You would think I could let it go. I can't. It's the upcoming election. It's the "economic crisis." It's the 80 gazillion dollar bailout. It's my last post on how taxes work. I can't let it go.
We are electing the wrong people. I don't mean Republicans vs Democrats. I mean they are all wrong. Way Wrong. One party is just a sham for socialists that also want to take away all your individual freedoms. And the others party is a sham for socialists that want to retain some of your individual freedoms. There was a time when it was "economic freedom" vs "personal freedom" -- and each party had a tiny bit of something to offer. But ever since W. has proved to be even a bigger socialist than FDR, "economic freedom" has become a thing of the past. Pundits on the late night talk shows giggle of our naivety -- how we could have been so silly to think "economic freedom" was a good thing way back when. It's a forgone conclusion.
One side promotes "trickle down" economics. The other promotes "bubble up" economics. They both have accepted that taxation is an ever increasing absolute. They just are arguing over who should pay the most unfair amount. Forgotten in the conversation is the fact that money is being taken from people by force and being spent on things they are philosophically opposed to. It would be one thing if we were being forced to buy the things we want. But that, again, isn't how it works.
When all else fails, oversimplify. There is nothing better than taking a complex topic like taxation and government spending and reducing it to a simpler concept -- even if it isn't logically correct. So let's just compare how government works to how real life works, shall we? The most important lesson I ever learned about personal finance was this (and I have ranted many times about it before): It is not what you earn, but what you spend that determines your wealth. I cannot tell you just how important this lesson is. The biggest raise I have ever received in my life was a 40% cut. Ellie Mae and I were living the typical American life. We were not overtly in debt, but we had car loans and house loans. We paid off our credit cards every month. But at the end of the month, we pretty much had spent the same amount we earned -- spent on crap I might add. Usually it was spent in a restaurant or on something that we didn't even have anything to show for. But when Ellie Mae was hating life and decided to leave the corporate hell she was in, we managed not only to get by on 40% less, but to actually get ahead. In about 10 years, I am semi-retired (which, I might add, is a euphemism for unemployed). Better still, I am semi-retired with no loans.
So when it comes to taxes, let me make the same statement: It's not how much tax revenue you take in ... or even who you take it from. It's how you spend it. I get so goddamn angry as they argue over who should pay more or who should get the next tax cut, when the real issue is "why don't you spend less?"
Let's compare my own economic story with those of our various leaders, shall we?
- After losing the presidential nomination, Hillary Clinton has been reported to be anywhere between $10 - $36 million in debt. (The amount varies with the source and date of the story.)
- Dennis Kucinich owed almost a half a million from his 2004 attempt at the presidency before he ran up another cool million and change on his 2008 bid.
- John Glenn reportedly owes $3 million from his 1984 run for president.
- Failed Democratic presidential candidates from 2008 include: Joe Biden ($1.2M), Chris Dodd ($380K) and Bill Richardson ($317K).
- Failed Republicans include: Rudy Giuliani ($3.6M) and Mitt Romney ($44M!).
- Special Bonus Honorable Retarded Mention goes to Joe Biden. This "common man" has reportedly refinanced his home 29 times since 1972. (And let's be clear here... if you owe $730k on your house, you cannot portray yourself as a common man -- even if you do ride the train.) Okay, Joe: when it comes to economics, you're doing it wrong. Firstly, it sounds like you have a tendency to buy more than you can afford. Next, it sounds like you are willing to leverage your soul forever to do so. If you cannot pay off your house in 15-20 years then you just cannot afford it. Can't retire? I wonder why with an eternal house payment on a $3 million dollar home. Maybe you should just vote up a whole bunch of benefits for retirees so you can pay it off. His net worth at age 65 is estimated to be $150k! Dear jebus, keep this guy out of fixing our economy! I say again: You're doing it wrong, Joe. You want a poster child for how we got into a housing bubble? Look no further.
There has to be something wrong here. I might also suggest that the trail of blood leads to the losers, but isn't it possible... or even probable that the winners hedged their winning on debt as well? And who is more likely to be bought or finagled? Someone that is paid in full? Or someone that owes his soul? Let's not also forget that even the "losers" are still generally in public office and are prime candidates for political favors. Let's also also not forget that with millions in debt, the jobs they are seeking are $400k (president) and $165K (congress). While neither of these is chump change, they certainly are not worthy of multi-million dollar risk unless there are other rewards. I say if you cannot afford to get elected for cash (your own or that of donors) then you should be legally barred from running.
And if you cannot afford your own stupid life, you cannot afford to be economically ruling the rest of us. These folks are leveraging the country in the same fashion as they leveraged themselves: We'll just pay for it later. Or someone will. Or there will be some insurance policy that pays off the estate when I die.
Well, when it comes to the life in the USSA, the payment comes from the next generation. I might also add here that the next generation has been brought up to believe that Mom & Dad will pay for everything. (Mom & Dad did it with a credit card.) So they pretty much feel entitled... and we are expecting them to shoulder this burden? I don't think there is a math scholar alive that can make that one work out.
And the bailout? What's the purpose of that? Well, if you listen to the knuckleheads that got us into this mess (and the same ones we are trusting to get us out) the purpose is to get more credit out there. More credit? Someone is not paying attention in class. It seems to me the whole reason we are here is due to too many people taking too much credit.
If you want out of this mess, you need capital. You need cash. You need assets. Promoting debt is no cure. It is an offering of a bandaid to a man that was just run over by a train.
"Gosh, you are really overweight. Can I offer you a slice of pie?"