I support Gov. Jerry Brown’s proposal to reduce the state’s $25
billion budget deficit by cutting spending and increasing taxes
nearly equally, approximately $12.5 billion each. I would prefer
more in spending cuts and less tax hikes, but I’m willing to
compromise. This support assumes he is serious about the cuts.
I support Gov. Jerry Brown’s proposal to reduce the state’s $25 billion budget deficit by cutting spending and increasing taxes nearly equally, approximately $12.5 billion each. I would prefer more in spending cuts and less tax hikes, but I’m willing to compromise. This support assumes he is serious about the cuts.
I’m sure he’s serious about the tax hikes – politicians always are.
I just do not want to end up just paying someone else, the county or city, for spending cuts that never materialize. That would be the liability shifting, a favorite government tactic.
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Last week the Federal Reserve quietly changed their accounting procedures to ensure they could never go bankrupt. The Fed usually sends all the money it collects back to the US Treasury. However, from now on they’ll just keep what they need to cover their liabilities. This is like telling your wife to pay a bill from the joint checking account then pretending you no longer owe it. Since the Fed runs the government’s money-generating computer programs – printing presses are not practical for moving billions – they are unlikely to go broke anyway.
My friend Bob in Oklahoma came up with concept of reverse earmarks to shift the liabilities back. First, calculate how much taxes you owe and then designate where you want the money to go. I like Bob’s idea. Politicians have been using earmarks for a long time, but now that they are have no more money to give away they finally want to get rid of them. Why not reverse the process and let the taxpayers do the earmarking? Anything not funded is just dropped from the budget.
The new federal budget proposals should be called The Big Freeze. The administration has raised the spending level into the stratosphere – now they want to freeze it there. The Congress has kept the tax rates down without fixing the tax code, which has always been the real problem. Now they want to freeze it there. I’m willing to support both those proposals provided they do one more thing – freeze the national debt our liabilities. Do that and we can all enjoy The Big Freeze.
The most disturbing story of the week out of Washington was that the government has spent more than $160 million to date defending the former executives of Fannie Mae and Freddie Mac from investor lawsuits charging that they failed to fulfilled their fiduciary responsibilities. This expenditure is strange because the Feds know the charge is true. After all, the government demanded the same execs return $115 million in ill-gotten bonuses over the identical issues; they actually recovered only $31 million. Naturally, the government wanted to recoup its illegitimate losses; however, they do not want other investors to be repaid because the treasury would have to do the paying now that it owns both agencies. You see the taxpayers bought the liabilities – again.
This is the biggest lose-lose proposition ever foisted off on the taxpayers who have to pick up all the bills to shield those who mismanaged these agencies. That’s what happens when you put a bunch of political hacks in charge of a lot of money – in the end the rich get lawyers, the lawyers get rich and you pay for it.
I thought of starting a limited liability corporation with no assets. All it would do is take in government liabilities. What can the creditors do? If they sue and win, they can only collect those liabilities. Come to think of it, that’s exactly what’s been happening, except it was the taxpayers that bought them all.
Marty Richman is a Hollister resident.
