Category: Uncategorized

–What can save California?

An alternative to popular faith

California is broke and billions in debt. It’s unlikely California can pay its debts with tax increases and/or spending cuts, either of which could destroy the state’s economy. Tax increases and spending cuts always cause national recessions; the same would likely happen to California.

The best solution for California, and for all the other states in financial trouble, is to have the federal government step in with the necessary billions, which it easily could do. The government merely would credit California’s checking account at the Federal Reserve Bank, and debit its own balance sheet — a step it can take as easily, as repeatedly and as endlessly as the Rose Bowl scoreboard changing a score.

However, that won’t happen under current circumstances. The debt hawk belief that federal deficits are a problem, makes such support politically toxic. There are, however, two events which could force the federal government’s hand: Bankruptcy or disaster.

If California were to announce it planned to declare bankruptcy, businesses world wide would be threatened with ruin. Remember, California is one of the largest “nations” in the world — reputedly the 8th largest ( CALIFORNIA ) ahead of Russia and Spain. The federal government could not ignore such a threat, and would have to pay some or all of the bills, by a direct infusion of money.

Or, it could delay the inevitable, by lending California money ala Greece. (Loans to GM and Chrysler et al do not provide a model, because California cannot lop off large sections of its business and turn away from its citizens as companies can. So such loans, or even loan guarantees, just would put California deeper in debt.)

The other “solution” for California, though having terrible human consequences, would be to undergo a sufficiently large disaster, the most likely being a huge Los Angeles, earthquake, perhaps in the 8.0+ range. The government would declare LA County, perhaps even Southern California, a disaster area, and step in with the billions necessary to rebuild. Many of those billions would spread around the state, allowing the economy to recover.

Yes, FEMA didn’t rebuild New Orleans as it should have, but Louisiana doesn’t have California’s political clout, with only 9 electoral college votes compared to California’s 55.

I don’t know whether Governor Schwarzenegger has begged hard enough for federal support. Perhaps he is waiting for “the Big One.”

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Is gun control possible?

An alternative to popular faith

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Jesus: “all they that take the sword shall perish with the sword.”
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Recently, a Chicago off-duty policeman was shot and killed by four good-for-nothing bums, who decided it would be a lark to commit armed robbery. Ho hum. Another Chicago murder. Another good life lost.

Is there any way to stop the killing, or at least slow it? In answer to that question, we must consider a few facts:

  1. Most murders are committed with guns
  2. Millions of Americans want guns.
  3. The gun lobby is powerful.
  4. Even the Supreme Court ignores the first phrase of the 2nd Amendment, to make anti-gun laws unconstitutional.
  5. Gun manufacture, import and sales are quite profitable.
  6. Prohibition of something people want never works.
  7. There is widespread belief that anti-gun laws leave criminals armed and honest people unarmed.
  8. Chicago, and most other cities, do not have fully staffed, fully trained police. Money has gone elsewhere.

So, what to do? Here are a couple thoughts. Though none is a complete solution, a few worthwhile partial solutions could move us in the right direction:

Make each manufacturer, seller or provider of a gun liable for the use of that gun.

If you make or sell or give someone a gun that is used in a crime, you are responsible for that crime. Harsh? Unfair? Some states have “dram shop” laws, making a tavern responsible for damages where intoxication was at least one cause of the damages. Sell liquor to a drunk; the drunk commits a crime; you go to jail.

If you feed someone liquor in your home, and that drunk drives a gets into an accident, you could be found guilty of aiding and abetting a crime.

These laws are weak (they generally don’t apply to the manufacturer, importer, wholesaler or package liquor dealer), are different in every state, and are difficult to apply across state lines, but the point is, they do make sellers liable for a product they sell, even though they themselves didn’t misuse it. So even these woefully weak laws make bartenders a bit more cautious about selling drinks to doubtful people.

The precedent, of making a seller liable for the misuse of product he sells, could be extended to guns. Gun manufacturers, wholesalers, retailers, even private citizens, would be liable for crimes committed with guns. So you, the gun provider, better set up a system to prevent your customer, or your customer’s customer, from misusing the gun.

Rather than trying to outlaw gun ownership, which for the above-mentioned reasons won’t work, merely make gun ownership more costly. Sellers probably would have to buy expensive insurance, the cost of which would be added to the cost of the gun.

I visualize a clearing center that would track every gun sale in America. All manufacturers, wholesalers, importers, retailers and private citizens would be required to submit a report on the purchaser of every gun.

The clearing center could be financed by a tax on gun sales and ownership. Just as we tax the sale and ownership of homes, cars, liquor and cigarettes, we could tax the sale and ownership of guns. The tax also could be used to hire, train and equip more police, as increasing police presence deters crime.

Under the economic theory “money changes everything,” making gun ownership more expensive, and making gun sellers more wary about liability, and hiring more police could together reduce the availabiltiy and ownership of guns — and reduce the murder rate.

Would this eliminate guns? No.
Could honest people still obtain guns? Of course.
Could criminals still obtain guns? Sure.
But the increased cost, the clearing house and the added police represent a step from the current, insufficient control for the single most dangerous, easily available product the world has ever known.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Undocumented immigrants

By now the world has seen the video: A little girl asked Mrs. Obama why the president was “taking everybody away that doesn’t have papers.”

“That’s something that we have to work on, right? To make sure that people can be here with the right kind of papers,” Mrs. Obama said.

“But my mom doesn’t have any papers,” the student said. In an interview conducted after the event, the 7-year old girl told a reporter: “I’m a big girl and I don’t want to be left with nothing. I could almost die.”

The right believes the law is sacred. The left believes people are sacred. Antonin Scalia and Clarence Thomas believe in “original intent.” Ruth Bader Ginsburg says the both world and the Constitution have changed markedly. The right feels law changes are Congress’s domain. The left feels Congress often violates the Constitution, which is the reason for the Supreme Court.

And while those august ladies and gentlemen debate arcane passages and footnotes and what Thomas Jefferson, John Adams, James Madison et al “really meant” in 1787, and whether or not those intentions apply to today’s world, and while Arizona will expend a great deal of time, money and effort to increase deportations, a little girl, an American citizen, worries that her mother may be deported.

And I wonder, why do we choose to hunt down and deport undocumented immigrants? Do undocumented immigrants cause more problems, commit more crimes, take more jobs, than documented immigrants from the same country? Why is gaining documentation so difficult? Does the many-year’s wait add to our wealth or security? Would America be a better, safer, wealthier, more productive place if we could get rid of undocumented immigrants?

Any thoughts?

Rodger Malcolm Mitchell

–Worried about your children and grandchildren paying the federal debt?

An alternative to popular faith


     The debt hawks claim to be concerned about your children and grandchildren, but their proposals actually will punish your heirs. The debt hawks say future taxpayers will pay for today’s federal deficit spending. This is factually wrong. Unlike state and local governments, the federal government does not spend tax money. It, in fact, destroys the tax money sent to it, and it creates new money, ad hoc, when it credits the bank accounts of creditors. Federal spending is not limited by, or related in any way to, federal taxes. Thus, taxpayers never have, nor ever will, pay for federal spending.

    What the debt hawks fail to mention is that their solutions (raising taxes and cutting federal spending) to this non-existent problem will impoverish you, your children and your grandchildren. Here is a sampling of debt hawk proposals. Read them carefully, and think about each proposal’s effect on current and future generations.

Retirement:
    Raise the normal retirement (Social Security) age to 68
    Reduce scheduled Social Security benefits
    Reduce Social Security spousal benefits
    Increase taxes on Social Security benefits

Health care:
    Tax insurance benefits
    Tax employees for employer-paid premiums
    Cut Medicare payments
    Cut Medicaid payments
    Raise Medicare premiums
    Cut spending on graduate medical education
    Raise the Medicare retirement age (again)
    Cut federal Medicaid funding to states

Jobs:
    Do not enact a new jobs bill

More taxes; higher taxes
    Raise taxes on higher incomes
    Increase the inheritance (“death”) tax
    Increase the gas tax
    Enact a VAT tax
    Increase the payroll tax (FICA)
    Eliminate the mortgage interest deduction
    Eliminate state and local tax deductions
    Tax life insurance benefits
    Eliminate EITC (Earned Income Tax Credit for low and moderate income workers
    Eliminate the $400/person making-work-pay credit
    Eliminate the “American Opportunity” college tax credit
    Add and excise tax on high-cost health plans

Military and Security:
    Reverse the “Grow the Army” initiative (fewer paid soldiers)
    Reduce purchases of weapons systems
    Reduce veterans’ income security benefits
    Reduce Homeland Security spending

Aid for the poor:
    Cut food stamps
    Cut average unemployment benefits
    Cut temporary assistance to needy families (TANF) program
    Cut funding for adoption and foster care

Education:
    Cut federal funding of K-12 education
    Cut school breakfast programs
    Cut funding for the education of disadvantaged and disabled children

Infrastructure:
    Cut federal highway funding
    Cut funding for bridge repair

Research & Development:
    Cancel NASA missions to the moon and Mars

States and Cities:
    Cut mass transit funding
    Cut federal funding to the states and cities

This is the world — a world of higher taxes and fewer benefits — the world the debt hawks propose for you, your children and your grandchildren.

And what is the federal debt the debt hawks worry over? The federal government spends by crediting the bank accounts of its vendors. Every credit demands a debit, and this debit on the government’s balance sheet is called “debt.” It more properly should be called, “money,” because the way the government creates money is by crediting bank accounts. That balance sheet merely is a score sheet, showing how much money the government has created.

You don’t owe it, nor do your children and grandchildren. It’s just a score sheet.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity