Gold Rush

“You’ll get nothing, and like it”!

            —Ted Knight as Judge Smails in Caddyshack

 

I told you this was coming.

The Obama administration yesterday—two months late, in violation of federal law (again)—released its proposed 2014 budget.  Among the highlights, it calls for total spending of $3.8 trillion.  Yet despite adding a new “Buffett Rule” tax requiring a minimum 30% contribution from those earning $1 million or more, and cutting (actually slowing the increases in) Social Security spending, still doesn’t balance.  As in 2012, and in 2011, I don’t expect this proposal to get any votes for passage from either Republicans or Democrats, so the likelihood of this coming to fruition this year is low.  But buried in there is a nugget I’ve warned you about and it bears watching.

You’ve probably seen the money grab over in Cyprus the last couple of weeks.  To recap, Cypriot banks—almost entirely government-owned—were over-exposed to Greek debt, such that the Cypriot economy was unable to withstand the negative impacts of European Union measures to deal with the debt crisis there.  Facing collapse, as a condition for a bailout the EU forced the closure of the second-largest bank, consolidation into the largest bank, with the result that depositors with holdings above the €100,000 cap may lose as much as 60% of their accounts.  In essence, the EU compelled the government of Cyprus to confiscate over half of many people’s savings.

Yeah, Rusty, but that’s Cyprus.  I can’t even find Cyprus on a map.  That kind of thing could never happen here.

Think again, Amigo.     

Among the proposals in the President’s budget is a cap on 401(K) savings.  Savings in retirement accounts like 401(K) and IRA devices above $3 million would no longer be eligible for tax advantaged treatment.  Currently, money deposited in those sorts of accounts—up to annual limits—is deposited on a pre-tax basis, and that money can sit there and accumulate interest or other investment growth tax free; the money then gets taxed as income as it is withdrawn in retirement.  What the President wants to do is go ahead and tax—read: take—that money now.

It’s an irresistible temptation.  U.S. savers have accumulated some $10 trillion in these retirement accounts based on the government’s promise that they could deposit it and let it grow tax free, and then it would be taxed down the road as ordinary income when they withdrew it in retirement.  But like a 3-year-old on Christmas Eve, Obama simply can’t wait until Christmas morning to open the presents under the tree.  The problem is that isn’t the government’s money, and it isn’t money Santa Clause has brought Obama or even to you.   It’s your money, earned through your labor and investment of time, skill, and expertise.  And Obama wants it.

But Rusty, I don’t have $3 million in my 401(K), and I’m never going to have $3 million in my 401(K), so why should I care?

Well, if you don’t and aren’t, I (depending on your age and lifestyle goals) submit you may want to re-think your retirement plan given that the monetization of our debt through the printing of fiat money is in fact already taxing your savings by devaluing it, but that’s another article for another time.  But regardless of whether you do or don’t (or will or won’t) have $3 million in retirement, you should care very much about the President’s proposal.

And it should scare the crap out of you.  

You see, that $3 million figure isn’t pulled completely from thin air.  It’s actually the amount you would need—under current economic conditions—to purchase an annuity paying you $205,000 per year.  Why that number?

Because that’s the amount the Obama administration, in its infinite wisdom, has decided is a reasonable amount for you to live comfortably in retirement.  In other words, they want you to work and save your whole life, and then in the end they will tell you how much of your own money you should have to live on and the rest of it is subject to the government taking it.

Rusty, that’s what any tax is.

Quite so.  But here we’re not talking about the government taxing your current income; we’re talking about it taking from you a substantial chunk of your money you’ve spent a lifetime saving.  Time you can never, ever replace.  Moreover, it’s taking from you out of accounts the very same government set up the tax breaks to encourage you to accumulate savings in the first place.  At a time when progressives are arguing that Americans already don’t save enough such that we need a second Social Security system, why would you start altering the tax advantages to discourage savings?!? 

What incentive do you have to keep working once you’ve saved $ 2,999,999, if the government can take some or even all of every dollar you save thereafter?  Why would a business owner stay in business—and keep employing his employees?

And it’s naïve to think that because you don’t expect ever to reach the $3 million threshold that you’re immune to the taking.  Once we’re in a universe where government gets to decide how much of your savings you actually get to have based on what government determines is a reasonable retirement income for you, then all bets are off.  Today that’s $205,000.  Tomorrow it might be pegged to the median U.S. income (currently about $50,000).  Next week it might be the median income tied to average life expectancy at retirement.  For a male at 65, today that’s about 13 years; the present value of a $50,000 annuity for 13 years is about $612,000, and anything in your 401(K) above that would be subject to the government taking it.  Furthermore, once they can tax your 401(K) or IRA, it’s only a small additional step for them to tax your regular savings, your checking account balance, or the value of any other investments you might have.

Still feel safe?

Keep this in mind as the Leftists are also looking to take your guns.  The people in Cyprus were already effectively disarmed before the government came to take their money.

I’m just saying.

Now, if Obama thinks his judgment that $205,000 is a reasonable income for you, let’s see him put his money where his mouth is.  I suggest we see legislation that reduces the Presidential salary to $205,000, provides ex-Presidents with a $205,000 annual lifetime stipend, and requires them to surrender all other assets to the U.S. Treasury.

I’ll bet you a million dollars this President would never sign such a bill.  And if he did, he’d never comply with it.  Because it’s never about what’s reasonable; it’s about taking as much from you as possible to buy enough votes to keep him and his ilk living like kings on your nickel.

 

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Farewell, Iron Lady

“Girls, come on.  Leave the saving of the world to the men?  I don’t think so.”

            —Holly Hunter as Elastigirl in The Incredibles

 

With yesterday’s passing of former Prime Minister Margaret Thatcher, the world has lost one of the truly great figures of modern history.  Mrs. Thatcher was a tremendous political partner with President Reagan in battling the Soviets and global communism.  But she also faced down tremendous difficulties at home in Britain, salvaging a flagging world power drowning in its own self-imposed socialism.  And she was able to do that by staying true to a set of intellectual and philosophical principles, rather than reading polls and blowing with the political wind.  She had guts, charisma, and integrity.  And she will be missed.

I tracked down an address she gave 10 October 1975 to the Conservative Party Conference, and you’ll see she could just as easily be talking to us in the U.S. today.  I’ve edited it for space reasons, but I’ll otherwise let the then-Prime Minister-to-be speak for herself:

Some . . . suggested that I criticized Britain when I was overseas. They are wrong.  It wasn’t Britain I was criticizing.  It was Socialism.  And I will go on criticizing Socialism, and opposing Socialism because it is bad for Britain—and Britain and Socialism are not the same thing.   As long as I have health and strength, they never will be.

But whatever could I say about Britain that is half as damaging as what this Labour Government have done to our country?

Let’s look at the record.

It is the Labour Government that have caused prices to rise at a record rate of 26 per cent a year.  They told us that the Social Contract would solve everything.  But now everyone can see that the so-called contract was a fraud—a fraud for which the people of this country have had to pay a very high price.

It is the Labour Government whose policies are forcing unemployment higher than it need have been—thousands more men and women lose their jobs every day.  There are going to be men and women many of them youngsters straight out of school—who will be without a job this winter because Socialist Ministers spent last year attacking us, instead of attacking inflation.

And it’s the Labour Government that have brought the level of production below that of the three-day week in 1974.  We’ve really got a three-day week now—only it takes five days to do it.

It’s the Labour Government that have brought us record peace-time taxation.  They’ve got the usual Socialist disease: they’ve run out of other people’s money.  And it’s the Labour Government that have pushed public spending to record levels.  And how’ve they done it?  By borrowing, and borrowing, and borrowing.  Never in the field of human credit has so much been owed.

But serious as the economic challenge is, the political and moral challenge is just as grave, perhaps more so.  Economic problems never start with economics. They have deeper roots—in human nature and in politics.  They don’t finish at economics either.

Labour’s failure to cope, to look at the nation’s problems from the point of view of the whole nation, not just one section of it, has led to loss of confidence and a sense of helplessness.  With it goes a feeling that Parliament, which ought to be in charge, is not in charge—that the actions and the decisions are taken elsewhere.  And it goes deeper than that. There are voices that seem anxious not to overcome our economic difficulties, but to exploit them, to destroy the free enterprise society and put a Marxist system in its place.

*  *  *

Our capitalist system produces a far higher standard of prosperity and happiness because it believes in incentive and opportunity, and because it is founded on human dignity and freedom.   Even the Russians have to go to a capitalist country, America to buy enough wheat to feed their people.  And that after more than 50 years of a State controlled economy.  Yet they boast incessantly while we, who have so much more to boast about, forever criticize and decry. 

Isn’t it time we spoke up for our way of life?  After all, no Western nation has to build a wall round itself to keep its people in.  So let us have no truck with those who say the free enterprise system has failed.  What we face today is not a crisis of capitalism, but of Socialism. No country can flourish if its economic and social life is dominated by nationalization and state control.

The cause of our shortcomings does not therefore lie in private enterprise.  Our problem is not that we have too little socialism. It is that we have too much.  If only the Labour Party in this country would act like Social Democrats in West Germany.  If only they would stop trying to prove their Socialist virility by relentlessly nationalizing one industry after another.

Of course, a halt to further State control will not on its own restore our belief in ourselves, because something else is happening to this country. We are witnessing a deliberate attack on our values, a deliberate attack on those who wish to promote merit and excellence, a deliberate attack on our heritage and great past. And there are those who gnaw away at our national self-respect, rewriting British history as centuries of unrelieved gloom, oppression and failure. As days of hopelessness—not Days of Hope.

*  *  *

A man’s right to work as he will to spend what he earns to own property to have the State as servant and not as master these are the British inheritance.  They are the essence of a free economy.  And on that freedom all our other freedoms depend.  But we want a free economy, not only because it guarantees our liberties, but also because it is the best way of creating wealth and prosperity for the whole country.  It is this prosperity alone which can give us the resources for better services for the community, better services for those in need.

By their attack on private enterprise, this Labour Government have made certain that there will be next to nothing available for improvements in our social services over the next few years.  We must get private enterprise back on the road to recovery, not merely to give people more of their own money to spend as they choose, but to have more money to help the old and the sick and the handicapped.

The way to recovery is through profits.  Good profits today, leading to high investment, well-paid jobs and a better standard of living tomorrow.  No profits mean no investment, and a dying industry geared to yesterday’s world . . . The trouble here is that for years the Labour Party have made people feel that profits are guilty-unless proved innocent . . . Governments must learn to leave these companies with enough of their own profits to produce the goods and jobs for tomorrow.  If the Socialists won’t or can’t there will be no profit making industry left to support the losses caused by fresh bouts of nationalization.

*  *  *

Yet the Government could not have destroyed the confidence of the industry more effectively if they had tried deliberately to do so, with their formula of empty promises and penal taxation.   So today what is the picture? Depressed profits, low investment, no incentive, and overshadowing everything government spending, spending far beyond the taxpayers means . . . One of the reasons why this Labour Government has incurred more unemployment than any Conservative Government since the War is because they have concentrated too much on distributing what we have, and too little on seeing that we have more.

We Conservatives hate unemployment.  We hate the idea of men and women not being able to use their abilities. We deplore the waste of national resources, and the deep affront to peoples’ dignity from being out of work through no fault of their own.

*  *  *

Some Socialists seem to believe that people should be numbers in a State computer.  We believe they should be individuals.

We are all unequal.  No one, thank heavens, is like anyone else, however much the Socialists may pretend otherwise.  We believe that everyone has the right to be unequal but to us every human being is equally important . . . The spirit of envy can destroy.  It can never build. 

Everyone must be allowed to develop the abilities he knows he has within him, and she knows she has within her, in the way they choose.  Freedom to choose is something we take for granted—until it is in danger of being taken away.  Socialist governments set out perpetually to restrict the area of choice, Conservative governments to increase it.  We believe that you become a responsible citizen by making decisions yourself, not by having them made for you. 

*  *  *

We Conservatives do not accept that because some people have no choice, no one should have it.  Every family should have the right to spend their money, after tax, as they wish, not as the Government dictates.  Let us extend choice, the will to choose and the chance to choose.

*  *  *

We are coming, I think, to yet another turning point in our long history.  We can go on as we have been going and continue down.  Or we can stop—and with a decisive act of will we can say “Enough”.  Let us, all of us, here today and others, far beyond this hall who believe in our cause make that act of will.  Let us proclaim our faith in a new and better future for our Party and our people.  Let us resolve to heal the wounds of a divided nation.  And let that act of healing be the prelude to a lasting victory. 

Godspeed, Prime Minister.  Tell President Reagan we miss him, too.

When Robin Hood Became King

“I got into broadcasting because I like to give.  Sometimes I found myself hurting from giving too much, and I’d say, ‘Stop it.’  I’m always gonna cherish this [humanitarian award, which he subsequently leaves in a taxi], and all of you.”

            —Bill Murray as Frank X. Cross in Scrooged

 

Ah, our Benevolent Leader is at it again, channeling his inner Bill Clinton to assure us that he feels our pain.  In an almost impossibly transparent and shallow gesture, the President announced last week that in order to show solidarity with federal workers being adversely impacted by the effects of budget sequestration, he would be returning 5% of his Presidential salary to the Treasury.

You know, because we’re all in this together.

Superficially this almost appears to be the right thing to do, and no doubt the sycophants in the media will fall all over themselves to praise this latest move by Obama The Great to try to unite the country behind “common sense” ideas and for him to be one with his subjects—er, citizens.  And a good many will believe it.  But a closer look reveals this to once again be nothing more than a crass, juvenile show of form over anything resembling substance.

Many federal workers are facing furloughs—periods of forced unpaid leave.  For some, these furloughs may stretch upwards of four weeks, and amount to a 20% pay cut.  So Obama, in all his empathy, volunteers to take a 5% cut in solidarity with their 20%.

Really?

Even workers losing only 10-12 days to furlough are taking about a 5% cut.  So what the President is doing with his little voluntary charade is essentially joining the least impacted of the furloughed federal workers.  In other words, he’s doing as little as he can possibly get away with to still claim the political brownie points.  But it’s really worse than that.

Recall that the President makes a salary of $400,000 per year, plus spending allowance, travel allowance, free lodging in a not-too-shabby joint, free security, free food, etc.  He’s doing more than OK; he’ll be the first to tell you that he’s in that lofty 1% he so loves to demonize, and he’s in exponentially better shape than the very best off of the federal workers being furloughed.  So his salary give-back is doing the least, but doing it from a position of having the most.

Take it a step further.  That $400,000—which is all he’s said he’d be giving back 5% of; he’s not even counting the perks—isn’t his whole income.  In fact, it’s just a little over half of his income.  Remember, he still draws royalties from his books about himself.  He and Michelle reported nearly $800,000 in income in 2011 (the last year for which information is available).  He’s not giving up one thin dime of that.  So that “5%” giveback is really only about 2.5% of his actual revenues.

The generosity and self-sacrifice almost moves you to tears, doesn’t it?

This is the same man who for years has lectured us at every opportunity about the need for the rich to “pay their fair share,” meaning contribute disproportionately more to the collective good than their less-well-off neighbors.  As a refresher:

July 25, 2011:

“Are we a nation that asks only the middle class and the poor to bear the burden after they’ve seen their jobs disappear and their incomes decline over a decade? . . . Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks that we don’t need and weren’t even asking for.”

April 11, 2012: 

“One in four millionaires pays a lower tax rate than millions of hardworking middle-class households . . . It’s just plain wrong that middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires.” 

January 2, 2013:

“Obviously, there is still more to do when it comes to reducing our debt.  And I’m willing to do more, as long as we do it in a balanced way that doesn’t put all the burden on seniors or students or middle class families, but also asks the wealthiest Americans to contribute and pay their fair share.” 

Time and again he has pounded this populist bullcrap about those with more—who already pay the vast, vast, vast majority of taxes—needing to do more still before they’ve reached their somehow-never-quite-defined “fair share.”  This, of course, is straight out of the Communist credo from each according to his ability, but don’t you dare call him a Communist or you’ll expose your inner Jim Crow.  And Obama has repeatedly given lip service to the notion that he would gladly have this same standard apply to himself.

But isn’t it interesting what happens when the rubber actually meets the road.  The average U.S. household has a total tax liability of about 6.5%—roughly the same percentage as the average pay cut for furloughed federal workers—and Obama’s idea of the wealthy’s “fair share” (at least until he needs even more of their money) is something closer to 40%.  Following that same logic, for him to be showing true solidarity with furloughed federal workers, under his own concept of “fair share” Obama should be giving back at a minimum 40% of his Presidential salary (never mind his total income and the value of all the perks of the office).  Surely he at least should be giving back a percentage equal to the largest pay cut among furloughed workers.  If he were truly trying to share in the sacrifice and contribute his fair share, he should be leading by example and as one of those with the most he should be doing the most, right? 

Nope.

As always with the liberal elites, the need to contribute a “fair share” ends where their own wallets begin; they’re all for more and more sacrifice as long as it’s being done with someone else’s money.  Obama and his surrogates shine a bright light on his “voluntary contribution” in an effort to claim the political high ground, but in reality he’s putting as little skin in the game as possible in order to support that claim.  Meanwhile he plays his golf, and flits from one DNC fundraiser to another in between his lavish vacations.  It’s a sham; a sophomoric veneer intended to fool the gullible into believing that he’s in it for them, that he’s sharing in the sacrifice.

And nobody—but nobody—is calling him on it.

It must be good to be the king. 

High On The Hog

Vacation, all I ever wanted

Vacation, had to get away

Vacation, meant to be spent alone

            —The Go-Go’s, Vacation

Let me set this scene for you.

We are over $16 trillion in debt (over $90 trillion if you count unfunded liabilities such as future Social Security commitments), and hemorrhaging money at a rate literally never before seen in human history.

The U.S. Census Bureau now tells us that more than 50 million Americans are below the poverty line.  That’s a level that hasn’t been seen since LBJ launched the “war on poverty”—one wonders at what point we say that war’s been a failure.  We continue to have official unemployment at nearly 8%, with real unemployment above 14%; 12 million Americans are out of work, and the labor force participation rate continued to drop as another 100,000 people left the work force. 

As Princess Leia once quipped: Wow, this is some rescue.

It is against this backdrop that I want you to picture the Life of Riley going on down at Obama Manor, because I think it illustrates how little this President cares about you and America and how much he cares about himself.  By now you’re familiar with the First Family’s annual summer soirees with the rich and famous out on Martha’s Vineyard.  You’re also already aware that the Obama family this past New Year’s once again took their regular winter trip to Hawaii.  I don’t begrudge the President a vacation, but do he and his wife really need to take his and her matching private 747s to do it?

Having just returned in January from what I’m sure was an exhausting stay in the Aloha State, the Obamas needed separate vacations in February to recover.  The President took Air Force One over Presidents’ Day weekend to the exclusive Floridian Club in Palm City, Florida, where he flew in celebrity golf instructor Butch Harmon to the tune of $1000 per hour, and played golf with Tiger Woods and Houston Astros owner (and Obama mega-donor) Jim Crane.  Meanwhile, Michelle and the girls took a separate taxpayer-funded charter to go skiing in Aspen (the identical trip last year cost taxpayers at least $89,000, according to records obtained by JudicialWatch).

Fast-forward a whole month, and it’s time for yet another vacation.  This time it was the girls—with their Secret Service entourage in tow, all on the taxpayer dime—heading off for a Spring Break fling in the Bahamas, followed by yet another ski trip, this time to Sun Valley, Idaho.  That’s four (technically five, but since they were together I’ll count Hawaii as one) vacations for the First Family in three months.  All at over-the-top high-end resorts.  All with security details and their associated public expense along for the ride.  And never mind that they essentially privatize any venue at which they play—if the President plays golf or the First Daughters go skiing, that venue basically has to be closed to the public.

Not to be left out of the boondoggle, Genius Joe has himself taken three vacations already this year, traveling via Air Force Two to the Virgin Islands in January, to Snowmass, Colorado for skiing over Presidents’ Day weekend in February—meaning that that weekend there were actually two separate taxpayer-funded executive branch ski trips to two separate ski resorts in Colorado, in addition to the President’s golf excursion—and then to Kiawah Island off the coast of South Carolina.  Add into that Biden’s separate February “official” trip to Europe, where his limousines and lodging alone cost taxpayers over $1.3 million, and that’s eight executive family trips this year alone.

Hawaii.

The Virgin Islands.

Aspen.

Snowmass.

The Floridian.

London and Paris.

Kiawah Island.

The Bahamas and Sun Valley.

I will confess I’ve been to Hawaii, Aspen/Snowmass (one trip combined) and London/Paris (also one trip combined, and part of that was on business), but it took me seventeen years to do it, and I’ve only been to each of them once.  This is the travel itinerary for the executive families just over the last three months, and they’re doing it almost entirely at your expense . These are your self-proclaimed champions of the middle class. 

Look, I get it that at least as far as the President is concerned he’s theoretically never really on vacation.  But that same notion doesn’t apply to the Vice President or the First Family (and yes, if they’re going to galavant around the world on my nickel, Michelle and the girls are fair game).  And it’s beside the point, which isn’t the President taking some time off.  The point is the breathtaking level of blindness to the disconnect between the scale and splendor of this adminstration’s lifestyle vis-à-vis the fiscal and economic conditions for this country and the vast majority of us in it.  Other Presidents have taken vacations; but Reagan, Carter, and both Bushes took those vacations by going to their respective homes (or, in Carter’s case, on modest fishing trips in his native Georgia).  They didn’t vacation once a month, and they didn’t do it on taxpayer expense at resorts and venues even Robin Leach couldn’t get into.

Now I learn that while “sequestration” has the White House closed to tour buses of schoolchildren, the Obamas are continuing to host private exclusive concerts by the biggest names in music.  The latest shindig will include the likes of Justin Timberlake, Queen Latifah, Al Green, and Cyndi Lauper—not exactly Willie and the Po’ Boys down on the corner.  But although Mrs. Obama swears that the White House is your house, too, you think the public can get in to see this event?

No chance in hell.

The President makes $400,000 per year—eight times the U.S. median income.  The Vice President makes $231,900.  In addition, they have rent-free lodging in the most exclusive residences in the country, 24 hour armed security, free four-star food, free transportation, etc.  Now we have them (and their families) taking lavish vacation upon lavish vacation, hosting private concerts with top-line acts, and generally living, well, like kings.  All at a time when we have record numbers on food stamps, 1960s level poverty numbers, and continuing stagnant unemployment.

I can’t figure out why there isn’t more outrage about this, particularly among the black community, which continues to be hardest hit during the continuing recession–er, “recovery.”  For blacks as a subgroup the situation is much worse than the nation as a whole, with the official unemployment rate at 13.8%, and some 2.3 million black Americans jobless.  How many of you in the black community have ever been to Martha’s Vineyard even once?  Hawaii?  How many of you have taken your own private 747 to do it?  How many of you have taken three vacations in a year, much less in a quarter?

Didn’t think so.

You think this President gives a crap about you or anyone else, other than as a means to his personal ends?

Think again.