Monday, September 26, 2011

Out of the Pizza Pan and into the Fire

When the current Great Depression started the southern states were booming, and the rust belt states were already in serious decline from the outsourcing of manufacturing jobs. Now it’s the south’s turn to see steadily rising unemployment as the lower paid jobs are now being outsourced, and the general lack of demand brings layoffs in the retail and service sectors.

A reverse migration of skilled workers from rust belt states who have ties to the south also contributes to the unemployment rate as they displace local workers. On top of this, is the attitude of Red State governments to slash jobs and cut revenue and you have a self reinforcing decline.

One of the states with the fastest declining job situation is Texas where Governor and one time Presidential candidate Rick Perry and the Republicans are determined to do all of the wrong things. They have yet to realize that an economy can’t be operated on articles of faith. They have faith that cutting wages makes everybody rich, that no taxes on the rich will make more rich people and free trade is really free. An F-5 tornado can be modeled with numbers put into equations, and numbers put into equations define an economic model. Neither of these phenomena care if you believe that the numbers don’t matter, either of these (sets of numbers) will kill you if you ignore them.

Rick Perry fell on his face in the Florida debate, and then finish a very distant second in the Florida Straw Poll. This was not because he gave the wrong answer on immigration. Mitt Romney did kill the Dream Act in his state and he did even worse in the Poll than Perry. Florida’s Straw Poll was different than the Ames Iowa Straw Poll where the person with the most buses and the best box lunch wins. Potential voters in Florida were restricted to party activists who tend to have some money, and therefore a greater interest in economic policy.

Rick Perry’s plan for the economy revolves around Texas swagger (as in don’t step in that pile of swagger). Mitt Romney successfully pointed out that Perry was taking credit for jobs he didn’t create, and in fact Texas is declining fast. Mitt Romney wasn’t rewarded for tattling however, as people are catching on to the fact Mitt created his jobs in China and India. Mitt also has a problem campaigning to a small group like in Florida, Republicans who meet him describe him as “the more you get to know him the less you like him”. He’s basically a rich preppy kid who has never worked and has no clue about anybody who does. This results in Mitt constantly sticking his foot in his mouth. It doesn’t really have that much to do with him being a Mormon because neither of the hardcore Christians got the votes either, Bachman got almost none.

Enter Herman Cain, personable, passionate and best of all, he has an detailed economic plan. If he wasn’t, you know, [whisper] BLACK, he would have swept the Straw Poll by an even bigger margin. The problem is that Republican grey beards don’t really want people talking about the economy too much, they might start learning something (can’t have that).

They won’t however, learn anything from Herman Cain’s plan. It’s utter nonsense, but it’s complicated enough with lots of buzz words Republicans like in it. This makes the dim bulbs think he’s really on to something. After all he made the pizzas come on time, just like Mussolini did with the trains.

The clever symmetry of the Pizza Plan is it has three “nines“, like nice even slices of pizza pie. Why it doesn’t occur to people (even dumb people) that there is no reason that these numbers should be the same… oh what am I saying, these people go for this kind of crap all the time.

Herman’s Pizza would have 9% flat corporate taxes, that would be 2 points less than they pay on average now. An individual flat tax of 9% for everybody, people too poor to pay now, would pay 9% while the rich would go from an average of 28% down to 9%. To pay the bills, a 9% National sales tax, on top of the 6 or 7% most states have now, not counting the need for more state revenue as the Federal Government shrinks under this plan.

To top this off there would be zero tax on repatriated offshore profits so that there would be no impediment what so ever to outsourcing jobs. No capital gains tax, so Warren Buffet would pay no taxes at all. Elimination of the “Death Tax” so that the top 0.024% who have estates large enough to be taxed would “save” $1.4 trillion over the next 10 years. The bottom 99.976% would get no benefit but would need to make up the $1.4 trillion. He preaches elimination of payroll taxes which means no funding mechanism for Social Security or Medicare, but who needs that?

His conclusion is that this would immediately put 10 million people to work and dramatically increase revenue. Let’s see, the plan encourages outsourcing and capital hoarding since capital gains, offshore profits and rich people in general aren’t taxed. The poor and middle class have their taxes increased dramatically whether they are working or not (9% sales tax and 9% income tax with no exemptions for luxuries like kids), but they get no benefits from the shrunken government. But Herman Cain’s plan will get here in 20 minutes or less.


BarlBarx said...

Germany individual income tax rates ,2011

Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over

Note: The rates are before solidarity tax,all individuals,and business tax-for business income.
Members of the church pay 8%-9% church tax. Overseas income is also taxed.

And what do Germans get in return? 6% unemployment, high wages, better healthcare, lower debt, more vacation, trade surplus, etc...


prairie2 said...

I didn't check the numbers but they seem about right. They are in Euros so add 34% to convert to USD. Plus a factory job that pays 28,000 in the US pays 48,000 in Germany. We live in the land of plenty. Plenty of parasitic Republicans.l