Saturday, February 13 , 2016, 7:44 pm | Fair 52º

Tom Watson: Obama’s Budget Proposal Profoundly Irresponsible

The president — and Rep. Capps, for that matter — endorse continued out-of-control spending that will irreparably damage our country

By Tom Watson |

President Barack Obama submitted his budget proposal last week, and it was a major disappointment.

It did not deal with in a serious way the massive deficit spending we have, and in fact proposed another $7 trillion in deficit spending over the life of the budget. It did nothing to address the entitlement train wreck that is clearly impending. The assumptions of growth, interest rates and revenues are wildly optimistic, and the budget cynically didn’t include interest payments on our existing debt. Even left-leaning newspapers such as the San Francisco Chronicle panned it.

President Obama had a golden opportunity to lead and he punted. These are serious times, and this was an unserious proposal that reflects very poorly upon the president. Not only is it disappointing, it is profoundly irresponsible to propose something that is so clearly out of line with our financial reality.

We simply can’t continue spending money like we have been of late. In three years (fiscal year 2009-11), our country will rack up about $4.5 trillion in new debt. For context on the incredible level of spending this represents, World War II cost our country less than that in constant dollars. We fought and won the largest war in history, funded the British and Russians and supplied them with massive amounts of war material, had many millions of our own people in uniform, saved the planet for democracy and spent about $4 trillion in 2009 dollars over about four years. What exactly have we achieved for this three-year, $4.5 trillion in new debt?

This year, our federal budget deficit will reach $1.6 trillion. That is about $5,000 per person in deficit spending this year alone. Since the 1960s, federal government spending per household has tripled in constant dollar terms to more than $30,000. Does anyone believe that our government is three times as good, or have our services improved by a factor of three? Nearly 40 cents of every dollar we are spending now is borrowed money.

Government spending has grown at a rate of eight times faster than median household income in the past 40 years. We have unfunded liabilities for the entitlement programs of Social Security, Medicare and Medicaid that dwarf our official debt and Gross Domestic Product.

Government spending is 25 percent of GDP, much higher than our historical tax revenues of only 18 percent of GDP. Interest payments alone on our debt are projected to reach about $1 trillion per year by 2020, significantly higher than the entire Department of Defense budget. This level of spending is irresponsible, unsustainable and ultimately destructive.

Our national debt now is approaching our GDP, a historical point of decline. History has shown us that the primary reason countries collapse or have revolutions is debt. A 90 percent debt-to-GDP ratio has proven to be the level when countries, which ultimately fail, begin their decline. When Greece collapsed last year, its debt-to-GDP ratio was about 115 percent. We are not far behind.

Continuing to run trillion-dollar deficits year-over-year will hasten our demise. Unfortunately, the budget President Obama submitted does just that. This continued irresponsible spending would irreparably damage our country and guarantee future generations a greatly reduced standard of living. It is simply immoral to burden future generations with a crushing debt they had no hand in creating.

Equally disappointing, though hardly surprising, were the comments from our own Rep. Lois Capps, D-Santa Barbara. She is quoted as saying the president’s budget takes the necessary steps to “put our fiscal house in order.” On what planet? How on this Earth does a budget that proposes $7 trillion in new deficits put our fiscal house in order? Then she is quoted as saying that the president’s road map makes tough choices and connects American homes to 21st-century technologies and speeds up America’s transition to a cleaner, safer energy future. What?

This is all meaningless pabulum that we clearly can’t afford — whatever it means. Unfortunately, this is the kind of fuzzy and misguided thinking we have come to expect from Capps, and one of the reasons why we find ourselves in this precarious fiscal situation.

Fortunately, most Americans seem to have awakened to the dangers this absurd runaway spending are posing to our country. The election of 2010 was a primal cry from across the country to stop the spending and reign in government. President Obama and Capps apparently didn’t get the message. It is time to get serious about this out-of-control spending before it destroys our country. The president needs to get serious and lead, and Capps might consider an accounting course.

Our country can no longer afford this reckless, irresponsible and, frankly, mindless fiscal policy to continue. Our children deserve better.

Tom Watson is a Santa Barbara businessman and was the 2010 Republican nominee for the 23rd Congressional District.

» on 02.23.11 @ 10:32 PM

But wait Tom , Dick Cheney who got a standing ovation at last years CPAC , told us “Reagan proved that deficits dont matter” . I think he must have meant that deficits only matter when there is a Dem in the White House.

» on 02.24.11 @ 01:36 AM

I got to see first hand how Tom Watson operates and what his character is like when I did poll duty in Isla Vista.  His campaign had decided that they would target IV as a place where there was corrupt poll work.  They trained 40 poll watchers and put them in each of the polling places in IV.  Sure enough, an hour or so after the polls closed they were claiming that we poll workers had improperly handled provisional ballots and they were going to protest the vote.  They did not have a clue of how provisionals MUST be handled by the pollworkers - and how much more county elections scrutitzed provisional ballots then regular ballots.  It wasn’t until they realized that if every ballot in IV had gone for Watson that would have still lost that they quietly dissappeared into oblivion - and now he emerges as some kind of expert - and as expected clobbering Lois.

» on 02.24.11 @ 01:37 AM


What does that have to do with Obama’s budget?  Stay on topic if you can.  Is it possible for you to address the content of this piece and not go back to the past.  This is about Obama’s 2012 budget not Bush’s 2002 budget.  Deal with the substance.  Where is he off base here?

» on 02.24.11 @ 01:49 AM

Tennis Bum,

What does handling of provisional ballots have to do with Obama’s budget?  Deal with the substance of the article, if you don’t like it refute it with facts and logic, don’t attack the author’s character.  Please stay on topic.  As to Lois’ comments, she made them herself.  They stand on their own. 

Let’s see some substance and less personal attacks.

» on 02.24.11 @ 08:57 AM

Daddies Boy, we all know this years budget wil be a mess- no point in me rehashing the valid points Watson makes. I know it , you know it , and I suspect Obama himself knows it. Fine.
  My criticism is with the hypocrisy. Yes, the right would like to just sweep their poor record on deficit spending under the rug . Problem is that the mess is still there under the rug. Framing this deficit issue as all Obama’a creation earns points only with you entrenched types .  My quoting Cheney saying “Reagan proved deficits dont matter” is meant to remind people of the sizeable Republican contribution to this mess.
  BTW , nice new moniker , but your very recognizeable rhetoric renders it very transparent.

» on 02.24.11 @ 09:56 AM

I find it an inconvenient truth that you folks who hold Obama solely responsible for our debt crisis never mention the George W. Bush contribution to this set of circumstances. Two unfunded, misguided wars, tax breaks for people who aren’t creating jobs with those funds, and a non-regulatory environment on Wall Street that gave life to greed…why didn’t you mention these factors? Likely because you have drank the partisan politics kool aid. As far as I am concerned, presenting information in this partisan way is disingenuous and makes you part of the problem, not part of any solution.

» on 02.24.11 @ 11:19 AM

President Obama has never even run a private business the size of a small candy store (nor have most of his staff), so why would we expect Obama to understand anything about budgets or the way the economy really works? Obama thinks Uncle Bernanke will just print money to achieve U.S. prosperity. I hope everyone realizes Obama’s legacy regarding economic policy is ridiculous- PRINT and SPEND money, and read the teleprompter. Its really kind of pathetic. So far Obama is looking like a one termer.

» on 02.24.11 @ 12:02 PM

It is amazing to see how quickly the progs, and their Dear Leader, have imploded and devolved into what we always knew they were – violent hacks.  Heck you only need to see perfect examples of their sycophants posting here.  But let’s look at how much damage this inexperienced boy has done to this nation.

The first figure is from January 2009 when the Dear Leader took power; the second number is today, the third number is the hope and change – and yes that means change we can believe in less the hope.  Sterling leadership from such an experienced crew of angry idiots.

Avg. retail price/gallon gas in U.S.$1.83 $3.104   +69.6%

Gold: $853.25 $1,369.50 +60.5%2

Corn:  $3.56   $6.33   +78.1%  (I’m sure everyone loves their participation in starving the rest of the world in our ignorant quest for the God Green and our contribution to an over subsidized and useless technology)

Soybeans:  $9.66 $13.75   +42.3%

Sugar:  $13.37   $35.39 +164.7%  (I’m sure My Belle Michelle is happy about this)

Unemployment rate:  7.6%  9.4%  +23.7%

Number of unemployed:  11,616,000   14,485,000   +24.7%

Number of fed. employees, not including military:  2,779,000   2,840,000   +2.2%

Real median household income:  $50,112   $49,777   -0.7%4 (good job boys)

Number of food stamp recipients:  31,983,716   43,200,878   +35.1%  (you have to love the progs compassion…more the merrier eh boys?)

Number of unemployment benefit recipients:  7,526,598   9,193,838   +22.2%6 (more slaves for the party, right?)

Number of long-term unemployed:  2,600,000   6,400,000   +146.2% 

Poverty rate for individuals:  13.2%  14.3%  +8.3%  (don’t worry folks Nanny will take care of you)

People in poverty in U.S.:  39,800,000   43,600,000   +9.5%

U.S. rank in Economic Freedom World Rankings:  5th   9th – God isn’t socialism great?  Wait, can I mention God or will the Birkenstock’s send me to the Gulag?

U.S. M1 money supply in billions:  1,575.1   1,865.7   +18.4%  (“gee Mr. Rodgers does that mean that since the dollar is worth less that items cost more?”  Yes Johnny.  But remember that the young man running around telling us what to eat as he chokes down ribs, and tells you to ride in the back of the bus, says that there is no inflation.  “Wow Mr. Rodgers that kinda sounds like that dude in Iraq they called Baghdad Bob”  Your right Johnny but in this case the Baghdad Bob is an American of diminished capacity.

National debt in trillions:  $10.627   $14.052   +32.2

And, of course, that brilliant budget submitted by this idiot adds another 9 trillion to the debt…wow a true genius. But then WE always knew what he and his minions are.

» on 02.24.11 @ 01:57 PM

You keep rewriting history.  What was the unemployment rate under George Bush until 2007?  You know…...the year the housing crisis (created by Dems), imploded and a Democratic Congress was in power.
How much more revenue was created by the 4.5 to 5% unemployment rate?  20% more than Clinton?
Facts man, not emotion!

» on 02.24.11 @ 03:04 PM

Don’t worry about it righty…Petry already gave him the facts.  Remember this.  A marxist will always ignore reality until it reachs up and slaps them.  Then they run around and blame others. Here’s another fact they can’t handle.  They can run around yelling and threatening blood in the streets all they want; the reality is that there is no money.

» on 02.24.11 @ 03:55 PM

We are where we are from a debt standpoint, it is obviously cumulative.  While true that Bush did spend too much, this guy has pushed the spending accelerator through the floor board and shows no signs of letting up as we are speeding towards an obvious financial cliff.  In three years he will have added more debt than was added under Bush in 8 years.  Pointing to bad behavior by past administrations does not excuse the abysmal performance of our current administration.

What Obama has done and continues to want to do to our country and our finances is inexcusable. To propose such an absolutely preposterous budget at this point is basically a dereliction of duty.  For Lois to be so out of touch with reality of where we are is frightening. 

So, all you Obama fans, please deal with the article and quit dissembling.

» on 02.24.11 @ 10:04 PM

Glad to see the newfound sense of fiscal responsibility expressed by our Noozhawk righties. Too bad we will be adding another $2 trillion ( borrowed from China) to fund the GOP/Obama welfare for the wealthy program . Now thats fiscal responsibility for ya. Liars and crooks .

» on 02.24.11 @ 10:34 PM

You’re welcome son. Good to see that you’ve been sent to the choldrens table. The adults gave taken over.

» on 02.24.11 @ 11:36 PM

Can you lefties engage in an reasoned arguments without hurling insults or personally attacking people?  When you resort to these tactics it is a tacit admission you’ve lost the argument.  Which in this case you have because there is no defending this disaster unfolding before our eyes.

» on 02.25.11 @ 08:38 AM

O.K. Wireless , I will try to make my point again with more civility.  The GOP/Obama extension of the Bush tax cuts are fiscally irresponsible and will add aprox. $ 2 trillion (borrowed w/interest)to the deficit according to budget analysts. Even many conservatives see the folly in that although one wouldnt know it by reading the dogma posted by many of our Noozhawk rightwingnuts.. oops, sorry about the slur .

» on 02.25.11 @ 01:06 PM

Wireless, as usual this particular “share the wealth” socialist refuses to understand history and relational economics.  Socialist policies have always failed; especially when applied to government taxation policy.  Whereas Khaldun’s, as described and fleshed out by Laffer, have always shown themselves to be a far stronger application of responsible government taxation.

Now some fairly ignorant proponents might try to redefine taxes as revenue.  It is a lazy fools approach and one that is blatantly fraudulent and intellectually devoid.  But every prog I have met is a fraud. They frame all discussion based on anger and envy.  “Why does that guy get the big house? That is not fair – especially since I’m as good as him and I deserve one too.  He must be evil or must have screwed over some poor working stiff to get where he is. We must beat him down to our level.”

But reality has a nasty habit of slapping these idiots down.  They will propose that tax rates should be as high as they were in the fifties.  Their dream is that the rates be similar to that bastion of freedom – the defunct Soviet Union.  They will use an argument like this; “in the Soviet Union there was an effective100% tax rate and yet, while the Soviets were not known for their efficiency, the government still managed to fund a very large and highly dispersed military while at the same time creating a highly advanced space program.” Of course we should ignore the facts that their standard of living was abysmal, their people were starving, people were screaming to get out, the Gulags were full, and on and on.  And, oh yes, they got their asses kicked by free market capitalism.

Here’s a tip.  You can always discern a Soviet American when you realize that their personal philosophy can be stated as this, “What’s mine is mine.  What’s yours is negotiable.”

Now Wireless, I personally think that the goal of such people is the ultimate destruction of individual freedom.  Gratefully a vast majority of the American public disagreed and bitch slapped these tools last November. But it is obvious we will have expand our victory by defeating these vile people again, and again, and again.

» on 02.25.11 @ 01:19 PM


Thanks for engaging in rational discussion.  I’ll ignore the last swipe.
First off, where did this $2T number come from?  I believe that is grossly overstated.  That works out to about $7000 per person in this country.  Even if they let all of the Bush tax rates expire it would not raise that much, not even close.

There are two sides to a balance sheet, income and expenses.  The left is fixated on increasing govt. revenue through increased taxes and seems to have no appetite to reduce expenses (Obama’s budget exhibit 10,029).  We on the right want to cut expenses and grow.  Kind of like businesses do, but I digress.

The economy is not a zero sum game, because the natural state of our economy is to grow, the pie naturally wants to expand.  Denying the government more revenue in the short run by not increasing in taxes does not mean that they won’t see more revenue in the near future.  Every dollar that the government takes in taxation is a dollar not at work in the private economy where wealth, profits and growth are created.  The government is overhead, they create nothing.  Like the HR or Admin departments in a company, they perform a necessary function but you keep them as small as possible because they generate no value.

A dollar left in the private sector is a dollar that will be spent and invested and create growth.  Academic studies and our collective experience over the ages show that a dollar in the private sector will turn into about $1.05 or so as businesses and individuals engage in economic activity.  It’s called economic growth.  A dollar given to the government instantly turns to about .79 cents just to cover the cost of government itself.  If government spending could drive the economy we would never have recessions.  Just keep taxing and spending and everything would be just great.  We all know that isn’t the case, government driven stimulus spending didn’t work in the Depression, it didn’t work in Japan over the last 15 years and it didn’t work here with Obama’s stimulus.  Private sector growth is where we need to focus our energy.

So back to taxes.  Even the President and Democrats in Congress (most of them anyway) had to concede that raising taxes during a recession is suicidal (see paragraph above).  No country, ever, has taxed their to prosperity.  If you want economic growth taking dollars out of the private sector, whether it is from “rich” people or corporations or “poor” people, is not going to help the economy grow and create jobs.  That isn’t even arguable.  Less money in the private sector means less economic growth.  Period.  Less economic growth means less of a tax base and less tax revenue.

The problem we have is too little growth and not enough employment.  This economy is not going to recover and our budget problems can’t be effectively addressed when we have 10% unemployment and about 20% underemployment.  We have to get the economy growing again so employment will improve and we can expand the tax base.  We need more taxpayers, bottom line.  Raising taxes is not going to get us more taxpayers.

» on 02.25.11 @ 06:19 PM

Tom forgot to mention one way to cut the deficit. End the earmark he has that keeps his company going.  That is something I’m sure the Tea Party and the Dems here can both agree on.

» on 02.25.11 @ 06:34 PM

Daniel Petry- you left a couple of numbers out

January 2009 GDP growth -6.8% (thanks Bush) Today +2.8 %
January 2009 job loses 779000 last moth +150000

seems a little more important than the price of Soybeans going up.

» on 02.25.11 @ 07:33 PM

Great photo of Tom. Thanks. Guess he’s trying to position himself for another run.

Why wasn’t Tom this up-front during all the years when Team Newt, Team Denny, GW, and Greenspan, converted Clinton’s Budget surpluses into the biggest Debt increase inmodern history?

Where was Tom when we did Tax Cuts for the Rich, without any concomittant
reduction in federal spending, to offset revenue loss? Or when we decided to
fight two foreign wars, off-budget? Or when we did a Medicare “present” that
increased benefits, but added no new revenue to cover them?

I guess he was wrestling with the longest case of political laryngitis in the history of the south coast.

Lois Capps voted AGAINST many of those fiscal outrages. But that would spoil
Tom’s case, wouldn’t it. But hey, great photo.

» on 02.25.11 @ 09:21 PM

Wire , not talking about raising taxes , simply allowing the unfunded Bush Tax cuts to expire. Oops ... too late. Obama the latent Republican has sunk the ship for the next two years on that . If logic doesnt tell you that cutting taxes while waging two wars is fiscally irresponsible , then there is no point debating further on this . It was reckless , harebrained policy instituted by W then , and is bad policy supported by Obama now. We are borrowing billions to fund an unwinnable war in Afghanistan , and to fund the welfare for billionaires program , both unneccessary and unwanted by most voters as shown in past polls on these topics.
On a different note ,please know that when you throw in with a dude like Petry you are joining a fringe element as evidenced by his past Noozhawk comment that -  ” Greed is good . I love greed. ”  Yuck! Kinda 1990’s , dont ya think?

» on 02.25.11 @ 09:28 PM

sbtwo and publius,

Yet again we descend into attacking the messenger and making it personal.  Let’s see you deal with the points in the article for a change.  How hard is that?

I know its hard watching your whole left wing worldview collapsing around you with astonishing speed but try to be rational.  The soak the rich stuff is getting really tired, can’t you come up with something else?  The top 5% of taxpayers in this country pay over half of the income taxes, how much more do you propose they pay?

How does taking money from the “rich” help the economy grow and create jobs?  Please explain that to we uncaring conservative knuckle-dragging Neanderthals.  Where do you think the investment capital comes from to start and grow new companies?  Hint, it doesn’t come from “poor” people.  This redistributionist tripe is so discredited, it hasn’t worked anywhere, ever.  If it did the Soviet Union would still be around.  Nobody is buying it and continuing beating that tired old drum is chasing people away from the Dems in large numbers.  Witness the 2010 elections. 

Wake up, times have changed and you guys are still sounding like Lenin back in the Bolshevik revolution.  Workers unite!  From each according to their means, to each according to their needs.

Here is a novel idea, if you really care about the little guy, why don’t you focus on creating opportunity and growth instead of stealing people’s earnings?

» on 02.25.11 @ 10:21 PM

Can you give us the name of your drug dealer?  I’d love to sample what you are on.  Let’s get real.  Since you live in the past let me remind you progs of whence you come and why you were crushed November 2 and will lose the Presidency and more Senate and House seats in ‘12. 

Oh before I forget one thing you need to remember is that the House and Senate were controlled by the dems for two years prior to ‘08.  Small point of history…and let’s not forget the brilliance of our resident cross dresser saying that housing is in perfect health.  OK now on to the ad nauseum
“I can never move forward because I’m always looking back” American soviets. 

With the collapse of the dotcom bubble during Clinton’s Presidency and the oh so small issue of 3000 Americans being slaughtered in New York; Bush was faced with a recession that officially began roughly seven weeks after he took office.  That said, once his administration reacted to the situation with returning money to those that earned it, our country experienced years of economic growth and a record 52 straight months of job creation.  More than 8 million new jobs were created. The unemployment rate averaged 5.3 percent and we experienced productivity gains that averaged 2.5 percent annually.  More than what was seen in the 70s, 80s, and 90s. Real after-tax income per capita increased by more than 11 percent. From 2000 to 2007, real GDP grew by more than 17 percent, a gain of nearly $2.1 trillion.

The implications by those progs posting here is that since Obama inherited everything he is guilty of nothing - other than running an infantile administration that is the laughing stock of the world.  Now our finely indoctrinated American soviets will say that Bush turned a budget surplus into a deficit.  Now I personally remember the dot-com bubble…especially since I made a fortune in it, but when Bush was inaugurated those budget surpluses were already evaporating as the economy was moving into a recession.  And for those very same Soviets (I really can’t call you Americans) it officially began in March of 2001. Combined with the “let’s ignore” the effects of 9/11, when we lost about 1 million jobs in less than 12 weeks…the surplus evaporated.

Now I personally don’t like a fair number of Bush’s policies but one thing I can say about the man is that he is a man and not some inexperienced boy who aspires to lead.  Bush pushed solutions that ignited the kind of growth that saw the deficit fall to 1 percent of GDP by 2007.  In fact before the manufactured financial mess of 2008, his budget deficits were 0.6 percentage points below the historical average. In fact I do remember he tried but failed to reform the mortgage industry. 

Now let’s look at the job deficit.  Which is defined as the difference between current levels and the jobs Obama promised to create by the end of 2010.  It is currently at 7+ million. The 2010 deficit was $1.47 trillion, or 10 percent of GDP, while the debt increased to $9.2 trillion, or close to 62 percent of GDP. And this idiot has just proposed another 1.6 trillion deficit which would add another 9 trillion – at best estimates to the 14+ trillion this brilliant example of a man-child has given us.  But he does throw great parties. During 43’s tenure the debt grew to an unacceptable $3 trillion.  But Obama makes the last 43 Presidents look like paupers.  In less than two years the great one added as much debt as Mr. Bush ran up in eight years and has now brought it to over $14 trillion. And let’s not forget that the Obamanistas passed an $862 billion stimulus package and assured us that unemployment would not exceed 8 percent; instead, unemployment, with under-employment, topping 19%.  And the CBO just released a figure that each “job” created cost the tax payers (you know the ones who truly count) upwards of over $240,000 per.  As for the price of corn and other food products, and gas, etc…I’ll make sure that those that are starving can thank America’s own brand of Soviets. But we can certainly tell the world that we are green.  Stupid yes, but defiinitely trying to be green.

» on 02.26.11 @ 01:54 AM


Where I come from when taxes go up that is a tax increase regardless of whether it is from an active or passive measure regarding the law.  You pay more either way that is by definition an increase in taxes.

Regardless, it doesn’t matter to the issue at hand.  Whether you call it a tax increase of letting the current rates expire and go up, the government is still taking money out of the private sector which, as I explained, is not going to help grow the economy and create more taxpayers which we desperately need.  Doesn’t matter what you call letting the “Bush Tax Cuts” expire, it is going to hurt the private economy which is ill advised, particularly with this anemic and jobless “recovery”.

So Obama is a latent Republican!  Wow, you are on the left.  I think the guy is basically a Marxist.  He is definitely of the “spread the wealth around” mindset, which is Marxist.  To quote Uncle Marx:  From each according to their means, to each according to their needs.  I frankly think Obama agrees with that sentiment.  Hasn’t shown me anything other than that mindset. 

As far as Afghanistan goes, we can’t just leave, we already know what happens when we leave them to their own devices.  What should Obama do?  I hear all you guys saying stop the war, stop the war, but no recommendations on what we should do.  There are two costs to consider:  the cost of doing something and the cost of not doing something.  If Obama thought we could leave Iraq and Afghanistan he would do it in a heartbeat.  According to govt. figures as of late last year we have spent about $1.1T total on both Iraq and Afghanistan since 2001 in funding directly for the war effort.  The stimulus blew about that much in basically a year.  The war is expensive but its not what is driving us off the cliff.  The wars will end at some point but the domestic spending, entitlements specifically, are the killer.

As far as funding welfare for billionaires, I tend to agree.  I tell you what.  Let’s end all farm subsidies, ethanol subsidies, energy subsidies, corporate welfare, stop the too big to fail policy and no more bailouts and lower the corporate tax rate to 15%.  It’s at 35% now which doesn’t raise that much money and chases companies offshore.  What do you say?  Maybe we can find some common ground here.

Dan speaks for himself, I speak for myself and you speak for yourself.

» on 02.26.11 @ 02:57 AM

What is important to realize is that the US dollar will be replaced as the worlds currency within the next few years…when that happens watch out.  When a barrel of oil is no longer pegged to the dollar…wow, watch the lefties scream then.  The hyper-inflation this administration is fostering right now through it’s QE2 + policy is being hidden by that very same policy.  Especially buying its own debt.  It is just slowing the process down. Even with their delay tactics we are seeing the start of this inflationary trend. 

But when the dollar is removed as the world currency the advantage we have enjoyed for more than 60 years will disappear literally over-nite.  There are a number of steps that can be taken to alleviate and even take advantage of these criminal policies…and Wireless you seem like someone who is aware of them.  I certainly would not discuss these approaches and give these posters any clue.  Wally actually thinks that his little 401K, home, and pension, will protect him from the big bad government he loves so dearly.  I don’t wish him the best.  Most of my business associates are transitioning out of the dollar as I have.  Wireless, you make great sense, and I enjoy your thoughtful and patient comments.  I wish you the best of luck.

» on 02.27.11 @ 01:34 PM

Well, as to the wars in Iraq and Afghanistan, we totally blew it.  The 20-somethings in Egypt, Tunisia, Libya, etc have now proven it… they don’t want al-Qaeda, they want rational secular governments.  If anything the US military involvements give the Islamic crazies justification for their wacko behavior.

So the quicker we get out of Iraq and Afghanistan, the better.  We simply cannot afford those wars, in addition.  There is no more money for them!  That is a big message of the current US debt crisis.

Medicare is the one with the big future liabilities… way more (proportionately) than Social Security.  Gotta credit Obama for putting everything + the kitchen sink in for cost control of medical costs.  It has been depressing to see the Republicans triangulate on that one… claiming a government takeover etc when they know darned well that cutting Medicare costs must happen.  If not Obama’s way, propose something way harsher, don’t make phony arguments that Obama is putting Medicare in danger.  It had darned well better be in danger.

And sure, cross-the-board cuts on Social Security.  Top 10% of SS recipients should receive 10% cuts, next 10% 9% cuts, next 10% 8%, and on down the line.  No needs testing… SS is a defined benefit pension plan, not a tax,  that invests solely in Treasury securities.  If we can’t cover the benefits reduce them.  But needs testing is breaking the contract (made in the 1930’s) with contributors.

We’re all tired of the finger pointing.  Let’s all be pro-US.  If you want to divest of the dollar, just move away to Mexico or Zimbabwe or Bahrain.

» on 02.27.11 @ 03:14 PM

You are showing your economic ignorance when you say something like, “If you want to divest of the dollar, just move away to Mexico or Zimbabwe or Bahrain.”  Why do that when I can make a bloody fortune by preparing for the removal of the Dollar as the World’s Reserve Currency.  Notice in my last post I called it “World Currency”  I did that to see who would step up and make a comment like…Love It Or Leave It, or If You Don’t Like America Why Don’t You Leave, or “If you want to divest of the dollar, just move away to Mexico or Zimbabwe or Bahrain.”  Bingo.

Here’s a brief economics lesson for you.  The US dollar is currently the worlds reserve currency.  That means that the US enjoys the enviable position of the rest of the world having to use US dollars for all forms of trade.  Now let’s take a look at the facts – and please don’t waste our time by coming back with inane comments like, “We’re all tired of the finger pointing. Let’s all be pro-US. If you want to
divest of the dollar, just move away to Mexico or Zimbabwe or Bahrain.”

For example, when a barrel of oil is bought and traded it is bought with the currency that it is pegged too.  The US dollar.  Now with the criminal borrowing and spending of the last two administrations and especially by the criminally incompetent Obama; the US dollar has lost more than 30% of its value in the last 4 years alone.  This means that dollar holdings by foreign entities have lost 30% of their value…it also means that your purchasing power has gone down by that amount.  That’s one of the prime reasons that commodity costs have gone up, and they are about to skyrocket.  That’s why most SMART individuals, and foreign governments, are converting out of the US dollar and into other vehicles like gold and silver.  Heck I have even invested in fully valued real estate. 

Now I could go on but I have a better option.  A very close friend of mine created a video that totally explains what is happening.  It’s a little long – because the subject has to be explained to those that have no economic clue…but it is awesome.  Check it out.  Then you can comment back to me.

Otherwise just go on being the victim you have always been.


» on 02.27.11 @ 06:07 PM

That Stansberry Doomsday Cult is a hoot.  Hope you’ve got lots of MREs, guns, ammo, water purifiers, and a rotating supply of antibiotics and antivirals in your basement Daniel.

Any presentation that starts with fearmongering and doesn’t get to the hard numbers by slide 3 is unworthy.  Hard to believe I watched that through slide 10 or 20.  I just hope Stansberry didn’t lay viruses in my computer.

A few people made boatloads of money from predicting the 2008 crash… Stansberry couldn’t have been one of them or they’d not have to spend time producing such want.

» on 02.27.11 @ 07:53 PM

How’s that 401k going big boy.  That pension secure?  How’s your house value?  Gas less expensive than a year ago?  I suppose your grocery shopping experience has shown a decrease in the costs?  Oh wait, you are on food stamps right?  No problem on your reaction.  MJ is a brilliant trader and believe me when I say that he and I really don’t care a whit about your lot in life.  No, I doubt that you didn’t even make it through two years of the California collegiate system let alone Wharton, like MJ, and beyond the sales portion at the end of his presentation; I challenge you to tell me EXACTLY where he is off base.  Do you even understand the privileged position that the US dollar has occupied for the past 60 years?  Do you even understand the recent position statements that China and Russia have made on the US dollar?  Do you even know what it means when the IMF is beginning to transition out of the US dollar?  I think not.  As for the MRE diatribe, which I suppose you are trying to use to say that the broad base economic prediction recently stated by no fewer than all of the United States trading partners is somehow be it.  Personally I look at monetary values as an opportunity.  You look at it from a two dimensional view and that is why you will always be working for someone else and at the mercy of others.  Here’s a hint on MJ, he was a top financial analyst for Accenture and prior to that he contracted with the New York Fed.  Now step up, grab your small p/cajones – if you have any, and tell me EXACTLY where his analysis is off.  Tell me. Com’on boy. Tell me.

» on 02.28.11 @ 09:40 AM

Stansberry presents no numbers in the first 10 or so slides, just cheesy animation. 

Hey maybe Stansberry is right, but if they choose to communicate like a 5-year-old, I’m not going to waste my time on them.  That is my exact criticism… they communicate like infants, and if they were so smart and predicted the 2008 crash, they’d be kicking back on the French Riviera, like Andrew Lahde and others.

The disparity between their pathetic childish animation and your caustic remarks, Daniel, is funny.

Doomsday predictions have been around.  I like Buffett in his latest letter:

``Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.

The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.’‘

» on 02.28.11 @ 11:50 AM

OMG! Small p you really are sad. As Dan said it’s a sales piece yes but it describes a current financial situation and uses that environment to sell a service. So What! The presentation does describe what is going on with the US dollar. I looked at it and then did my own research and this guy IS describing what is going on.  Plus Petry did list actual statistics - you have never disputed those.  But since you have not disputed them with exact figures but still attacking the messengers then I can only believe that your brain is so rigid that you are hopeless.  When I read your lame attacks I’m reminded of the old joke.

“In the hospital the relatives gathered in the waiting room, where a family member lay gravely ill. Finally, the doctor came in looking tired and somber.  ‘I’m afraid I’m the bearer of bad news,’ he said as he surveyed the worried faces. ‘The only hope left for your loved one at this time is a brain transplant. It’s an experimental procedure, very risky, but it is the only hope. Insurance will cover the procedure, but you will have to pay for the brain.’

The family members sat silent as they absorbed the news. After a time, someone asked, ‘How much will a brain cost?’

The doctor quickly responded, ‘$5,000 for a Leftist’s brain; $200 for a Conservative’s brain.’

The moment turned awkward. Some of the Leftists actually had to ‘try’ to not smile, avoiding eye contact with the Conservatives. A man unable to control his curiosity, finally blurted out the question everyone wanted to ask, ‘Why is the Leftists brain so much more than a Conservatives brain?’

The doctor smiled at the childish innocence and explained to the entire group, ‘It’s just standard pricing procedure. We have to price the Conservatives brains a lot lower because they’ve been used.’

» on 02.28.11 @ 12:22 PM

P, just because you are paranoid doesn’t mean someone isn’t out to get you. Yes there are many doomsday scenarios, but the one we are on we have been working for 50 years now and it’s really hard not to see we are in a train wreck, of our own making, and we need clear and concise action to halt it if possible.

Guys, we are really over examining this issue to our detriment. The problem we have today started 4 decades and 9 presidents ago. It is no more Obama’s fault than it is Bush’s or Clinton’s. All 9 presidents are culpable, some more than others but all share the blame right along with the rest of us. Pointing our fingers and blaming solves nothing. Recognizing the real problem is paramount.

Look, its true government spends too much for the revenue it takes in. It is even true some enterprises are not taxed enough while other ones to much. Yes, some forms of economics are better at somethings than others. But really people none of that matter until we wrestle with the 9000 pound gorilla in the room and no I don’t mean entitlements.

We as a sovereign economy consume more wealth than we make, period. It doesn’t matter what political side you are on, what religion you believe in or what sex you are. It doesn’t matter who lied, who spent, who did good, who have more change in their pocket or who is on the dole. We, as a collective society, spend more than we earn.  Two important economic indicators are readily available to measure our net wealth generation versus our net wealth consumption and those two are our public and private combined debt and our trade balance.

I don’t care what the voodoo economist say about deficits, debt and trade they only serve their masters and they lie like a rug. You simply cannot run up a trade deficit and still live like you are running a surplus. The result is debt and lots of it and that people is where we are today.
You can argue all day long about how to balance the budget all the while your factories and refineries rust to the ground. Coddling the gambling institutions formerly known as banks does not solve the problem either. Money made on investments or speculation still depends on someone somewhere actually doing something that is making added value or did our Wall Street pimps forget that?

The point is we need to fix the engine of wealth generation, that is the three things that actually produce more wealth than they consume, resource extraction (mineral and fuel), agriculture (food or fuel and fiber) and manufacturing (labor, materials and IP). All three of these sectors have one thing in common, they all produce more value than they consume.

The fix is really easy, adjust trade law, eliminate politically derived regulations and put your investment capital into things that have tangible returns for our economy as well as your portfolio. But more than anything look at where the money flows right now. It’s off shore P not here. We have 22 trillion dollars waiting offshore to invest in a 22 trillion dollar economy. So why is it not coming here? Certainly it’s not because we are not regulated enough or taxed enough is it?

» on 02.28.11 @ 01:35 PM

The doomsday predictions are a bit apocalyptic but that doesn’t mean they are totally nonsensical.  Stansberry has some good points but I don’t believe his scenario is preordained.  If we keep doing what we have been doing then I would say it more likely to occur.  What happens ultimately is still within our control at this point but it requires action on our part to change the trajectory we are currently on.

That trajectory is not good.  If we don’t get spending under control and get our budget on a long term sustainable path then we are in deep trouble.  This is a solvable problem but as the events in Wisconsin clearly show, there are entrenched interests who like the status quo and have their heads firmly implanted up their backsides. 

Dan is correct that having the worlds reserve currency is a huge advantage to our country and we should not let that go without a fight.  Buffet is correct that investment follows opportunity, but we are creating a situation where we are chasing opportunities out of our country.  If we show the world (bond market) that we are serious about getting our fiscal house in order and show a long term path to fiscal rectitude the market will continue to loan us money and we can work ourselves out of this mess.  If not, then Stansberry is probably more right than wrong.

Its our choice at this point.

» on 02.28.11 @ 08:47 PM

No doubt lots of folks are out to get the US, but I have faith that we have bigger meaner and more innovative capitalists than all the rest.  Do you really think the centrally-managed economy of China is going to win in the long run?  I don’t.  If you think so and have true fear of China, I’ve got a little red book for you to read and take to heart…

Maybe our Fiat Money will collapse like all the rest before it.  Maybe not.  Too hard for me to tell.

I think the great powers always exploit somebody else to get them to destroy their environment and work their population into early death to transfer their wealth to the great power.  Britain did it.  Maybe we in the US are still doing it… China’s environment is pretty sad, as is India’s.

Probably it is good that the $ is the world’s reserve currency.  Hard to believe the Euro (with all its gyrations in Greece, Ireland, Italy, Spain, Belgium, etc) is any better.  Or the Yuan… just really hard to believe.

We keep the dollar low to stimulate our exports.  And we all benefit from that.  Been that way for all my adult life, BTW.  The hoot is that we criticize China for doing the same thing, which they learned from us.

» on 02.28.11 @ 09:10 PM

Ya miss the point P. I just listened to the Stansberry video and as long winded as it was it did back up everything I been screaming about the last two years here. No I have not been screaming about currencies, but the CAUSE of the current situation, namely consuming more than we make. Yes P we could turn this around very quickly and end up with a mild inflation, but the solution is not Obama printing money and throwing worthless currency at the problem. It is not a tax problem, not a spending problem or a political one, it’s simply a matter of producing what you consume people. Imports must drop considerably. We must reduce taxes on industry and reduce the regulation that strangles it. Once we take those steps and show the world that we are willing to work for our goods and services rather than borrow for them the $22 trillion in offshore investments will come back. Investors want to invest here but right now the economic policies of the current administration (as well as the last 9) have everyone around the world saying “WTF America? You are the largest manufacturer in the world and the biggest debtor, why on earth would you be selling off your industrial base, thus killing your chance to pay down debt?” Honestly, it’s time to stop this madness. The free ride is over. And all that investment wealth Stansberry says you’ll make is worthless at a cow pie if no one is producing anything anywhere. Who cares if you double your money in a year if your are starving to death and no one is growing food anymore.

» on 02.28.11 @ 10:52 PM


I too believe the American entrepreneur is strong but I can tell you first hand it is getting harder and harder to start and operate a company here in the US and CA in particular.  Capital is harder to raise and the regulatory, legal and tax environment stinks.  All self-inflicted wounds inflicted by our government at all levels and their policies. 

No country has ever devalued their currency as a way to prosperity just as no country has taxed and spent and borrowed their way to prosperity.  Unfortunately we are doing all of the above at the same time.  Buying our own debt and issuing tons of new money is not going to end well, it never has anywhere, ever.  Sooner or later the bill for this fiscal profligacy and irresponsible monetary policy will come due.  We’ve gotten away with more than we should only because we are the reserve currency but the rest of the world is tired of us exporting inflation to them.  If we don’t change course soon and convincingly I believe we are in for a very rude awakening.

As far as China goes, I tend to agree that is a giant house of cards on a number of levels but mostly because free markets and private property don’t coexist well with totalitarian regimes and heavy central control.  The only way I think they overtake us is if we commit suicide, which I believe we pretty much are on our current path.  As I stated before, this is all in our power to control at this point but time is running out, we can’t defy economic reality forever.

» on 03.01.11 @ 08:44 AM

Hard to tell if we consume more than we produce just because we successfully exploit China, India, etc or if we are really headed for meltdown.

Or course the world’s countries regularly overpromised and then devalued their currencies to pay off debt holders in now-worthless $... read `This Time is Different’.  Maybe we are on that road now too, but Ireland, Italy, Greece, Portugal, Belgium, the UK, etc will get their first, if that is the future.

And maybe we can all agree that paying off public pensioners with more worthless $ might be the only way out of that mess.  The other component, and maybe we can all agree on that, is for the Stock Market to legitimately get back on track… of course I agree we’ve sent our manufacturing to India and China etc unwisely.  I agree that the environmental regs in California are over the top, although I’m not on board with reducing them to the level of China or India.

California’s bidness taxes aren’t that bad… lots of tax credits and Prop 13 help…

Although, frankly, I’d prefer to end Prop 13 *on business, not homeowners* so new businesses don’t get wacked in favor of old businesses that retain their low assessments.

Europe rooted for a mess during a Civil War, because `by the people’ offended them… they were for the divine rights of sovereigns and other privileged few, like, Mubarak and Qadaffi today.  The US is messy but I sure hope we figure out our way through this.

» on 03.01.11 @ 11:41 AM

“California’s bidness taxes aren’t that bad… lots of tax credits and Prop 13 help…!?  Beyond the fact that that is one of the most ignorant statements made, it’s obvious you have never started or run any business let alone understand the regulatory marketplace. Just another Obama clone.

» on 03.01.11 @ 01:59 PM

From the LA Times article linked above and at…

``California takes about 4.7% of what a business produces in taxes — which happens to be the national average. The government take is higher in Alaska (13.8%), New York (5.5%) and Florida (5.3%). Even Texas, known for rolling out the red carpet for business, pocketed more than California — 4.9%.

That’s according to an annual study of the tax burdens in all 50 states by the Council on State Taxation, a business-friendly group led by senior executives of Chevron Corp., General Electric Co. and other major corporations.

“California is pretty middle-of-the-pack when it comes to business taxes,” said Joseph R. Crosby, the organization’s senior director of policy.

Although the state’s corporate income tax rate — 8.84% — is among the higher in the nation, its bite is diminished by various tax credits and other measures that have been adopted over the years, including:

• One of the most generous research-and-development tax credits in the nation, allowing businesses to deduct 15% of the amount they increase their R&D funding over a base level. The national median is 6.5%, according to Yonghong Wu of the University of Illinois at Chicago.

• Proposition 13, the 1978 initiative that limits property tax increases to 1% a year until properties are sold, when they are reassessed at the market value. This has slowly shifted the property tax burden from businesses to homeowners, since commercial real estate changes hands less often than residential.’‘

Enjoy Alaska, Daniel.

» on 03.01.11 @ 02:19 PM


CA business environment is about the worst in the country, its ranked like 48 out of 50.  We are hemorrhaging business to other states and countries.  We basically have become an economic development agency for Texas, Florida, Nevada, etc. who find it easy to entice our companies to move because of the significantly reduced cost of doing business and friendlier regulatory environment.  Don’t kid yourself, we are shooting ourselves in the foot. 

This last census (2010) was the first time since CA became a state that we did not pick up any Congressional seats and we were lucky not to lose one.  Texas picked up 4 seats because people and businesses are moving there in droves.  Its not for the weather, trust me.

» on 03.01.11 @ 02:38 PM


One other thing regarding your comments on prop 13.  Raising commercial property taxes will just be passed along to us.  Businesses don’t really pay taxes because they get all of their money from their customers.  These increased property taxes will just be passed along to us in increased costs of the products and service we buy.  Ultimately the consumer at the end of the line pays all the costs.

Why is the answer always raising taxes with you guys?  We have about the highest income and sales taxes in the nation.  You think we have problems retaining businesses in CA now, just raise their taxes even more and watch what happens.  Secondly, if you think the real estate market is bad now, start screwing with prop 13 and watch what happens.  Drive around Goleta and look at all the vacant commercial properties, the commercial real estate market is sucking wind, raising their property taxes won’t help.  If they go after the commercial side it won’t be long until they come after the residential side as well.

» on 03.01.11 @ 02:40 PM

Do you own a business?

» on 03.01.11 @ 03:04 PM

I guess that is why the Facebook guys moved from Boston to Palo Alto… to enjoy California’s rotten business climate.

Texas is getting its turn now with deficits.  But if you want to move there, by all means go, and don’t let the door bruise your bum on the way out.  Walk the walk, don’t talk the talk.

I have a fair amount of experience with the local and State EIR process.  It is atrocious and needs reform, particularly in the Coastal Zone.

» on 03.01.11 @ 03:20 PM

Yes and no… for example in rental property, the market sets rents.  Long time owners who have lower tax assessments simply get more profit than new owners, due to Prop. 13.

I’m happy to keep commercial property tax income to the state constant, by raising the assessment on long term commercial owners and lowering it for new owners.

Not at all good bidness to charge new businesses a higher property tax… maybe all the displacements to Texas are due to that.  Similarly, older business in California get a subsidy.

» on 03.01.11 @ 05:28 PM


Where is facebook, and google for that matter, putting their data centers?  Its not CA.  As for taxes, google moved their main servers to Ireland, why?  Because they have a business tax of less than 15% vs. 35% in the US +9% in CA.  Let’s see, 15% tax vs. 44% tax, gee, where should we go?

Almost nobody is building capacity in CA.  Intel and other semi companies always put new fab capacity anywhere but CA, they’ve come out and said as much.  CA has had some natural advantages in the tech area but that isn’t guaranteed and we are at risk of turning ourselves into a bunch of R&D outfits here and all the value added, profit generating parts of the companies located elsewhere.  We are making ourselves less competitive than we should be, I don’t think that is even arguable.  We wouldn’t have so many companies leaving the state otherwise.

» on 03.01.11 @ 06:42 PM

Here is a piece from the WSJ today about the dollar and the challenges it faces remaining the world’s reserve currency:

» on 03.01.11 @ 07:20 PM

Comments from the CEO of 3M.  Not CA specific, more about the US regulatory and business environment overall.  Keep in mind CA is at the bottom of the US pack:

» on 03.02.11 @ 01:38 PM

Sure, I’d like the $ to continue being the reserve currency, but that is not something that is in the US constitution… if a smart Thai businessman wants to run his business in Euros, well, he is free to do so.  But Europe has turned out to be little better than the US in managing its debt.

Who is good?  The 3M guy suggests Mexico and Canada.  I burst out laughing.  Businesses would rather move to Canada where the devil runs socialized medicine?  Or Mexico where the drug bosses will kidnap your daughter for ransome?

» on 03.02.11 @ 02:55 PM


Laugh if you will but ignoring warnings from a fortune 100 ceo about the US business climate seems foolish to me.  He’s hardly alone in his views.  Canada has much lower corporate taxes and much more friendly business climate and they actively recruit companies to move up there.  It it wasn’t so cold I suspect more would go.  Its an easy calculation, just like google moving their profit center to Ireland. 

You seem to revel in whistling past the graveyard when there is more than ample evidence that we are willfully putting ourselves at a competitive disadvantage.  Making excuses for our current situation and making fun of and dismissing competitors is the stuff of losers, not winners.  I believe Americans are winners but we need to be honest with ourselves and acknowledge where we need improvements—and we need many.  You seem unable to do that.

» on 03.02.11 @ 03:19 PM

Let’s look at how much damage this inexperienced boy has done to this nation.

The first figure is from January 2009 when the Dear Leader took power; the second number is today, the third number is the hope and change – and yes that means change we can believe in less the hope.  Sterling leadership from such an experienced crew of angry idiots. Who, like p, have never run a business.

Avg. retail price/gallon gas in U.S.$1.83 $3.104   +69.6%

Gold: $853.25 $1,369.50 +60.5%2

Corn:  $3.56   $6.33   +78.1%  (I’m sure everyone loves their participation in starving the rest of the world in our ignorant quest for the God Green and our contribution to an over subsidized and useless technology)

Soybeans:  $9.66 $13.75   +42.3%

Sugar:  $13.37   $35.39 +164.7%  (I’m sure My Belle Michelle is happy about this)

Unemployment rate:  7.6%  9.4%  +23.7%

Number of unemployed:  11,616,000   14,485,000   +24.7%

Number of fed. employees, not including military:  2,779,000   2,840,000   +2.2%

Real median household income:  $50,112   $49,777   -0.7%4 (good job boys)

Number of food stamp recipients:  31,983,716   43,200,878   +35.1%  (you have to love the progs compassion…more the merrier eh boys?)

Number of unemployment benefit recipients:  7,526,598   9,193,838   +22.2%6 (more slaves for the party, right?)

Number of long-term unemployed:  2,600,000   6,400,000   +146.2% 

Poverty rate for individuals:  13.2%  14.3%  +8.3%  (don’t worry folks Nanny will take care of you)

People in poverty in U.S.:  39,800,000   43,600,000   +9.5%

U.S. rank in Economic Freedom World Rankings:  5th   9th – God isn’t socialism great?  Wait, can I mention God or will the Birkenstock’s send me to the Gulag?

U.S. M1 money supply in billions:  1,575.1   1,865.7   +18.4%  (“gee Mr. Rodgers does that mean that since the dollar is worth less that items cost more?”  Yes Johnny.  But remember that the young man running around telling us what to eat as he chokes down ribs, and tells you to ride in the back of the bus, says that there is no inflation.  “Wow Mr. Rodgers that kinda sounds like that dude in Iraq they called Baghdad Bob”  Your right Johnny but in this case the Baghdad Bob is an American of diminished capacity.

National debt in trillions:  $10.627   $14.052   +32.2

And, of course, that brilliant budget submitted by this idiot adds another 9 trillion to the debt…wow a true genius.

» on 03.02.11 @ 04:43 PM

Our fearless Congresswoman pipes up:

» on 03.02.11 @ 05:37 PM

Well, there is no moderation in the totally one-note comments of the business community.  For them the US is always utterly business unfriendly and run by communists.

When they start saying Canada is better, which is far more socialist than the US, I can’t take the comments seriously.

When they start saying Mexico is better, with its crony capitalism by the ruling families and its unending corruption, I cannot take the comments seriously.

And when California business leaders (see the quote from the LA Times above) say outright that California business taxes are middle-of-the-road for the US, I got to start wondering….

Well, in my opinion it is the California income tax that is too high, and California property taxes for new businesses are too high.

I also have experienced first-hand SB County Bureaucracy for land use planning.  It is a mess.  But I’ve gradually realized that it is a mess that a lot of County residents want to be a mess.  How do you solve that?

One persons bureaucratic nightmare from over-regulation is another’s confidence that a monstrosity won’t be built next door.  One businesses over-regulation might mean preventing 10 deaths from e-coli in spinach.

In my business experiences, clarity and predictability are what I want.  If I know my building needs 8 on-site parking places I can live with it.  When one county person says 4 and other says 20 and I develop plans for 10 and then have to fund a new traffic study for 15 which gets ignored and in the end the building down the street gets by with 9 .... 

Daniel you know well that a statistical case can be made slamming Reagan, Clinton, Bushes, etc.  Obama has made only strong attempt to control future Medicare costs; Bush didn’t even try.  Maybe Obama got it wrong, but at least he doesn’t cynically triangulate like McConnell and Boehner.

» on 03.02.11 @ 06:07 PM

That’s it? That’s all you have?  Statistical case? For what? Supporting an ignorant politician who is supported by the uneducated?  You’re wasting my time. Ciao.

» on 03.02.11 @ 06:24 PM


Canada is more socialist than the US, so is Ireland.  So what?  They put the costs of their socialism on their citizens with high taxes, not on the businesses.  They seem to understand that without a healthy business environment they can’t fund their social programs.  From a business perspective it is cheaper and easier to operate there.  Lots of businesses operate manufacturing plants, successfully, in Mexico and have for years.  Like I said before, dismissing and ridiculing competitors doesn’t change the fact they are competing for business.  I remember when people used to make fun of Japanese cars in the 60’s and 70’s, they don’t anymore.

The county is a mess.  In fact, that is being kind.  Aside from the obvious incompetence, my experiences with the county for land use issues leave me with the taste that it is more of an extortion racket than anything else.

Obama dealt with Medicare costs?  How?  ObamaCare is going to drive our costs up, it already is.  The bogus $500B in phantom “cuts” in Medicare are not going to happen, they already folded on that with the “Doc Fix”

To get back to the point of the original article we have been discussing, we are not on a good path on any number of fronts and the trends are not good, that is our concern.  Our fiscal situation is a mess, entitlements are a train wreck, Obama has been a profound disappointment and is making things worse, our Congresswoman is clueless and we are shooting ourselves in the foot repeatedly.  There is almost nothing good happening in a macro sense.

» on 03.02.11 @ 07:38 PM

Well, China has stolen way more manufacturing from the US than any other country… guess the US business community loves the politics there. 

Well, as far as I can tell, Canada’s Federal income taxes on individuals are lower than those in the US… top bracket there of 29%, not 33% like in the US.  Income taxes at the low end look about the same.

But if business people feel Canada has a more economical medical care system, I wish they’d make that plane.

On Obama and Medicare…  David Brooks,  December 17 New York Times:

``The third reason to support the bill is that the authors have thrown in a million little ideas in an effort to reduce health care inflation. The fact is, nobody knows how to reduce cost growth within the current system. The authors of this bill are willing to try anything. You might even call this a Burkean approach. They are not fundamentally disrupting the status quo, but they are experimenting with dozens of gradual programs that might bend the cost curve.

If you’ve ever heard about it, it’s in there — improved insurance exchanges, payment innovations, an independent commission to cap Medicare payment rates, an innovation center, comparative effectiveness research. There’s at least a pilot program for every promising idea.’‘

GWBush didn’t even try… if I recall, he pushed for a big new entitlement.

But maybe business interests in the US could clamor for a Canadian style healthcare system instead of moving their companies to Canada.

Daniel, who raised the FICA contributions from self employed from 9.3% to 15%?  Ronald Reagan, that great tax-cutter….

» on 03.02.11 @ 11:09 PM

Don’t blame business for seeking the lowest cost production options, they have no choice.  If their cost to produce is higher than their competitors you go out of business, but you know that.  Don’t blame China (or Texas for that matter) for taking advantage of an opportunity created by our making it more expensive to do business here than it has to be.  We are pricing ourselves out of business in many ways.

Canada has other taxes that raise their overall individual tax burden to a higher level than here.  Sales taxes, property, etc. give the average Canadian a tax rate of about 45%, about 15% higher than here.  As far as the health care goes, large numbers of Canadians purchase US health insurance and go to the US for care or pay out of their pockets because of the wait times and unavailability of some advanced care.  They don’t do that because the system is so great.  If 90% of Canadians didn’t live within driving distance to the US their system would collapse.  Why do you think the Mayo Clinic started in Minnesota?

Don’t get me started on Brooks, he’s schizophrenic in his views.  The guy is all over the map.  Obama’s Medicare changes do nothing but shift cost to the private sector.  They did not deal at all with the core problems in the system.  The innovations you speak of are called rationing in real life. 

Bush should never have pushed the prescription drug benefit, that was a huge mistake that I opposed, we can’t afford any more “entitlements”.  At least Bush tried to do something about Social Security but was demagogued to death.

Now, about Reagan and the tax increase.  He said himself the 1986 tax deal he made with the Democrats was the biggest mistake of his Presidency.  The deal was to cut $2 of spending for every $1 of tax increase.  We got the $1 of tax increase but no cuts in spending, in fact we got more spending.  The part of the tax package dealing with Social Security was “fix” the program as it was heading towards insolvency at the time.  It bought us a few years but we are once again steaming towards insolvency.

» on 03.03.11 @ 05:28 PM

Texas has 4.9% business taxes, compared with 4.7% in California.

Sure, if they need to chain 10-year-olds to their sewing machines for 20 hours a day to stay competitive, US business folks won’t bat an eyelid.

The US is hardly a high tax place, way lower than Canada, but of course higher than Mexico (prior to the bribes you must pay there):

0.1% of Canadians travel to the US for health care…

Sure Brooks is not ideological.  That makes him worth listening too.

But the Bush SS was to turn the system over to Lehman Bros, Goldman Sachs, etc.  I guess we’ve seen from the collapse of 2008 how good an idea that was.  Had it been Vanguard… now index funds might make sense.  But rewarding Hank Paulson’s buddies so they can hold the SS $ hostage for $10 million bonuses didn’t seem smart to me.

Reagan raised self-employed FICA taxes in 1984, not 1986…

» on 03.03.11 @ 07:17 PM

One other point… since when was rationing of medical care in America a surprise.  Happens 1,000 times per day already.  It is just that right now it is done for profit by UnitedHealth, Anthem Blue Cross, etc.  Americans just like somebody making money by rationing their healthcare… they hate rumpled run down government bureaucrats rationing it.

If everyone just exercised and ate right, well, that would save billions in the long run.  But everyone just complains of the Nanny state in the US if government points this out.

» on 03.03.11 @ 07:20 PM

Nice try p.  You might want to check your sources.  CA corporate income tax rate is 8.84% for non-financial companies; it is over 10% for financial institutions and banks.  Texas has a 0% corporate income tax rate.  They have a gross receipts tax that ranges between 0.558% to 1.997%.

As far as Mexico goes, US companies, by US law, cannot bribe foreigners for business.  Just last year or so some IBM guys got sent to jail for bribing Argentinean officials.  That is simply not a practice American businesses engage in.

I made it clear that Canada had much higher individual taxes than the US, I glad you agree.  I was pointing out that their corporate taxes are much lower.  If you are a company looking to move, you care mostly about the corporate rates.  The Canadians already live there and are already paying their confiscatory taxes, it’s not your problem.

As far as the Canadian HC system.  The website you referenced is a well known supporter of a single payer system and this piece is over 10 years old.  Everything addressing this subject directly comes from the same author (Katz) and the same study. It is a single aged source.  Here are a few contradicting examples for you to peruse:
Here is an example of a company selling US insurance to Canadians, obviously there is a market for it:

Newfoundland’s Premier travels to US for HC:

Analysis of Canadian Single Payer HC:

“According to the Canadian government’s own statistics, 1.2 million Canadians are actively looking for a family doctor but can’t find one”:

I could continue, there is tons of stuff and studies out there.  Bottom line, if you’re sick you want to be here, not in Canada.  Hopefully you will concede that basic fact.

Bush’s plan was not to give the money to Goldman Sachs, good grief.  Where do you get this stuff?  He proposed taking a portion of the payroll taxes, about 2.5% or so I believe, and putting them in named accounts you would own of safe investments like bonds and large caps.  This was voluntary by the way, if you wanted to stay in the old system you could.  The system now is totally unsustainable, the longer we wait to significantly reform it the harder it will be. 

1984 or 1986 is immaterial.  The social security system was headed for the rocks at that point, just like it is again.

» on 03.03.11 @ 08:01 PM


All products are rationed because there is not an infinite supply of anything.  In a free market they are rationed by price.  Ruth’s Cris costs more than McDonalds.  BMW’s cost more than Kia’s.   

Health care is also a product.  The question is do we want the government making the rationing decisions or the market.  You can always get another insurance company, you can’t get another federal govt. 

Personally, I’d rather not have the same people who bring us the DMV and IRS making my health care decisions.

The free market gives us lots of choice at a variety of price points, if you let it.

» on 03.04.11 @ 08:11 PM

Well, W, on the issue of California’s business tax situation, first review the article I linked long ago… businesses pay a lot more types of taxes than just income taxes, and even business income tax is subject to lots of deductions, so quoting the top or overall business income tax rate is not nearly the whole story:

You might criticize the LA Times as a bunch of Maoists.  Then go right to the source, the Council on State Taxation at:

which is run by… “a business-friendly group led by senior executives of Chevron Corp., General Electric Co. and other major corporations”

Look at the report

03/30/2010   FY09 Business Tax Burden Study

You’ll find that the total business tax burden (relative go Gross State Product) on Table 6 of Page 12 is… 4.7% for CA and 4.9% for Texas.

Why?  Look at Table A-3 on Page 24.  You’ll see that Texas has way higher property tax (42.6% of total business tax burden) compared to California (24.3% of total business tax burden).  Yes, that table shows that Texas has 0% business tax burden in income tax, compared to 15.9% of total in California.

What Texas gives up in business income tax, Texas more than takes back in business property tax.

Much more interesting is Table 4 on Page 7.  This takes into account not just taxes paid, but benefits for business that those taxes get back from the state and local governments.  If benefits from education are neglected…. then in California businesses pay $2.70 for every $1 of useful government service rendered back to business.  In Texas… businesses pay $5.10 for every $1 of useful government service.

If you want to value 50% of education costs as beneficial to business, than in California, businesses pay $1.00 for every $1 needed government service… in Texas, businesses pay $1.40 for every $1 needed government service.

Wow, California is a *way* better business environment than Texas, according to a pro-business group.

Of course, that whole study misses the fact that new business pay way more in property tax than old businesses in California.  Fixing that part of Prop. 13 (keep overall business property tax level) would help new business *a lot* in CA.

» on 03.04.11 @ 09:12 PM

Wireless you are beating your well educated brain against a wall. Why? I think I know the answer but I have to go. I’m in transit and the 101 is at a crawl since thousands of businesses are fighting to get into the state. Wow! Who knew that small p was such a business genius!  I can visualize him as Obama’s spokeman in front of the cameras saying inflation smation…what inflation? There is no inflation. Why I’m telling you that the American economy is better now than in the past 230 years. In fact We have in our nation a state that is the perfect example of the kind of business environment that we want the rest of you states to follow… the lovely and mgnificent state CALIFORNIA!

» on 03.05.11 @ 12:11 AM

On the health care rationing… in the US, we don’t have a competitive, capitalistic medical care… I’d love that!

We have a quiltwork of little monopolies…  like Cottage’s here in Santa Barbara, where Cottage has a 2999% markup…

The situation resembles that of local utilities in about 1910.  We solved that, sadly, with government intervention… the PUC in CA.  Inevitably we are headed that way, due to the local monopolies and their strength.

» on 03.05.11 @ 12:22 PM


You seem to want to try and make excuses for CA, Canadian health care, etc. and pretend everything is just great.  If you want to believe everything is so great, go ahead but lets look at some basic trends.

Texas picked up 4 Congressional seats, CA zero.
Texas unemployment rate 8%, CA >12%
Business relocating to TX, Businesses leaving CA
TX creating jobs for over a year, CA not
U-Haul will practically pay you to take a trailer to CA, it costs a ton to get them out of state.  That tells you as much as anything.

I could go on, the trends are quite clear and obvious.  CA is in decline and Texas is on the ascent.  It is a self-inflicted wound on our part, it doesn’t have to be like this but we here in CA seem hell bent on killing the goose that lays the golden egg.  With the weather, natural beauty and other advantages we have here there is no excuse for being a laggard like we are now.

Like I said before, you seem to revel in whistling past the graveyard.

» on 03.05.11 @ 12:33 PM


I think publius just enjoys being a contrarian.  I could argue the earth is round and p would find some online article saying its really flat. 

BTW, I just noticed in the paper this morning that our unemployment rate in SB county just went up…..  Yep, CA is doing great!  Businesses are just flocking here in droves!

Re, heath care.  The main reason our health care system is having issues is due to government policy.  The government has totally distorted the system and created the “monopolies” you whine about.  Get them out of our health care and you will see it behave like a normal market.  They are the ones who prevent competition.

» on 03.07.11 @ 12:15 PM

Well, I’m more convinced by well thought out and researched arguments than a few random facts.  I think COST, run by executives of GE, Sprint, Coca Cola, etc, can be trusted on assessing California’s business tax environment, and they find that overall business taxes are lower in California than in Texas.

Simply pointing to the business income tax without including its deductions and also omitting property taxes, excise taxes, sales taxes, etc is really biased and merely a random fact.

I think it is more likely… although I can’t prove it… that if business people don’t like the governor or the legislature they will claim… without facts… that a `bad business environment’ exists.

Now the fact is that the wall street bankers own the Democrats at the national level.  That is proven by the donation records.  They own the Republicans too.

And I agree that our health care system is totally messed up by the intervention of government.  But back in the free market era (1800’s) lots of charlatans in medicine shows.  Today the big drug companies peddle expensive cures right to doctors… an excess of the `free market’.

But it is also excessive to view all government involvement in medical care as evil.  The government does not make Cottage Hospital mark up their drugs by 2999%, Cottage does that for its free-market owners.

With respect to Canada, as far as the articles linked by Wireless indicate, it is true that 0.1 % of the Canadian population comes to the US for care, about 40,000 people per year.  That may seem like a lot of people, but the total population of Canada is 33,000,000 or so.  So i have a hard time accepting 0.1% usage of US medical care as an indication that Canadian medical care is poor.

The US medical care system caters to the wealthy, so it is no surprise that high-level Canadian politicians come here to use it (another Wireless link).

On the other hand, the estimates for usage of the Canadian (and Korean, French, Indian) medical care systems by US citizens soar to 1,000,000 or so.  That is worth pondering.

» on 03.07.11 @ 01:22 PM


If you want to delude yourself into thinking CA business climate is just fine go ahead, you seem to have a genetic inability to see the obvious.  But many others are voting with their feet.  Almost no businesses are relocating or expanding in CA and plenty are leaving and expanding elsewhere.  That isn’t even arguable.  I guess they just all hate Jerry Brown and are leaving just to spite him.

Your right, Canadian health care is just wonderful and socialized medicine everywhere is better than the US where we just care about rich people and evil profits and pushing fancy drugs people don’t really need.  In publiusworld and LoisWorld everything will be fine if we just give the government more authority and money to manage our lives.  Just don’t pay any attention to the financial cliff rapidly approaching.

Here’s a little ObamaCare scorecard on its one year anniversery:

» on 03.07.11 @ 04:51 PM

C’mon Wireless, you can be more logical than that.  You know COST (run by business executives) has found that overall business taxes in California are lower than in Texas, mainly because Texas has high property taxes.

So you need to complete the sentence… `The business environment is better in Texas than in California because _______________’.

We know the blank should not be filled `business taxes are lower,’ because of the COST studies.

We also know the blank should not be filled with `in Texas businesses get more for the taxes they do pay.’.... the COST study.

Facebook did not go to Texas to start up, but that is one example and a bit of a random true fact.  Silicon Valley in California is a hotbed of business creation.  Even round here we have Citrix, a relatively recent startup.  But if you want to argue that fewer businesses are starting up in California than in Texas, quit wanking with U-haul stats and get the statistics on business startups in both states.  Unless you do that you are merely a source of noise.

Now for sure we have higher unemployment in California, and that does suggest businesses are having a hard time in California (not due to taxes, however).  Two reasons that I do believe for our higher unemployment: 1)Texas has more of the oil/energy industry… 10 or so years ago that really hurt Texas, BTW, when there was a global energy glut, but lately, with high energy prices, Texas gets an advantage.  2)California had more of the real estate bubble.  Now I do believe the real estate bubble was not business but swindling, so, frankly, advantage to Texas again.

On the other hand, I’d rather live in California because the climate, mountains, beaches, etc are way, way better than Texas.  That does tend to explain why our housing prices are higher, and why we had the bubble.

But the blank might well have `California is over regulated’.  Maybe so.  But if so, get specific and say where to reduce the regulation.  I think County planning is messy myself, and I would make that office predictable and reliable.  But I know my friends in Montecito love County planning to be unpredictable and unreliable so potential builders give up, and they keep more open space around them.

On medical care, sure, it is a mess.  But why does Cottage mark up antibiotics by 2999%?  Makes no sense to me.  I quite donating to Cottage when I learned that, and I hope more people do so.  I do believe the serious studies that indicate we get 1/2 the healthcare for 2X the cost, compared with other civilized countries.  Maybe Obama’s health bill will make that worse, maybe it will make it better.  The Medical industries lobbyists own everybody in the US, Democrats and Republicans.  I do know a fair number of people who’ve gone offshore for major medical care.

» on 03.07.11 @ 05:00 PM

Oh My God!! small p, go get a job..or start a business. You obviously have tons of time on your hands.  Good grief man get a bloody life.

» on 03.07.11 @ 05:30 PM

Daniel Petry, still commenting?  Thought you were out of here and living in Texas.

» on 03.07.11 @ 05:54 PM

Get a job son. Try to have a life with some value. Good luck.

» on 03.08.11 @ 02:08 AM


You obviously have too much time on your hands.  I’ve addressed most of this stuff previously but CA problems aren’t just taxes.  They are taxes, fees, regulations, high cost of living, generally unfriendly business climate, etc.  Bottom line is the real test of where people prefer to do business.  CA is ranked 48 or 49 out of 50 for business climate.  Google it yourself.  I’ve already addressed Facebook, google, etc.  They might start here but they and others tend expand elsewhere where it is cheaper and easier to do business.  That trend is consistent across many industries.  If you want to convince yourself that CA is just a hunky dory place to do business go ahead, but you are ignoring facts to do so.  Here is one link I found in 3 seconds, there are many more:

Hospitals and Doctors frequently charge ridiculous amounts for services or drugs because of cost shifting, mostly caused by Medicare/Medicaid under-reimbursing them and trying to cover uncompensated care which is mandated by law they provide.  Again, its caused by the government.  They created this mess and the more they try and control it the worse it is going to get. 


» on 03.08.11 @ 05:01 PM

W, again you offer lots of noise, but nothing systematic and solid.  If the bottom line is where people choose to do business, then read this study…

between 1992 and 2006, California lost a net of 9,000 jobs a year (gained 16,000 a year, lost 25,000 a year).  The 9,000 jobs represent 0.05% of California’s 18 million jobs.

So the bottom line doesn’t support your argument.  And California has lower total business taxes than Texas, period.

But if it is so much better in Texas, why don’t you move there, Wireless, also Daniel Petry?  Put your money where your mouths are.

As for medical cost, I’m totally happy that the US tries to keep Medicare reimbursements down.  Elated.  Medical inflation is out of control.  I must say the Government has not mandated one single medical procedure on anyone in my family ever, and when my Mother was in hospital for 4 months with her terminal illness, not a single test or procedure was mandated.  If anything, the hospital did quite the contrary… they did just about nothing and my family took shifts washing/massaging/ checking IV and drugs.  But that is one instance, and if you have systematic evidence that US marshals show up at hospitals and force medical procedures on patients, I’m very interested in seeing that evidence.

» on 03.08.11 @ 05:19 PM

“But if it is so much better in Texas, why don’t you move there, Wireless, also Daniel Petry? Put your money where your mouths are.”  I have.  I have two business partnerships in Texas, three in Arizona, and two in Florida.  And I love it! I stay here just long enough like the Big “O”, to not pay state taxes and I would NEVER open a business in this state…but I do love the beach.  Now in your case, you are trapped. If you left the state you’d have to find a job rather than live off the dole of others.  But thanks for the suggestion.  BTW - what is your fascination with Texas.  You should be really concerned with Arizona and Nevada.  But we have loved sending over 150,000 illegals your way. Smoke on dude.

» on 03.08.11 @ 11:59 PM


I’m happy you are so happy with the state of our state and union.  You do indeed live in publiusworld, a magic place detached from reality.  Enjoy it there. 

In the meantime, the rest of us who can see the obvious will try and fix this mess.

» on 03.09.11 @ 02:03 AM

Publius, I have just spent a pleasant 30 minutes reading this thread, thanks. You never lose your temper, you continue to present the facts, and you don’t give up. I applaud you.

The people who benefit from reading your arguments even include wireless and Daniel Petry, though they may only absorb facts wisdom subconsciously. Who knows, in Petry’s case the meth may wear off at some point.

» on 03.09.11 @ 02:57 AM

publius and Rambler.

Business climate rankings, 2011 CA #49 and on the descent:

Here is the best places to do business, #2 Texas.  It’s Forbes so I’m sure you’ll dismiss it as a right wing conspiracy:

Here is another unrelated source from 2005:

You’ll surely find Google the one’s from states that don’t like their rankings and tell you why its not so, and from think tanks or academics that like high taxes and social welfare programs.  If you want to find stuff on the internet that supports your views that is easy. 

What isn’t easy is to explain the US Census.  Why did Texas, who publius with a small p, tells us is really not a great place to do business, pick up 4 Congressional seats?  Must be because lots of people moved there because there are no jobs and it is a place that sucks to do business.

On the same vane, why did CA, which has never failed, until now, to gain seats after a Census, not gain any?  In fact, we almost lost one.  Must be because CA is such a great and cost effective place to do business that people are moving to Texas instead because it sucks so bad.  I think I get it.

If you guys or gals want to continue to pretend that CA, or the US for that matter, is in great shape I apparently can’t penetrate your noodles and I’ll wish you good luck.

But I will say you are fooling yourselves and your stubborn dedication to obviously failing policies is damaging our state and country.  We are on an undeniable trajectory to national and state insolvency and you folks are concentrating on the grass in the cracks of the sidewalk.  Wake up.

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