Tuesday, November 24, 2009

Fiscal Responsibility, Or Politics As Usual?

Reports have surfaced that some leaders of the Democratic party are calling for a "War Tax" if The United States is to move forward with its efforts in Afghanistan.In an effort to appear fiscally responsible, Rep. David Obey (D-WI) and Sen. Carl Levin (D-MI) are amongst those who have put forward the concept of a tax on Americans, specifically targeting the wealthy, as a means to fund any further deployment of troops and continuation of the now eight year old conflict.

As a concept this is not completely wrongheaded; we need to fund our expenditures, and there is a lot of money being spent overseas in an effort to provide security to our nation and the world. It is the politics of the proposition that I believe need to be called into question.

For ever and a day politicians from both sides of the aisle have been spending tax dollars like drunken sailors at a strip club; put something remotely attractive in front of them and they are sure to cough up the dough.

Most specifically, with Democrats holding the majority in both chambers, Congress has signed into law the $787 American Recovery and Reinvestment Act of 2009 "Stimulus" bill, as well as the $700 billion TARP Reform and Accountability Act of 2009. Both of these pieces of legislation were passed without forward-thinking fiscal accountability. Essentially, our government planned to either borrow or print the money needed to pay for both of these bills. Both have been terribly mismanaged, and have proven to be extremely misguided expenditures of taxpayer dollars. The closest anyone might come to having a defense for TARP is that America was teetering on the brink of economic disaster and that TARP kept us from certain depression; there is no defense for the "Stimulus," period.

Suddenly we are informed by Congressional representatives that there is a need for fiscal responsibility regarding our national security, and something smells fishy about it to me. I suspect that there is a chess game about to be played by the Democratic party on Capitol Hill, and it involves our troops and their livelihood as well as our safety.

President Obama already has adjusted the nation's budget to include wartime expenditures. This was a hot-button topic during the campaign and then immediately following Obama's election leading up to the signing of the FY 2009 Omnibus Appropriations Act, and the language of the Department of Defense section of the 2010 budget clearly reads "Includes $75.5 billion in supplemental appropriations for 2009 and $130.0 billion for 2010 to support ongoing overseas contingency operations, while increasing efforts in Afghanistan and drawing down troops from Iraq responsibly."

Understanding this, we know that the funding for any addition of troops to Afghanistan will in part come from the funding for troops already deployed in Iraq. Additionally, knowing that it is already included in a budget means it will be easier to include in future budgets, with funding to be provided by already anticipated resources. Given that the Preamble of our Constitution reads "Provide for the common defence" I believe that Afghanistan should be prioritized over other issues, and if cuts or restraints are needed for future budgets, certainly other items should be considered less important.

However, what it all comes down to is that this offers a perfect political opportunity for Democrats to put anti-tax representatives, specifically Republicans, behind the proverbial 8-ball. If Republicans or moderate Democrats were to speak out or vote against any legislation that provided additional funding for the troops, the Democrats will instantly jump all over them and make an issue of that position. Claims will be made that these individuals are not willing to do whatever it takes to support our troops, and that they are willing to fight a war but only if it is George W. Bush's war, but now that this war is Obama's to deal with these people no longer support every effort being made to win.

This will be hypocrisy in the highest form possible, of course, given that those who wish to enact taxing legislation have not been fiscally responsible in the past, and likely have no interest whatsoever in moving forward towards a winning end to a conflict that needs to have a positive outcome.

So while these politicians are putting froward the impression that they have suddenly found fiscal responsibility, don't be fooled: it's nothing more than another day in Washington D.C. politics as usual.


Amusing Bunni said...

Every day in Every Way these people get worse and worse. They are just plain shameless and evil.
Thanks for exposing this, Solomon.

blackandgoldfan said...

I heard this on Hannity. Is there no level these jokers will stoop to?

The_Kid said...

Soloman, I've read on Minyanville that the Fed essentially printed 30 trillion to dole out to the banks and other financial institutions, domestic And foreign.

Most people look at the 787 bln that went through Congress and know nothing about the rest of this. The Fed and treasury can print money whenever they want and recently (months ago) stopped reporting money supply. Unheard of.

So, if we can print 30 trillion to give to 'the rich', why not a trillion or two for our own who already have and could pay the ultimate sacrifice for our country?

The_Kid said...

PS - great post, and exactly right.

Soloman said...

Bunni - glad to bring it to you. Seems elementary to me.

This is what Obama is, because this is what DC politics is, and regardless of his sales pitch as an outsider who will 'change' things, Obama is the purest DC politician we've seen in a long time.

Soloman said...

B&G - I didn't hear Hannity, but my local early morning guy was talking about similar concepts which led me to think about it all day long..

You can imagine that brain stew!!

Soloman said...

Kid - thanks for the compliment...

Never heard of Minyanville, I'll have to check it out! Based on everything I've heard, which is similar to what you point out, we'll be a banana republic in the midst of hyperinflation within 3-5 years if they don't manage us correctly.

Of course if they do manage us correctly, we'll just have a massive bout of inflation followed by interest rates through the roof.

Great options.

The Conservative Lady said...

The lefty politicians pushing for a war tax are probably hoping that by doing so the reverse will happen...no one will want to pass any more taxes, so that will be their excuse for pulling out of the war. Reverse psychology?
If anything, our troops trump any other Obama policy and should be funded first. The Congress should refuse to pass any other legislation (health care, cap & tax) until the war is funded. National security first...without that, the rest of the stuff doesn't matter.
Funny how all of a sudden they become fically responsible. Hypocrites.

Soloman said...

TCL - you brought up the other end of possibilities - thank you!

Yes, you're exactly right.. if it's not to raise taxes or call Conservatives anti-troops, it's to have an excuse to pull out completely.

And of course with this Pelosi Congress we know they'll never prioritize funding our troops first...

If they want to quit, just friggin' quit. I'd be okay with it if they'd just be honest and up front about it.

The_Kid said...

Soloman, here's the link on my right sidebar titled Good info, yo

Read Todd's Bio, and then read his stuff for a couple weeks. Takes a little getting used to. These guys were talking about today's situation back in 2005. Well ahead of the curve.

If you have a TDAmeritrade account you can read some of the subscriber content free. *Buzz and Banter. Personally I wouldn't be without it.

I've only been trading gold related stocks since January. Though Gold could get hit with a correction at any time.

Chris said...

Thank you for your great work on this blog. We need to make sure the truth gets out. It is getting scarier then the far right said it would. We need to take it to the streets and never let these liberals take control of our country again. Have a blessed Thanksgiving.

Soloman said...

Kid - thanks for the link. I'll bookmark and check it out.

We've discussed Glenn Beck - I know you find him a bit over the top (I find him entertaining) but he's along the same lines.. been predicting the exact scenario we're in for three or four years now, with incredible accuracy. Funny, now the NYT is quoting him, when usually they've called him "insane, fear monger" etc.

Anyway... I don't have a trading account.. I'm grateful to have work and a workplace that has a 401K plan, since AZ is now the worst in the nation for job losses.

And on a happier note... Have a happy Thanksgiving!

Soloman said...

Chris -

Thank you for your encouragement and compliment! You're right.. we need to keep pumping the information out - no matter how many times something is repeated it is valuable, because that one extra blog post might reach someone who needs to know truth over hype and MSM misinformation.

To you and yours, a wonderful Thanksgiving as well.

The_Kid said...

Soloman, yea, most of the info you'll see there is market related, though it would help you manage your 401k if you decided to actively move it around and time large purchases like a house.

Like right now, we've had the biggest market rally in the history of the market off the recent S%P500 low of 666. Will it continue with a economy unfriendly government? I think even the magic 8 ball would have a hard time saying yes, though the timing of when the market takes another dive and If, is the tricky part. That's what they can help with.

Plus a lot of information that I just find useful about companies, the economy in general, etc.

Though your view of massive inflation with sky high interest rates (and taxes) I think is spot on.

Take the 401k. Do you want to pay taxes on that income now or later after Obama spend more than anyone in history. Rhetorical question. I'm putting most of my investment money in my trading account where I pay the taxes now and will have whatever is in there tax free later (I hope!) God knows what these vampires will do.
I put the minimum amount to get the maximum contribution from my company in the 401 and actually am questioning whether I'm really ahead on that envisioning what taxes are going to be later. That's not even counting for health care, cap and trade and whatever else these stupid bastards come up with.

AZ worst for jobs huh? Man, during the 20 years I lived there up until 2000, I'd say it was the best along with a couple places like Houston.. Maybe this move to Ohio wasn't such a bad move, though I'll never convince my wife of that.

Good Luck sir.