding to the federal deficit as early as 2015.

Morgen also contacted Families USA to get an explanation of the difference, and was told that he made an “apples to oranges” comparison. Why? This survey, they explained, showed how many people would be eligible, while the CBO predicted how many people would actually take advantage of their eligibility for tax credits. This is an odd distinction to make, since the entire idea of the subsidies is to encourage uninsured Americans to buy health insurance through both mandates and generous subsidies. How likely will it be that people will pass on the notion of getting big tax credits to subsidize must-issue health insurance? And if the success rate in applying mandates, higher taxes, and more government authority to the 270 million Americans who are already insured is only 20-25% in getting the other 30 million insured, how is that at all successful?

The deficit projection given by Democrats was apparently based on 75% failure rates to get people into the system; their advocates are busy touting the massive amounts of subsidies in the program that will tip ObamaCare into a deficit exploder in Year 2. Either way this goes, it’s a massive failure.

What We Believe, Part 3: Wealth Creation

2010-10-21T19:28:00.001-04:00

Part 3 of a Series, Bill Whittle covers the concept of being wealthy: what it is, how it is created, and how society progresses as a direct result of it.