Happy New Year!  About That Fiscal Cliff....

While I'm eager for the festivities to begin and party dresses and good wishes to abound I'm having a moment of foreboding as I think about elected government leadership whose approval rating is in the teens and in secret, behind closed doors, is playing politics with the amount of money that will be taken from you and from me starting tomorrow.  And the president has just signed an executive order giving this same leadership a raise (for excellent performance?).

I'll briefly share my thoughts and then it is off to ring in the New Year and pray for God's blessings.

Thought # 1:

There are NO tax cuts for anyone on the table.  The federal income tax discussion is about keeping rates where they are now or raising rates.  NO tax cuts. Only around 50% of Americans even pay federal taxes.

Thought # 2:

How did we get “into this mess?”

The genesis was failed government policies that forced lending institutions to sell mortgages to people who could not afford a mortgage.  We were told that this was done because everyone is entitled to the American Dream of home ownership.  Problem  is that home ownership isn’t the American Dream everyone is entitled to.  Everyone is entitled to freedom and the pursuit of the American Dream as each person defines it.

This one failed policy led to foreclosures, property values plummeting, financial institutions failing, corruption, collapse of the stock market, recession,  unemployment,  and unsustainable bailouts, stimulus and spending, all funded with tax payer dollars. 

Thought # 3:

What is the government doing since this spending is unsustainable?  

The government is borrowing $4.8 million each day, 48 cents out of every dollar spent. Republicans will likely give in today on the tax hikes they were elected to oppose for the promise to get "spending cuts later."  Ronald Reagan learned his lesson when he allowed tax increases for this promise that never came about.  He then cut taxes and prosperity ruled the day.

Thought # 4:

The amount in additional taxes collected from top earners would run the government for a few days.  This is not an answer.  

Thought # 5:

Where is the discussion among lawmakers about cutting spending?

Question: What do we responsible American families do when we have debt and spending is higher than revenue?  We cut spending.  What we cut varies from household to household depending upon a number of factors including level of wealth.  For example,

• We cut out vacations, down size cars and lifestyle, eliminate luxury spending.
• The children leave private school for public school and boarding summer camp is eliminated in favor of local camps.
• We eliminate dinners out, movies at the theater, cable TV, new clothes.
• We put off projects around the house, we sell the house and move to an apartment, lower the thermostat in the winter, make cost conscience decisions at the grocery store.
• Perhaps it motivates some of us to eliminate tobacco and alcoholic beverages.
• And for some of us we sell the car and use public transportation, cut off the thermostat except on the coldest days, and cut back meals to one or two a day.

We rarely go to our employers and successfully demand a raise.

Next question: What does the government do when it has debt and spending is higher than revenue?

• Borrow more....
• Insult our intelligence by telling us that they are making budget cuts when in reality they have only raised spending 5% instead of the baseline 8%.
• Talk about the need to close “loopholes” such as mortgage interest deduction as if this legitimate deduction is a tax cheat ploy instead of the economic incentive it was meant to be. Eliminate the charitable deduction so we can have less freedom to give our money to worthwhile charities and instead pay that money in taxes so the government can decide the "winners" and the "losers."
• Extol the unemployment rate at 7.7% hoping most Americans are not informed enough to know that the rate came down because unprecedented numbers of Americans left the work force because they couldn’t find jobs.  Therefore these Americans no longer “count” in unemployment figures.

Thought # 6:

What happens when someone loses a job in this weak economy with businesses closing daily? 

Unemployment rarely covers the out of work person’s expenses. It doesn’t take long until paying expenses depletes the savings account, foreclosure proceedings begin, self esteem plummets and the unemployed person looks to the very source of the problem for help – the government, funded with tax payer money.  Government policies lead to impoverishment, dependence on government, and eventually a system that cannot be sustained.

Thought # 7:

We are told that the tax rates for large corporations should go down but at the same time small business rates, employers of the majority of Americans, should go up (for families making $250,000 a year and above.  These income brackets represents the small businesses who file as individuals).

Small businesses can’t invest in new equipment, expansion and employees.  Employees' hours are reduced and in many cases let go.  New employees aren’t hired.

Thought # 8:

How does taxing “the rich” more help everyone else?  

Well it runs the government for a few days and in no way positively changes the lives of the rest of the country.  My “rich” neighbor paying more does nothing positive whatsoever for me. My income doesn’t go up.  In fact “the rich” paying more is devastating.  Income tax is an obstacle to most Americans acquiring wealth.  I am actually hearing people I know say they are relived that they don’t make $250,000 or their taxes would be going up.  Our government is implementing policies that discourage ambition and success.  This tax policy won’t affect the mega rich – maybe punish them for success and let them bear the burden for running the government for a few hours.

Time's up!  Let the festivities begin! Five hours and counting until 2013.  Wishing God's blessings for us all.

Good Reading

The Declaration of Independence and 

The Constitution of the United States of America

This 56 page booklet tells the story of our glorious founding and a form of government which had, as James Madison said, “no model on the face of the earth.”

It is critical for the continued success of the United States that (1) citizens and people elected to act as trustees representing them maintain the Constitution and (2) students in American schools learn about the founding of our nation which will include the Declaration of Independence and the Constitution.  The Declaration assures equal rights and the Constitution states the government was to be limited to protecting those rights. If America is to survive as founded we must return to the moral foundations of these documents and ensure that our liberties are protected.

These booklets are available from the Hillsdale College book store for a nominal cost. 

Hillsdale College in Michigan, whose motto is “Pursuing truth and Defending Liberty since 1844” requires every student to complete a one-semester course on the principles, meaning, and history of the Constitution.  Hillsdale has made the course available online at no cost. 

The Barney Charter School Initiative has provided an incredible resource to schools entitled The Constitution Reader.  I’m attaching the link to this free interactive resource for your enlightenment and enjoyment.  

The U.S. Constitution: A Reader 

Constitution Course from Hillsdale College 

Killing Kennedy

I just finished reading Killing Kennedy by Bill O’Reilly and Martin Dugard.  It is an excellent account of John F. Kennedy’s last days before his assasination during a campaign trip to Dallas in 1963.  This book was hard to put down.  I look forward to reading Killing Lincoln by the same authors.  Both books have been #1 on the New York Times Bestseller list.

The Richest Man Who Ever Lived

This short powerful book will change the way you look at success and failure, wealth and happiness.  Steven K. Scott shares solutions to life’s problems through the Book of Proverbs and King Solomon’s secrets to unimaginable wisdom and success.  I especially learned from the chapter about the power of partners.  “Without counsel plans are frustrated, but with many counselors they succeed.” Proverbs 5:22

Mr. Scott shares his failure in two of his own businesses and six of seven jobs and on job number ten partnered with his mentor for radically different results.  Partners will help you accomplish your dreams.    Solomon’s experiences teach us that with effective partners we can win battles that would otherwise be lost, we’ll gain wisdom that will serve us the rest of our lives and in hard times we’ll have someone to help us out.  Solomon also warns  of reaching out to the wrong partners.

How Do You Kill 11 Million People?

If you've got 45 minutes you have time to read a wake up call by Andy Andrews.  Eleven million - 11,283,000 actually - is the number of people killed in Nazi Germany between 1933 and 1945.  Andrews shows how a citizenry that is largely apathetic, uninformed and "not interested" in politics can suffer terrible consequences.  How do you kill 11 million people?  "Lie to them."  

Hitler rose to power in a time of challenging economic conditions and promised in his campaign speeches whatever the current audience wanted to hear. It is a fact that only approximately 10% of the German population actively supported Hitler but the remaining 90% largely stood by and watched.  As Andrews says, "Mothers and fathers held their voices, covered their eyes, and closed their ears....And when the Nazis came for their children, it was too late."

One of the most unsettling stories in this short book is that of members of a church who could hear each Sunday morning the whistle of a train roaring down the tracks directly behind their place of worship.  While these eyewitnesses had heard about what was happening to Jews in Nazi Germany they largely blocked it out distancing themselves from it.  However it was hard to block out the cries and screams of the people in the cattle cars as Jews and other prisoners were transported by the church to the death camps.  But block them out they did.  When the church members heard the whistle and accompanying screams they sang their hymns louder and louder until they no longer heard the horrifying sounds.

Andrews' book is a wake up call to become informed citizens who demand the truth and integrity from the people elected to lead. The murder of innocents - in Nazi Germany, Cambodia, the Soviet Union, North Korea and countless other nations - didn't come about overnight.  It started with a too trusting population that didn't demand the truth and largely stood by and watched.  

Andrews quotes Hitler who said, "How fortunate for leaders that men do not think.  Make the lie big, make it simple, keep saying it, and eventually they will believe it."