Credit Crisis For Dummies

Disarmament In America's Energy Security Battles

Development of abundant power and fuel sources

is being restrained by regulatory headlocks

in favor of much higher-cost green alternatives

with relatively scant capacity prospects.

by Larry Bell

Current Obama administration battle strategies directed toward futile wars to control climate change and free America from fossil dependence are hindering, not advancing, progress toward lasting energy security. Development of abundant power and fuel sources--which we will continue to rely on--is being restrained by regulatory headlocks in favor of much higher-cost "renewable" and "green" alternatives with relatively scant capacity prospects.

Proponents of such policies would have us imagine an autonomous nation powered and fueled by limitless sunbeams, friendly breezes and amber waves of grain-producing-alcohol that sever reliance upon dirty coal mines, oil rigs and smokestacks (those ugly industries that presently heat our homes, fuel our cars and power our computers). How can we possibly resist such a vision? Well maybe it's a bit easier to do so after we observe European experiences.

The E.U., which like the U.S. relies heavily upon coal and oil, has found little salvation through enormous investments in renewable alternatives. This realization is now causing large measures of buyer's remorse and pain. Members are witnessing their already shaky economies further destabilized by rampant fuel hikes, menacing power shortages and costly, yet unsuccessful, CO2 emission reduction efforts.

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Black Friday, the Federal Reserve, & the Global House of Cards

Higher Taxes Won't Reduce the Deficit

by Stephen Moore
and Richard Vedder

The draft recommendations of the president's commission on deficit reduction call for closing popular tax deductions, higher gas taxes and other revenue raisers to drive tax collections up to 21% of GDP from the historical norm of about 18.5%. Another plan, proposed last week by commission member and former Congressional Budget Office director Alice Rivlin, would impose a 6.5% national sales tax on consumers.

The claim here, echoed by endless purveyors of conventional wisdom in Washington, is that these added revenues—potentially a half-trillion dollars a year—will be used to reduce the $8 trillion to $10 trillion deficits in the coming decade. If history is any guide, however, that won't happen. Instead, Congress will simply spend the money.

In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee (known as the $1.58 study) that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results.

We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.

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Value Added Tax (VAT) - Unfair and Insane

by Herman Cain

There’s one message from the 2010 elections that many so-called policy makers, political elites and analysts did not hear. Namely, the American people are not as uninformed and stupid as they think we are.

President Obama’s Debt Commission and the Bipartisan Policy Center’s Debt Reduction Task Force have both floated their ideas for reducing our nation’s runaway national debt. As CNNMoney.com reports, both sets of ideas echo each other in broad strokes. And both sets of ideas could confuse and confound the leaves off a tree.

These ideas are a long way from becoming law, but they are generating, as intended, much discussion about the merits of each idea.

The worst idea is a proposed national sales tax, which is a disguised VAT (value added tax) on top of everything we already pay in federal taxes.

A national retail sales tax on top of all the confusing and unfair taxes we have today is insane! It gives the out-of-control bureaucrats and politicians in denial one more tool to lie, deceive, manipulate and destroy this country.

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