I tried to stay out of this, but. . .

I keep hearing all the talk about raising the debt ceiling.  Of course we have to raise it so America does not default, cause a financial crisis, and effectively destroy the human race!  But raise it at what cost?  I like to use analogies to make sense of complicated issues.  I relate the country's finances to those of the average household.  If you get in trouble with your credit card and hit the limit you can easily contact the bank and ask them to raise your debt ceiling.  Usually they'll be more than happy to do so. 

Is that going to solve your household budgeting problem?  No.  Most families cannot appreciably raise the amount of revenue they bring in (especially in this economy) so what to do, what to do.  To solve the problem you have to cut spending and actually live below your means.

The government has the unique opportunity to raise more revenue (in theory) by raising taxes.  (I tend to believe this actually does not raise revenue but I'll save that for another post)  But should they?  Isn't that like giving more crack to the addict?  We have to break the cycle of outrageous over spending.  Both parties have contributed to this in the past so there is plenty of blame to go around.  But now one party is saying No - we are not going to give you more revenue, just make the necessary cuts. 

In the end I believe a deal will be struck and, yes, the Republicans will have to give a little, but hold firm to your principles people and let's get our fiscal household under control.

I hate this time of year - Part 2

The deadline is tomorrow. Are you ready? Did you eek out every last cent from your tax return? How crazy is this system we have? I just put my returns in the mail today. I don't want to be late. Not only is the tax code way too complicated but we also have to feel intimidated by our own government.

Taxes are a typical example of our government in action. They have so complicated the system that we need not only an entire department (the IRS) but we now have a whole industry of tax preparation experts and software. Imagine what these people will do to health care!

What I hate most though is the hypocrisy. Think about this; we have rich people setting up the rules that are going to tax the rich. Think fox guarding the hen house people. Economic statistics continue to show that in periods of higher tax rates, tax revenue goes down. Now there are two reasons for this. One, high tax rates hurt economic growth so there is less money to tax. Two, the "rich" folks find ways to not pay. The rich in charge are careful to put enough loopholes in for themselves and their contributors.

Warren Buffet himself confirmed this. He was quoted as saying that it's not right that he pays less in taxes then his secretary does. Well who's fault is that? Mr. Buffet I'm sure you are aware that the government will gladly take a check from you at anytime. Or feel free to not claim all your deductions and help this country out. Tell your accountants and lawyers you want to pay your fair share. They'll help you out.

So, as my returns are on their way to the IRS, I'll lay in bed at night wondering if I got my taxes right. Did I maximize my return? Or, did I make a mistake and not pay enough? This will keep me up for a while but then I'll roll over and sleep soundly knowing that, on the off chance I owe back taxes, at least I'll have a place in Obama's cabinet.

It's about the Spending Stupid

Are you listening to all of talk about government spending? It's all about how to increase revenue to pay for things:

• Let the Bush tax cuts expire to pay for the trillion dollar stimulus plan.
• Raise taxes on capital gains and dividends.
• Raise the gasoline tax or tax drivers per miles driven to pay for roads.
• Raise the price of a stamp to "bail out" the post office.

Here's an idea. Cut spending. I mean real cuts, not the political BS where cuts mean smaller increases. Yes I know we are in a recession and we need to increase spending short term to provide a soft landing. But this should be temporary spending. That's why I don't like the package that passed.

The discussion needs to be about cutting spending. As a company grows, there is inherent inefficiencies and excess spending. If you want to survive you make cuts - you go Lean.
That'is what our government must do. Here's an example:

They are talking about eliminating Saturday mail delivery. That is a great idea. I don't think we need Wednesday delivery either but that's just me. This should either reduce the number of mail persons needed or the amount of pay they receive, or both. It should also reduce the need for further stamp price increases.

I'll bet you a 50 cent stamp that's not going to happen!