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    1 Reply Latest reply on Jul 22, 2008 6:54 PM by LUCKIEST

    Getting Your Money's Worth from the Government

    tscheer Wayfarer
      It isn't often that we see a real, tangible result from the assorted
      bureaucrats, technocrats, plutocrats and republicrats that scurry
      around the halls of government. That probably explains why the various
      branches of the U.S. government get such low confidence ratings while
      the military, which thrives on concrete results, is at the top of the
      recent 2008 Gallup Annual Update on Confidence in Institutions
      poll. However, President Bush has delivered on one thing-he lowered oil
      prices by $9.26 per barrel. That is a 6.3% drop on the price of crude
      oil for August delivery.

      How did he manage it? After months of insanely rising oil prices,
      trips to the Saudis to beg for relief, preening and posturing on the
      part of congressional leaders and members alike and grade-school style
      finger pointing by everyone involved, Bush finally remembered that he
      has some power as President and lifted the Executive Order his father
      put in place to stop oil exploration and drilling off of America's
      coasts. In doing so, he challenged Congress to lift their moratorium
      when it comes up for renewal on September 30th. As if to
      demonstrate the affect that such announcements have on the futures
      markets, the price dropped, not after the announcement, but as the President was speaking. Now the ball is in Congress' court.

      They are balking now, that is to be expected, but the question is
      still open as to whether the Democratic leadership concedes defeat on
      what is, for them, an ideological question. The alternative would be
      for them to decide that ideology is far more important than the good of
      the people and so carry on in the face of hard proof that even
      threatening to increase supply will lower prices. You wouldn't think
      that was rational, but ideological thinking is not rational. So, what
      if they do renew the ban? Will they have enough votes to override a
      potential presidential veto? Probably not, but you can never tell.
      September 30th is going to be an interesting day.

      Still, it does seem to beg a larger question: If it has taken this
      long, with so much infighting, and people have had to go to so much
      effort, to get these people in Washington to do what is +right for the people+-as
      opposed to doing what is good for special interests or upholding a
      certain ideology-then why are we paying them so much of our hard-earned
      money? Honestly, if the government was a business, they would have
      failed a very long time ago.

      Cost of Government Day
      That question, what are we paying for, is particularly apt today. It is
      Cost of Government Day. According to Americans for Tax Reform (ATR),
      Cost of Government Day (COGD) is +the
      date of the calendar year on which the average American worker has
      earned enough gross income to pay off his or her share of spending and
      regulatory burdens imposed by government on the federal, state and
      local levels.+ That means not just taxes, but the cost or
      regulation, the deficit, all the hidden costs of government at every
      level. This year, average Americans had to work 197 days just to meet
      all costs imposed by the various levels of government. That translates
      into government as a whole consuming 53.9% of the American income. In
      2007, COGD was July 12th. In 2000, it was June 29th. To the folks at ATR, it means that the cost of government is rising higher than the national income.

      Of course, that is the average American. The fact is that the state
      in which you live determines your real Cost of Government Day. July 16th is the overall national COGD, and that is matched by both Illinois and Colorado. If you live in Alaska, your COGD was June 21st. Other side of the coin, however is as follows:

      Wisconsin -- July 17
      Rhode Island -- July 17
      Virginia -- July 18
      Nevada -- July 19
      Hawaii -- July 19
      Florida -- July 19
      Minnesota -- July 20
      Maryland -- July 21
      Massachusetts -- July 21
      Washington -- July 22
      California -- July 23
      New York -- July 28
      Washington, DC -- July 26
      New Jersey -- July 30
      Connecticut -- July 31


      The COGD Breakdown
      The average American's 197 days of government labor-it is really
      difficult to think of it as working for yourself-breaks down along
      spending and regulatory lines as follows:

      83.7 days to pay for Federal spending
      41.7 days to pay for Federal regulation
      50.5 days to pay for State and Local spending
      20.9 days to pay for State and Local regulation


      How many more days do you want to work to support government
      spending and regulations? The dangers here are in the rising costs of
      current programs and regulations and the threat of new entitlements and
      additional regulatory burdens. It is estimated, for example, that the
      global warming regulations now before Congress, especially the cap and
      trade bills under consideration, would add an additional trillion
      dollars in regulatory costs.

      Soak the Corporations
      More regulatory costs? Corporations will pay them, not people! They make money hand-over-fist, so we can soak them!

      Not really, you see if American corporations were any more "soaked"
      they would begin to dissolve. Corporate taxes in the US are 35%. Add in
      State and Local taxes and that means the average corporation here in
      the US is facing a 40% tax rate. As of 2007, the average corporate tax
      rate was 24%. This is essentially a self-imposed, self-destructive
      tariff that hurts our ability to compete on the world market, keeps
      these companies from creating jobs and further stimulates the flight of
      wealth from the US to foreign countries. As for the thought that it
      isn't people who pay for excessive regulations, remember that, as a
      point of fact, corporations pay no taxes at all. Their customers do. In
      this way, corporations act as tax collectors rather than as tax payers.

      Soak business and we just soak ourselves.
      An Intelligent Tax Policy
      Here, as with the energy question, we return to the shadowlands of
      ideology, where class warfare is the order of the day. That has to end.
      The United States, as a nation and as a people, cannot afford the
      luxury of ideology-driven policies any longer. It is time to see what
      has worked for the immediate and overall benefit of the American people
      in the past, judge the circumstances of those successes and replicate
      them. It doesn't take a complex belief system; just a clear goal and a
      mind open to the lessons of history. So, what might these goals be?
      Here are a few that might be worthwhile:


      Increase government revenues to support public agendas.
      Lower energy costs.
      Stem the flood of American wealth going overseas.
      Increase the amount of foreign wealth coming to America.
      Increase investment in American business to create new businesses and new jobs.


      How can you reach these goals? You need a tax policy that rewards
      success and supports prosperity. From success comes prosperity and from
      prosperity comes all sorts of good things like jobs, good wages, high
      government revenue and so on. Have we ever had that? Sure, quite a few
      times; the most recent being in the 1980s and the mid to late 1990s.
      What did these have in common? In both cases, governmental spending was
      cut-not just the growth of spending but the spending itself-and taxes
      were cut. The result? Deficits dropped or vanished altogether as the
      budget came into balance with higher income and lower spending,
      business flourished, good jobs were created, wealth came into the
      country, energy costs were low. American business was a hot-house of
      innovation and the overall standard of living was dramatically raised.

      Of course, it wasn't perfect. There were those whose fortunes went
      down even as those of the nation as a whole were rising; and there were
      those who took advantage of the situation to enrich themselves at the
      expense of others. Politicians who were not ideologically comfortable
      with the methods used to reach these levels of prosperity took hold of
      these issues and the environmental question and did what they could to
      raise taxes, increase regulations and, in general, flatten the economic
      landscape by "managing" the economy more and more. When that happens,
      taxes rise, spending rises, regulation rises and we all spend more days
      out of the year working for the government.

      Some Specific Ideas
      Many of us just got a so-called economic stimulus check from the
      Federal Government. That was nice. I am not sure it stimulated much of
      anything since so much of it went into the assorted gas tanks of the
      American people and to pay debts, such as student loans, owed to the
      government. Between that and the energy taxes the Feds impose, I am
      sure that Washington has gotten a lot of it back by now.

      The point is that in spite of the pleasure we get from receiving a
      check from the government-as opposed to writing one to the IRS-such
      cash grants are very short term solutions to our economic woes at best,
      and fully useless at worst. Either way, they are not what we need to
      stimulate the economy. What we need is something we have not had since
      the income tax was written into the Constitution: A good,
      prosperity-oriented tax system.

      There are many ways taxes can be reformed, from a simple flat tax to
      the so-called Fair Tax to something that may still have so-called
      progressive elements in it and yet serve to stimulate the economy
      rather than drag it down. The truth is that both the flat tax and fair
      tax are long shots. They don't seem to redistribute enough wealth for
      some politicians and they eliminate government's ability to do special
      favors through the tax code. After all, a 17% flat tax with no
      deductions or credits is not much to work with when you want to reward
      a major campaign donor. So, it is likely that some sort of graduated
      tax scheme will persist. History tells us that any reforms that are
      made to such a system have to reduce the cost of capital.

      History Lesson: America, 2003
      The Bush tax cuts were tiny compared with those of Ronald Reagan and
      John F. Kennedy, yet like their predecessors, they still had a major
      effect. By October, 2003, the Bureau of Labor statistics reported that
      more Americans were employed than ever before. This period also marked
      an increase in business investment. Orders for non-defense capital
      goods rose dramatically, the manufacturing sector improved and
      unemployment claims fell. Moreover, investor confidence was higher than
      it had been in a long time. Why? Because capital was no longer so

      The Bottom Line
      The 2004 Cost of Government Day was July 7th. In 2003 it had been July 11th.
      That is not a huge difference, just 4 days, but those days mean that
      the cost of government rose less than the tax revenue. In 2005, it was
      July 4th. There is the trend. With a prosperity-based tax
      code, Americans worked for themselves a little more each year and for
      the government, a little less. Public policy, especially as it pertains
      to taxation and regulation, has a direct effect on prosperity. The
      greater the taxes and regulation, the lower the prosperity. It is a
      simple formula that has played out time and again throughout our
      history, yet it is a lesson lost on so many.

      Consider the preamble to our Constitution:

      +We the People of the United States, in Order to form a more
      perfect Union, establish Justice, insure domestic Tranquility, provide
      for the common defense, promote the general Welfare, and secure the
      Blessings of Liberty to ourselves and our Posterity, do ordain and
      establish this Constitution for the United States of America.+


      It doesn't speak of parties and it has nothing to do with ideology.
      It is a simple statement that declares the purposes of government; to
      insure justice, peace and safety; to promote prosperity (the general
      welfare of the people) and to secure (not obtain, or strive for, but
      secure) freedom for ourselves and our descendants.

      Is our government doing this? It can be argued that it is doing some
      of these things but certainly not all of them and that is where my
      problem begins. We are not getting our money's worth and a great many
      of those 197 days are simple waste. As long as ideology and political
      rivalry hold sway, the good of the people-the general welfare-will
      suffer. We have suffered from this in the matter of energy and gasoline
      prices, we have suffered in the matter of taxation and until We the
      People make our so-called public servants sit up and take notice, our
      suffering from their political games will continue.
        • Re: Getting Your Money's Worth from the Government
          LUCKIEST Guide
          Getting Your Money's Worth from the Government, You write very well Tim.

          I would or could NEVER write that much on any one subject and yet you have written 5 or 6 essays on different subjects and yes they are so true.

          My Mother use to say "That life was going to be harder for my generation, than hers". I am now saying the same thing about my children and their children.
          And how hard they work to make ends meet. My Father went to work and brought in enough income to buy a new home and keep the family growing.
          I also worked, became self employed and had the luxury of watching my wife and children stay home.

          Today in most families both husband and wife are working (sometimes making great salaries). Children in day care (YES Day Care is also making great money).
          Today's children do not realize the value of money. As long as they get a refunds from the Govt when they file their taxes, they are happy. SO WRONG.
          And with so many companies down sizing, being sold, or just closing, it not getting any better.

          **As you wrote "How many more days do you want to work to support government spending and regulations? The dangers here are in the rising costs of current programs and regulations and the threat of new entitlements and additional regulatory burdens. It is estimated, for example, that the global warming regulations now before Congress, especially the cap and trade bills under consideration, would add an additional trillion dollars in regulatory costs". Not to mention the costs of War
          **All great nations rise and fall. It is my belief that we the USA reached its peak during the Eisenhower Years. Lets see what history says
          **Enough, LUCKIES<br