04
Jun
15

Hillary Campaign Poster Ideas

Hillary Clinton Logo Parody 1Hillary Clinton Logo Parody 2Hillary Clinton Logo Parody 3Hillary Clinton Logo Parody 4 Hillary Clinton Logo Parody 5Hillary Clinton Logo Parody 6Hillary Clinton Logo Parody 7

30
Nov
11

What the Hell is Gracie Law Doing Here?

Quotes from Big Trouble in Little China can work with anything!

In this case, I’m talking about Newt Gingrich as the conservative frontrunner in the GOP race.  I don’t think anyone really saw this coming.

I’m not too perturbed about Newt.  I was a supporter of Contract with America, and he knows what makes a conservative.  But he’s prone to getting distracted, and he’s had some ethics issues, so he’s not the best guy to nominate.  But will Obama fare well against Newt in the debates?  No.  Newt will destroy Obama.  Handily.

But that leaves the question:  who’s best?

Santorum?  Unfortunately for him, he lost in Pennsylvania, which is a swing state.  And it seems Republicans remember that.

Paul?  Certainly he’s called the Fed problems.  And his fiscal policies are solid.  But his isolationism is dangerous.

Huntsman?  I can’t get him.  He seems very moderate, and he has executive experience as Governor of Utah.  And he’s been the ambassador to China.  I don’t know.

Perry?  On record alone, he’s solid.  But he’s a gaffe machine.  (And so was Bush, btw.  Must be a Texas thing.)  His proposals have been solid.  And the team around him is excellent.  I don’t know if he’d do well in a debate with Obama, or royally screw the pooch.

And that brings me to Herman Cain.  I really don’t know what’s up, but with the sexual harassment claims, and now the woman claiming the 13 year affair and the non-denial denial from Cain’s camp, he’s falling apart.  At this point, he’s shedding support because he’s been inconsistent on the scandal.  At least with Newt, we know his scandals, and he’s freely admitted them.  But Cain crumbled with the clumsy coverup.  In addition, he performed poorly in the Foreign Policy Debates.

(Oh, I didn’t include Bachmann because she faded ages ago, mainly because she hasn’t put forth any plans of substance.)

Now, the big question is what happens to the 10-15% of Cain voters when Cain inevitably pulls out.  Where will they go?  Who has a plan that is similar to Cain’s?  Cain’s big push was 9-9-9, and that’s where he found his support.  But the only other people out there that’s proposed something similar are Newt and Perry.  Since the 10-15% of Cain voters haven’t peeled of to Newt, it’s safe to say they’re going to run somewhere else– and that’s most likely to Perry.

To solidify this, and rebound in the campaign, Perry’s going to have to quickly secure Cain’s support.  If Perry’s going to have a chance to pull off the nomination, he’s got to secure the Cain backers, and that means securing Cain.

 

15
Nov
11

The China Syndrome

The China Syndrome– The name given to a nuclear meltdown that reached critical temperature and mass and burns through the Earth to China.  In reality, it burns until it his the water table, at which time it explodes in rapid steam generation.

We’re facing a similar syndrome.  In this case, it’s the Chinese Yuan melting down.  The alarms are going off. But the Chinese Economic Reactor is producing so much power that nobody wants to be the one to SCRAM the reactor.

A recent article in the Wall Street Journal attempts to shed light on the issue of underlying problems with the economies of Europe, China and the US.  It’s well worth the read, and I’d like to expand on what they have to say. (And I’m glad this is not behind a paywall, because getting people to read articles like this explains just how dire the world economy is!)

1)  Europe.

In Europe, the tough decisions have been put off because the principal players don’t agree on how or why the trouble began. Germany and the other better-off countries blame the profligacy of Greece, Portugal and Italy and fear that an early bailout would relieve pressure on them to mend their ways. For their part, the debtor nations believe that the entire euro zone is out of balance and that more prosperous countries like Germany should export less and consume more to set things right.

Other Europeans say that a shared currency cannot survive indefinitely when monetary policy is centrally managed but each government decides how much to tax and spend. Still others warn that access to market capital requires a form of collective insurance, preferably in the form of a euro bond. Not surprisingly, Germany resists this solution because it implies a gradual transfer of wealth from the core economies to the periphery, a “transfer union” from rich to poorer states.

Europe is in serious trouble.  The authors have the beginning of their troubles correct, but they recently were bailed out by China.  China is floating their own market on currency manipulation.  If Europe slips into recession, and it’s likely, the Chinese market will suffer from the decreased purchasing power of Europe.  Europe’s lack of purchasing power will devalue the Chinese Yuan, which means….

2)  China’s currency manipulation’s chickens will come home to roost.

To ensure long-term economic expansion (and political stability), Beijing must figure out a way to encourage Chinese consumers to buy more of the products that local manufacturers make. This will demand a massive transfer of wealth from the state and China’s state-owned companies to Chinese households.

But Beijing is moving in the opposite direction. The leadership responded to Western market turmoil not by boosting consumption but by increasing state and private spending on fixed investment, which now accounts for nearly half of China’s growth. The result has been an explosion in residential and commercial real estate, more state spending on infrastructure and more cheap loans from state-owned banks to state-owned enterprises.

The strategy of currency manipulation has tied to the yuan to the dollar and euro.  As the euro’s star rose, so did the yuan.  Unfortunately, the primary reason why the Chinese economy exploded was it had focused on imports and not on a sustainable Chinese economy.  When Europe crashes, and when the Dollar inevitably crashes, the yuan will “crash” as well.  And by crash, the Chinese will no longer be able to keep the currency artificially low.  As the yuan gains strength, the export market will tank, and in doing so, they will not be able to sustain the 70% of their manufacturing and exporting economy.  As a result, almost all consumer goods are going to cost more coming out of China.  Which leads us to…

3)  The US.  First, the bad news.  When the Yuan dies thanks to Europe finally suffering the effects of the 2008 recession, the Dollar is going to sink.  It no longer has the Yuan to artificially inflate it, so the Dollar will fall.  Of course, this will be met by the Media with wailing and gnashing of teeth.  The purchasing power of the US will drop– the Dollar will be worth less.  The good news?  As imports decline, exports will increase.  China will have to pay the piper of Market Forces when their manufacturing sector crumbles.  It will actually be cheaper for the US to start manufacturing its own goods again!  That’s right, the Made in the USA label will actually be making a comeback.  Manufacturing jobs will increase, unemployment will decrease, the USA will regain its footing as a world economic power.

Now, should the Republicans control the House, Senate and White House, an enormous opportunity will present itself.  The GDP will recover, and, if Paul Ryan gets his way (and he should), the US should start paying off its debt.

That’s a huge problem for China.  With a weaker dollar and stronger Yuan, the US Bonds they will have purchased will be worth less than they purchased them for because the Yuan will be stronger.  The Chinese will take another hit– possibly the hit that will send them into an economic depression.

So, there’s the real flaw with paying off our bills– we could do great harm to Europe and China.  As odd as it sounds, maintaining a ridiculous $15 Trillion Dollar Debt may be the only way the US keeps China and Europe from years of depression and subsequent political upheaval.

The US is poised to see a booming economy.  The manufacturing and house-building bubbles have largely run their course (and it would have taken a shorted time had government not interfered).  If Obamacare, regulation, and horrible energy policy is changed, we can see a rapid shift to 4% unemployment by 2014.

But I’m just a chemist.  I could be wrong.  (And if Romney or Obama are President in 2013, we’re going to see a much slower recovery.)

10
Nov
11

The Primary Problem

Perry’s choke illustrates the error with marathon debate format– it focuses on one aspect (under pressure public speaking) while conveying answers that may mean something but have no content.  They can’t.  Explain health care in 30 seconds– it can’t be done!

But it’s what is expected.

The winner of last night’s debate was Newt Gingrich.  Herman Cain did well.  But neither candidate has $17 million in a Presidential Campaign fund.  And Perry did that in a shorter time than Newt, Cain, Bachmann, Huntsman.  It’s impressive he can garner such monetary support in such a short time.

Sure, we hate his debate performances.  And so long as he doesn’t get excited in a debate with Obama, he’ll probably do OK.  Obama’s weak on jobs, economy, foreign policy, golf– they only thing he’s good at is giving speeches, and a debate isn’t a speech.  Obama’s debates against McCain were not memorable, and they didn’t win his election.  Obama’s debate against Hillary didn’t secure his nomination.  Obama conned the masses into believing his hype, and it was something Hillary couldn’t compete with.  Hillary can’t deliver a stemwinding speech.  Chris Matthews isn’t going to get tingles from a Hillary stump.  But Obama could, and he built on that momentum.  Now that we’ve seen 3 years of Obama, we know his speeches are as worthless as his approaches to the green.  Perry, so long as he sticks to economic substance, he’ll stand up well against Obama.

But as Republicans we can’t help but look at a stage of 7 candidates and Mitt Romney and say, “Man, can we have someone other than Mitt Romney?”  So we’ve gone from Bachmann to Perry to Cain, and now Gingrich is rising in the polls.

But you can’t argue with Perry’s fundraising.  You can’t argue with his Texas record.  You can’t argue with his earthiness.  But we wonder if he truly has any transformative ideas, and if he does, can he communicate them?

And we wince.  And we say “Is this the best we can do?”  As a party, we want the best candidate.  And so far, on 30% of the party seems set on Romney, which leaves the other 70% grimacing.  Do we want gaffe-prone Perry?  Poorly-organized Cain?  Sketchy-past Gingrich?  Donkey-in-disguise Huntsman?  Isolationist Ron Paul?  Michelle “We’re Not Sure She’s Knows What She’s Talking About” Bachmann?

Someone’s got to be better than Romney, but nobody has the total package.  And Perry’s horrible gaffe was just that, horrible.  But who else can fundraise like Perry?  Is the one-time gaffe worse than Gingrich’s past marriages?  Is Perry’s gaffe worse than Ron Paul’s destructive isolationism?  Is Perry’s athlete’s tongue more damaging than Cain’s fumbling of sexual harassment charges?

Evidently it is, to some pundits.

But Perry has $17 million in the bank.  That buys a lot of forgiveness.  We can’t count him out.

09
Nov
11

Perry’s Big Choke

Yeah.  You’ve seen it.  Here’s the link.  Much like the Theisman MNF leg-breaking incident where ABC showed it over and over in slow motion, the Perry brain-fart is going to be show repeatedly on late-night talk shows for weeks to come.  Be sure Letterman is going to love this.  The question, can Perry recover?

I’m not so sure.  He’s got tons of money, but this is a defining moment.

Perry’s entry was exciting.  We had an executive from Texas, a state with a GREAT economic record, come in to challenge Mitt “Romneycare” Romney.  We hoped the Texas straight-shooter would walk in, swagger Romney to death in the debates, and walk off with the nomination.  But after 3 debates, it was clear that Perry sucked at debates.

Tonight was nothing new.  In fact, outside of his Big Choke, he did very well.  He was cogent, clear, and made great points.  But these debates favor the sound-bite.  And Perry’s biggest sound-bite will be his biggest failure.  The only thing that can save him is the fall of Joe Paterno at Penn State, depending upon the news outlet.

Perry’s failure here is a detraction from everything he has going for him.  Ultimately, he’s great on paper.  But he doesn’t exude the confidence to be the GOP Nominee.  If he can’t secure the base, he can’t secure the nomination, regardless of the money in his war chest.  And tonight, he showed just how badly he performs when he needs to perform.

Would he perform better in an intimate 1-hour setting with one other candidate, ala Newt & Cain?  Maybe.  But he hasn’t.

The good news is Gingrich is rising.  People call him a RINO.  But there’s nobody better on the issues.  If I’m willing to forgive Newt for sitting on a bench with Pelosi, he’s come a long way.

More on HotAir.

18
Oct
11

The Best Minds on the Stage

Tonight’s debate was very similar to the debates we’ve seen so far.  People attack Romney, but the attacks slip off.  We did see Mitt lose his cool after being interrupted by Santorum and Perry.  But for the most part, there was little new.  Here’s my reaction.

Romney:  Solid, although showed some temper.  I can’t say I blame the guy.  And he was playing in front of a “home” audience who cheered him and booed his detractors.  Still, lots of fun things to say, but no substance.  His job was to not make any mistakes, and he clearly accomplished that goal.

Perry:  Remove the awkward illegal immigrant attack, and you have a much better performance from Perry.  He had less of the stammering (although some clearly awkward pauses).  When talking about jobs and immigration, he was commanding.  He probably saved his campaign tonight.

Cain:  Apples and oranges.  A clearly incompetent attack from Bachmann, who launched into a VAT argument that wasn’t a VAT argument (D’OH!) when she really meant to say national sales tax (ain’t you a tax lawyer, lady?).  That made her attack confusing and ultimately it fell flat, and it helped Cain.  Ultimately Cain had to throw up his hands and say “read the plan”.  Romney’s question on the two sales taxes, state and federal, was not well-addressed by Cain.  But Herman certainly had a few winning comments in the debate.

Bachmann:  She clearly fumbled the VAT/Sales Tax attack on Cain.  Plus  she’s gone from saying nobody should be taxed to everybody should be taxes.  Since the Gardisil overreach Bachmann has flown off the rails.  Tonight’s performance should force her to drop from the campaign.

Santorum:  Clearly a stalking horse.  The good news is he got more airtime because Huntsmann wasn’t there (hey, a guy has to spray tan!).  The bad news is he got more airtime to launch attacks on basically everyone.  I’d suggest to the Perry or Romney campaign to reach out to Santorum, promise him a cabinet position and assume his campaign debt, and keep him in, then have him launch proxy attacks on Romney/Perry, or a fake proxy on said candidate so the candidate can come out looking good.  If he doesn’t want to do that, then he needs to drop out.  Nobody’s taking him seriously.

Paul:  Good on domestic, bad on foreign policy.  Same old Ron Paul!

Gingrich:  I want to say this– the stage tonight was full of people with solid conservative credentials, but only one shines above the field, and that’s Newt.  If he didn’t have so much baggage, he’d be the frontrunner.  But again he talks about “working together” with Democrats, and he alluded to it tonight.  There will be no working together with Democrats to dismantle Obamacare.  That’s certain.  When the Democrats controlled the House & Senate & White House in 2008-2010, the Republicans got all stick and no carrot.  Speaker Boehner has done a great job using that stick on the White House and Senate to get things as done as he can get done.  But Newt has to come out guns blazing and declare total animosity towards compromise with the Democrats on Obamacare.  And the EPA.

Newt’s brilliant.  There’s no doubt about it. He’s a professor and it shows.  Romney’s smart, but he’s not Newt.  Santorum is smart, and so are Bachmann and Perry.  Paul’s a different kind of smart.

I can’t believe I’m saying this, but Newt’s really making me think about taking him seriously.  He’s got tremendous downside potential, but he’s got tremendous upside as well.  Perry’s got money, but no mojo to stop Romney.

In fact, if Perry and Gingrich got together right now and formed a ticket, Romney would be dead in the water and Cain couldn’t compete.

Tomorrow:  An interview profile of Rick Perry.

17
Oct
11

Application for President : Mitt Romney

(This is the first of profiles of the current candidates and their performance.  I’m reviewing this as if each of the candidates submitted information to me and then did an on-site interview, and my reactions to their information.  They are considered to be applying as a Republican candidate for office, not a conservative candidate for office.)

Candidate Name:  Mitt Romney

Cover Letter:  Bio from Website.

Comments:  He seems like a good family man and has been actively involved in industry.  Strangely enough, there’s nothing in the post that says why Mitt wants to be President.

Education History:  BS in English, Brigham Young University

JD (Law Degree), Harvard

MBA, Harvard

Comments:  Very impressive, especially the joint JD/MBA.  He has had high grades.  But do we want another lawyer as President?

Work History:  Management Consultant, venture capital / investment, CEO of Bain Capital, CEO Salt Lake City Winter Olympic Games, Governor of Massachusetts, ran for Senate, ran for President in 2008

Comments:  Certainly has a lot of leadership experience and understands business.

Government Experience:  Governor of Massachusetts.  Ran for Senate.  Enacted Romneycare.  Ran as a Pro-Choice Governor in Massachusetts.  Claimed a pro-life mantle when running for President in 2008.

Comments:  A “moderate” Republican.  Has claimed a more “conservative” mantle, but his record disputes that.  Has serious conflicts with the Tea Party thanks to his Romneycare policy.

Issues:  Whole plan is listed here and focuses on economic policy.  His jobs plan is to “restructure” the tax code by “broadening the tax base”.  He never really defines this particular term, but the tax base is going to be broad, baby!  He also plans on moving toward a territorial tax plan to bring extranational taxes back to the the US.  He plans on eliminating red tape by repealing Obama regulations.  He wants to ensure that regulations do not make a direct impact on the economy and will restrict any new regulations from making negative impacts on the economy.  How?  Not sure.  he will also allow new permits for drilling and expand the territory allowed for such drilling.  What territories?  Doesn’t say.  His labor policy will be to put more “conservative” people on the NRLB to ensure unions act “fairly”.  He plans to “work with Congress” on this (translation:  if Congress wants to do it, I’ll sign it.)

Comments:  It’s long.  And in fact, most of it isn’t what Romney is proposing, but what Obama has done wrong.  It’s an interesting read because the proposals inside are vague and the language is carefully crafted to come off as saying something important.  Every statement is capable of meaning something that can be deflected.  For example, Romney throws his support behind Paul Ryan’s Medicare Reform as “a good start”, and claims to want to do something similar but different.  What he wants to do that’s different?  I don’t know.  He doesn’t explain.  And that’s what Romney is good at– making sweeping declarative statements that have no substance.  Same goes for his jobs policy, energy policy, labor policy– everything is treated with a broad brush.  There is no “red meat”, per se.

The Interview:  Romney’s performance in the debates has been great.  He’s been confident, articulate, and has good comebacks for any attacks.  However, he’s not giving any specifics on his plans.  His 59-point plan on jobs is an organizational mess and Romney hasn’t explained anything about it at the debates because it would take too long.  But it hasn’t hurt his performances in the debates, and he’s still the frontrunner.

Comments:  Again, light on specifics.  Mitt looks great, sounds great, but is weak on giving an indication on what his plans are.  Mitt excels at talking while not saying anything.  He’s proud of Romneycare but opposes Obamacare even though people from Romneycare lent the Obama administration support on how to craft Obamacare.

Overall Application:  Mitt’s a force to be reckoned with.  But he’s short on conservative credentials.  Serious conflicts with Tea Party values.  Proven leader.  He’ll be a good candidate, but as for governance, it’s unsure just what he will push and if it will be a solid conservative Presidency or something more middling.  His track record suggests he will lean more towards centrist policies.  He’s talked a more “conservative” game in this run, but his plan lacks specifics.  Also, there’s nothing that suggests Romney will cut government spending or streamline government by eliminating departments.  He’ll suspend Obamacare, but what he’ll do with it is unclear.  Will he push for its dissolution?  Will he amend it?  Will he talk with Paul Ryan and get Medicare straightened out?  Who knows.  Nothing in his debate performances has addressed specifics in these plans.  I’d like to see more specifics, but Romney’s been running for 10 months now and we haven’t seen anything that the Tea Party can get behind.

13
Oct
11

Have the Debates Doomed Perry?

Well, it’s official.  Rick Perry’s a pretty awful debater.  Maybe.  I think he’s trying the “Texas Nice” approach and it’s coming off like he’s a buffoon.  Either that or he’s just not great at thinking on his feet.  But Perry should take comfort in the conclusion that he’s the only high-firepower candidate with a proven track record, and that says a lot.  His big advantage is that his competition is an eclectic mix of personalities, none of whom smack Tea Party Hero.

I think one reason people are giving up on Perry is that he hasn’t been the guy to land blows on Mitt.  Between the debate moderation and Mitt’s ability to talk for long periods without saying anything, and Perry using “Texas nice” to hit Romney with questions, really hasn’t had the desired impact from the audience.  His ads, however, are really cutting into Romney’s health care support, which is smart.  It’s Romney’s biggest weakness, and debate viewers want that red meat.

Mitt is the easiest to dismantle.  He’s been having his cake and eating it too with the Massachusetts Health Care plan.  Mitt says he’s quite proud of his plan, and he’d do it again if he was governor again.  But it looks as though the people in charge of the Massachusetts health care law had helped the Obama team and the Democrats with Obamacare.  Given the outrage Obamacare ignited in 2010, it’s no surprise Mitt’s coy on the issue.  But several debates have come and gone and none of the moderators have really challenged him on the centerpiece of his governorship.  Additionally, his 59-point Economic Plan is complicated, but it’s nothing we haven’t seen before.  In fact, he hit Perry on scaring senior citizens but he has plans to reform Social Security in his own plan.  Knowing Romney, that’s not unexpected.

Cain is the biggest enigma, but his weakness is his greatest strength.  His 9/9/9 plan has a huge flaw in its 9% National Sales Tax.  Cain’s also made several errors, such as stating Greenspan would be the best head of the Fed in the debate last night.  However, none of the errors have been monumental.  Cain has a real shot, and he’s certainly behaved like a seasoned candidate.

Ron Paul has actually made a pretty good game of it this election, but his isolationist foreign policy stances are enough to alienate most people.

Newt Gingrich is preforming well, but he brings with him a large amount of baggage, such as divorces, infidelity, and posing with Nancy Pelosi in an infamous pro-AGW spot.  It’s unfortunate because Newt’s forgotten more about American Government than all the knowledge the other candidates have of it.

Rick Santorum has never made much of splash.  He keeps talking about his experience, but unfortunately, he’s not had much experience beyond the Senate.  His policies have never gained much traction with people, and he doesn’t have much TEA party cred.  Why hasn’t Santorum taken Pawlenty’s lead and dropped out?

Huntsman.  The Orange RINO.  There’s still some people who believe that Obama will drop Biden and select Huntsman to generate a Bipartisan ticket.  That should tell you just how much Republicans believe in Huntsman.  But for someone with 1% of the vote, he gets a lot of Media attention.  Which is strange, because the other ex-governor, Gary Johnson, polls the same but doesn’t even get invited to debates.

Bachmann.  Michelle Bachmann certainly has a lot of TEA Party credibility, forming the TEA Party caucus in the House.  But she doesn’t have much in the way of accomplishments.  Also, her attacks on Perry on Gardisil turned into an anti-vaccine pogrom.  Perry’s entrance also sucked off a lot of her support, and she’s unlikely to get it back.

When you take all of these candidates in hand, Perry still looks good.  Right now, he needs to not collapse completely at the next debate and press the video campaign.  Most importantly, he needs a message.  He needs a plan that’s more than “Texas”.  His ad campaign has already launched some effective broadsides against Romney, but he needs to get Romney rattled in a debate that’s actually viewed by people (sorry, Bloomberg!).  And he really needs to ride the anti-Obamacare issue.

In essence, Perry has a good shot at winning this thing, and as Bachmann fades and more people get turned off by Romney, he’ll have the opportunity to do well.  But he needs to successfully confront and battle Cain to get some of his support back.  And an endorsement from Palin would go a long ways in the Primary.

UPDATE:  Ed Morrissey finds similar issues with the sales tax.

11
Oct
11

Plumbing the Votes for Obama

The Obama campaign wants someone to spend some of their precious time to design a campaign graphic they are going to use and raise millions of dollars with.  Oh, and that lucky person will not be paid for their hard work.  But of course, there’s ample opportunity for parody here.  So here we go, the Autopsy’s entry.  I call it “Plumbing the Votes”:

In case you can’t read the bottom, it says “Don’t let the Republicans Stop Us in Mid-Flush”.  Feel free to share with friends.  Just be sure to credit the Autopsy when you do.

30
Sep
11

Herman Cain’s 9/9/9 Plan and Why It’s a Bad Idea

Much has been made lately of Herman Cain’s 9/9/9 tax plan. I like the simplicity of the plan (9% national sales tax,  a 9% personal income tax, and a 9% capital gains tax). However, there are some serious problems with the plan as is, and there are better tax models out there that are just as simple, but do not involve a National Sales Tax (NST).

Cain’s plan, if I read his campaign website correctly, is to eventually do away with all the little taxes and regulations and shift everything over to a NST. In order to keep the government afloat, he would need a NST that runs to about 22-27%. Unfortunately, this kind of NST has a hidden consequence which could seriously affect all sectors of the economy.

Generally, when you purchase an final, refined good, you are paying for the raw materials that went into processing it. So lets use a hypothetical example and compare current tax law with Cain’s 9 / 9 / 9 plan.

Under current law: As a manufacturer, you go to purchase raw materials. Suppose your Widget needs a stack of lumber that costs $1000. Because of state sales tax, that lumber costs, on average, $1070. That cost is built into the end price of the Widget.

Now, you manufacture these widgets. To make up for the expense of the Widget, and to ensure you’re making money to pay for labor, transportation, inspection, regulation, etc. and profit, your final product costs $2000, and one of your customers will pay $2140 it. Your customer has to get the Widgets to market, and charges $3000, or $3210 with final state tax.

Under the Cain 9% plan: Now the stack of lumber comes with a 16% tax on it (state’s 7% plus 9% for Federal), which makes the lumber cost $1160 for raw materials, $2320 for the manufacturer, and $3480. Notice a few things here–

A) The profit margin for the manufacturer has decreased. In order to make up for this, his end product needs to be more expensive. So let’s call his end price to market is $2410 to make up, just in revenue lost from paying the extra tax on raw materials. Notice this now a 20.5% increase in price with built in taxation– not 16% as figured from the state + the Cain 9%).

B) The end distributor for customers now also has to make up for that increase in price, so let’s put that new term at $3750 for recouping what was lost in tax before, so the end price is now 25% higher. If this distributor is pushing items out to stores for end-sales, we’re looking at a 30% increase in prices from a 9% increase due to a NST.

It gets worse. If Cain intends to apply a NST for all Federal revenue, we’re looking at a NST which hits around 20% at the absolute bottom of the scale, which could double market prices for standard consumer goods!

Of course, if this replaces things like payroll tax, you’re looking at a reduction in costs to businesses there, but it’s not going to matter because the VAT is multiplied through the system with each additional step you take.

If you’re buying corn at $1 / 5 ears directly from Farmer Joe, then a 20% increase is only going to make it $1.20, not something huge. However, imagine sugar from Hawaii. Building in costs for transportation, fuel, manufacturing, etc., you’re looking at sugar price exploding. That would make cookies way too expensive.

Also, the NST has a disproportionate impact on the poor. If your milk costs $3.00 a gallon, and you now have to pay $4.00 a gallon, that’s a significant increase. And you’re going to see that for all of your staples. Unless incomes increase dramatically under Cain’s plan (and there’s no reason to think they will), the dollar in the hands of the poor will become less powerful for basic goods.

So what’s better? A Flat Tax is a better alternative. It has the advantages Cain wants (simplifying the tax code, reducing the IRS footprint, and reducing tax-collection burdens on the Government and tax-payer), but it doesn’t have a multiplier effect towards consumer goods. The Flat Tax is higher (you’d need a 17-21% Flat Tax rate currently to get to about $3 trillion Federal revenue from GDP) and therefore “scarier” (although Cain’s 9/9/9 plan comes out to 27%). Bear in mind this works with number gathered during a recession, and this kind of tax reduction would certainly spur the economy.

Putting in a Capital Gains Tax about 75% that of of the Flat tax (so 15% capital gains at 20% Flat tax) would spark investment as well.

Setting standard deductions at $15000 for a single person, add $10000 for a spouse, and $5000 per child until you get to a maximum deduction of $50000. Also, end EIC. The government should not be paying you to not earn enough. It’s enough of a boon to pay 0% in taxes. Maintain deduction for mortgage interest, and include a deduction for health insurance premiums, elementary and secondary tuition, and child care. No other deductions.

Combine this with the Ryan plan to reform Medicare and combine it with a similar plan to rescue Social Security from insolvency as well as plans to curb the growth of government and run with a balanced budget, and you will start running surpluses to pay towards paying the national debt off. And once that debt is gone, shift the flat tax downwards.

Also, to prevent government tax increases, pass an amendment to set the national tax rate, as well as an amendment which requires any increases in that rate to have 2/3 majorities in Congress, WH approval, and finally approval by a majority of states. To reduce the tax level, only a simple majority in Congress is needed– no ratification by states.

I look forward to any feedback in the comments section.

(And my math may be a bit off– I’m writing this under duress!  🙂  )

UPDATE: I did some corrections.  Cain is not proposing a VAT, he’s proposing a National Sales Tax.  A VAT would have a much smaller impact as the tax is not compounded as it moves on, and only the tax itself is passed onto the consumer.




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My name is Doc. Welcome to my blog. If you're visiting from another blog, add me to your blogroll (and I'll happily reciprocate). I have a Ph.D. in Chemistry and live in Wisconsin. If you have any questions, feel free to email me. My email is docattheautopsy at gmail. (No linking to deflate the incredible spam monsters).

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