Choosing The Right Lane To Travel

In pursuit of Constitutionally grounded governance, free markets and individual liberty

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"We should never despair, our situation before has been unpromising and has changed for the better, so I trust, it will again. If new difficulties arise, we must only put forth new exertions and proportion our efforts to the exigency of the times." --George Washington, letter to Philip Schuyler, 1777

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Will We Go Over the Fiscal Cliff? Written by Gary North

Obama, Reid. and Boehner are trying to work out a deal to avoid automatic spending cuts, heavily in the Defense budget, trhat go into effect automatically on January 1. Obama wants to tax the rich. Boehner has said “no deal.” Boehner is on the hot seat. Will he stick to his guns? Will he let the cuts begin? He can probably block the tax increases. The House Republicans will go along with him. His initial comments sound conciliatory. Gridlock could begin now. One Canadian financial commentator has laid out the economic issues. Tax increases (automatic) could cause a recession. This could spread beyond U.S. borders. Another four years under U.S. President Barak Obama is seen as generally positive for the Canadian economy. But fears about the looming “fiscal cliff” quickly overtook the initial euphoria. North American stock markets traded sharply lower on continuing uncertainty over how a deeply divided Washington will deal with nearly $600 billion (U.S.) in tax increases and spending cuts that come into effect in 2013. If unresolved, the so-called “fiscal cliff” – a phrase coined by U.S. Federal Reserve chairman Ben Bernanke – threatens to plunge the U.S. back into recession, dragging Canada and other global economies down with it. . . .

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8 of 10 Richest Counties Voted for Obama Written by Gary North

In the richest, Massachusetts’ Nantucket County, where average annual household income is over $137,000, Obama won by 63 percent to Romney’s 36 percent with all precincts reporting. . . . In none of the richest counties was the margin of victory wider than in California’s Marin County, just north of San Francisco, where the president won by 74 percent to 23 percent, with all precincts reporting. In Marin, the average annual household income is $128,544.

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Obama's Top 8 Post-Election Economic Issues

1.  Europe

The president did not mention Europe in his acceptance speech, nor was the Eurozone a major topic during the campaign. But the Eurozone's $17 trillion economy is not easy to ignore.  Protests turned violent in Athens in their second day as Greek Prime Minister Antonis Samaras was seeking approval from parliament on Wednesday for austerity measures to receive needed aid. Meanwhile, European Central Bank president Mario Draghi said the Eurozone crisis was weighing on Germany's economy.

2.  Healthcare

"The good news is that the Affordable Care Act set change in motion and that momentum is not going away," said Tracy Watts, partner with consulting firm Mercer. She said she is seeing slower cost increases as a result of reform, which moves employers to make bold changes in health care. However, employers are anxiously awaiting guidance about what rules will look like for 2014.  "Regardless of the outcome of the election, the goals around health benefits for employers remain the same: better consumer experience, improve employee health and manage cost," she said. She said some employers are embracing two trends. First, there is a movement toward consumer-directed plans, or high deductible account-based plans often paired with tax-preferred health accounts for employees, which can result in savings. Second, employers are implementing defined contribution to manage year-over-year increase in costs. Watts said this is accomplished by spending a pre-defined amount on a basic plan offering and giving employees the option to buy additional coverage.

3.  Payroll taxes

Scott Brown, chief economist at Raymond James, said the fiscal cliff isn't necessarily a cliff.  "The economy won't grind to a halt on January 1," he said. However, it is possible the average American will lose some money in their pockets as the government deals with its budget deficit.  In particular, the payroll tax is scheduled to return to 6.2 percent in January from 4.2 percent. Brown said a deal is unlikely by the end of the year. "My guess is that the fiscal cliff will hit, and then negotiations can begin from there. Tax rates will end up higher than they are now, but lower than they would be otherwise," he said.

4. Bush tax cuts

Along with an increase in payroll taxes, tax cuts for higher earners from George W. Bush's administration are also set to expire by year's end.  As President Obama has staunchly campaigned for the middle class, he has insisted on raising tax rates for the highest earners.  "The president wants the Bush tax cuts to go away for high earners, which are most executives of companies," said Gregg Passin, U.S. executive rewards leader with Mercer Consulting. "Assuming that does happen and ordinary income tax rates increase in 2013, that might lead some companies to want to pay bonuses in 2012 that would normally be in 2013." Passin said companies were at least considering options like this in anticipation of higher taxes, but companies and wealthy individuals will make their own choices.

5. Unemployment benefits

President Obama also did not mention unemployment benefits for the 12.3 million unemployed people in the country despite the upcoming expiration of emergency unemployment benefits at year's end, which will likely affect some of the most vulnerable Americans.  "I know that's an area where they might cut back as the economy is getting better," said Nita Beecher, an attorney and principal with Mercer. "I think that's going to be a balancing act for both the administration and Republicans in harder hit areas."  The Congressional Budget Office said the expiration of the extended emergency unemployment benefits through the Middle Class Tax Relief and Job Creation Act of 2012 will lower spending by $26 billion in fiscal year 2013.  However, the president did mention job programs for veterans in his speech on Tuesday night.  Overall, Beecher said the administration is friendly to workers' rights, such as union rights and pay equity for women. She advises employers to have stronger record keeping and documentation if they don't have this information in place in dealing with workers' agencies, such as the EEOC and NLRB.

6. Spending cuts

Some of the sectors anticipating spending cuts saw decreases in their stock prices the day after the election, including the defense sector. "A lot of the sectors that were hoping for a Romney win are kind of getting beaten up a little bit today," said Larson. "A Democratic presidency is seen to be less friendly to overall defense spending than Republicans, which are a little bit more hawkish." Shares of General Dynamics Corporation were down 3.45 percent, to $66.89 in late afternoon trading. Lockheed Martin's stock was down almost 4 percent to $91.14.

7. Green energy

President Obama took heat during the campaign for his support of Solyndra, a solar energy company that received government stimulus funds and ultimately failed. Governor Romney repeatedly criticized the administration's decision to intervene instead of allowing market forces to act accordingly. While the president may not be jumping up to support specific companies immediately, he was not shy to address the environment in his acceptance speech. "We want our children to live in an America that isn't burdened by debt, that isn't weakened by inequality. That isn't weakened by the destructive power of a warming planet," he said, adding that he would work "freeing ourselves from foreign oil." All businesses, not just the green energy industry, will be watching the administration's next moves regarding climate change, which has been blamed in part for superstorm Sandy, whether it's in the form of regulations, penalties or tax breaks.

8. The next Federal Reserve Chairman

While U.S. stocks are down, the bigger reaction initially were bonds. Brown said that may be in part to the expectation that President Obama will now choose Federal Chairman Ben Bernanke's successor once his term ends in Jan. 2014. "Romney would have replaced Fed Chairman Bernanke when his term ends with someone more hawkish. Obama is expected to either re-nominate Bernanke, if he wants the job, or replace him with a kindred spirit," Brown said, which would likely not create a major change in monetary policy. The Federal Reserve has said it will maintain low interest rates through mid-2015 as the labor market struggles to recover. 

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Bipartisanship to help the middleclass?

President Barack Obama has defeated the odds and his Republican challenger. What does this mean for America? Let’s ask Obama’s Senior Adviser, Valerie Jarrett, who is considered among Democrats as “Obama’s brain.” She is alleged to have said on the morning of Election Day,

“After we win this election, it’s our turn. Payback time. Everyone not with us is against us and they better be ready because we don’t forget. The ones who helped us will be rewarded, the ones who opposed us will get what they deserve. There is going to be hell to pay. Congress won’t be a problem for us this time. No election to worry about after this is over and we have two judges ready to go.”

One wonders in anxiety just what sort of “hell” the Obama administration plans to unleash on the President’s dissenters, but no such ambiguity exists in the phrase “Congress won’t be a problem for us this time.” So much for bipartisan action to bootstrap the country on the road to success.  Sounds like all out "war".

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Boeing Announces Big Layoffs in Defense Division By: Reuters

Boeing announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs. The company told employees about the changes on Wednesday, in a memo obtained by Reuters and confirmed by Boeing. Boeing, the Pentagon's second-largest supplier, said the changes were the latest step in an affordability drive that has already reduced the company's costs by $2.2 billion since 2010, according to the memo. The measures come as U.S. weapons makers are under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.

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Honor, justice, and humanity, forbad us tamely to surrender that freedom which we received from our gallant ancestors, and which our innocent posterity have a right to receive from us.  We cannot endure the infamy and guilt of resigning succeeding generations to that wretchedness which inevitably awaits them if we basely entail hereditary bondage on them."  - Thomas Jefferson 1775

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CBO: Corporate Taxes Up 34% in FY12; Individual Taxes Up 4%;Deficit Still Tops $1T By Terence P. Jeffrey

The Congressional Budget Office officially reported on Wednesday that the federal budget deficit in fiscal 2012 (which ended on Sept. 30) topped a trillion dollars for the fourth straight year even though federal taxes paid by individuals increased by 4 percent during the year and federal income taxes paid by corporation increased by about 34 percent. The increase in corporate federal income tax payments was largely due to changes in the tax rules that corporations were required to follow. “The federal government incurred a budget deficit of $1.1 trillion in fiscal year 2012, the fourth consecutive year with a deficit above $1.0 trillion,” said the CBO. “Revenues from all major sources increased in 2012,” CBO reported. “Corporate income taxes accounted for about 40 percent of the increase in total revenues, rising by $61 billion (or 34 percent) and increasing from 1.2 percent to 1.6 percent of GDP. The growth in corporate receipts resulted largely from changes in tax rules in recent years, particularly those that dictate how quickly firms may deduct the cost of their investments in equipment.” Individuals also paid more taxes in 2012, according to CBO. “Receipts from individual income taxes grew by $41 billion (or 4 percent), and remained at 7.3 percent of GDP in 2012. More than half of the increase came from withheld taxes, which rose by $27 billion (or3 percent).”

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Most Want GOP to Work With Obama, GOP Voters Disagree

Most voters feel it’s more important for Republicans to work with President Obama than stand up for what their party believes in. GOP voters overwhelmingly disagree, even as their party’s congressional leaders reach out to Obama to make a budget deal. The latest Rasmussen Reports national telephone survey finds that 46% of Likely U.S. Voters believe the president set the right tone for the future with his victory speech Tuesday night. Thirty-two percent (32%) disagree and think he did not set the right tone.

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Can America Survive? Wrong Question!

This Tuesday is not an election … it’s a referendum. It’s not even a referendum on Mitt Romney or Barack Obama; it’s a referendum on freedom in America. This Tuesday, Americans get to choose between the French Revolution and the American Revolution.”– Dennis Prager, November 3rd 2012

“Americans have gone a long way down the wrong road.” – Billy Graham, November 7th, 2012

I’m not going to complain about the outcome because conservatives don’t blame the refs, but I can’t help but note that it smelled a lot like Venezuela last night. I went to bed last night in Venezuela and I woke up to mourning in America. We live in a different America today. We now live in the USSA and we have to adjust and prepare.

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Governments & Money
Please take a dollar bill from your wallet and hold it up. Done? Great, now please could you tell me what it is? Well, what's the answer?  The answer is: paper with patterns printed on it. Nothing more. What you're essentially holding in your hand is an "IOU" from the government. You're saying that you trust the government to honor the value of that "IOU" note. Once upon a time, money was gold coins and actually worth something. In those days, your dollar really would be worth a dollar. As the financial system became more sophisticated though, paper notes were issued based on government's PHYSICAL holding of gold bullion. However, in 1930, this system (known as The Gold Standard) was dropped. Here in the land of the free, gold was even confiscated from anyone known to be holding it. Why was this perfectly honorable system dropped? Because it meant politicians could only spend what they owned. By dropping The Gold Standard, governments created their own credit cards in the form of printing presses. They quite literally gave themselves a license to print money!

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"I love the man that can smile in trouble, that can gather strength from distress, and grow brave by reflection. 'Tis the business of little minds to shrink, but he whose heart is firm, and whose conscience approves his conduct, will