By Paul Mladjenovic
Copyright 2010. Paul Mladjenovic. All rights reserved.
I have been analyzing economics and financial markets for over a quarter century and my analysis always stopped at “financial”. In other words, I do not follow trough usually past the financial theme. After all, as a certified financial planner (CFP), you usually think in terms of dollars and cents, interest rates and all sorts of financially-oriented concepts. I have always been concerned about the financial and economic impact of many different kinds of policies and events but in recent years I started thinking “outside of my own box.”
Perhaps what I find more unsettling that the financial impact of certain policies and events, is what happens afterwards. What is the social impact of bad financial/social policies?
After all, I don’t worry about the impact of good policies and good events since the impact is usually beneficial or at least not bad. However, it sunk in some years ago the following important observation:
ECONOMIC DISINTEGRATION LEADS TO SOCIAL DISINTEGRATION
When economies break down, you are left with people that have desperate needs. This was true in my former country Yugoslavia during the 1990s. It was true of the former Soviet Union during the late 1980s. It was true of almost every country throughout history.
As you watch Greece today, you see disintegration right before your eyes. In recent years, Greece’s government kept spending the country into today’s resulting chaos (think “Keynes”). The country may or may not be “bailed out” by the European Union. Of course, bailing out Greece means that other struggling countries will be forced to come up with the money to do so. What condition will those countries be in? After all, they are not in good shape today.
The next observation is also a very important one when we talk about heady topics like “economic collapse” and the resulting social disintegration:
THE #1 REASON WHY ECONOMIES COLLAPSE IS BECAUSE GOVERNMENTS
AND THEIR SPENDING (DEBT AND INFLATION) GROW OUT OF CONTROL.
That’s right…excessive and growing government is the #1 reason why economies collapse. Throughout history, various groups of people petitioned the government for money and assistance because they think that there is some endless pot of goodies called “government money”. Government does not have its own money…it only has what it can extract by force from others (taxes). In the case that it prints money, this is also not a “freebie”. Printing money leads to inflation and inflation is nothing more than an insidious stealth tax than consumers ultimately pay. Runaway inflation also leads to a currency collapse.
Throughout my life, I have always strongly called for limiting government. Yes…the main reason is that I have seen over and over again, the dangers of growing or unlimited government. Whether you call it “socialism” or some other “-ism” like communism or totalitarianism, it is still in the general realm of “statism” and this is something that must…MUST…be limited. Not only for the good of society but also ironically for the good of government itself.
The “good-hearted” among us like to see the government be there in those cases when individuals need a helping hand and this is fine. The problem is when the situation grows out of control. At that point, no one gets any help. It becomes desperate as government itself becomes a casualty of its own excesses.
Is America next? If America continues on its current path, the answer is a sad yet resounding one…YES.
For America’s sake, it needs to reign in government at all levels. It needs to drastically cut spending, reduce taxes and scale back the blizzard of regulations that are choking economic activity at all levels.
The sad truth is that the people in power now are not doing this at all. They are in fact escalating their efforts with massive trillion-dollar spending, rising taxes and producing more bureaucratic burdens for us.
Just look at the healthcare reform and the financial reform acts. These monstrosities are thousands of pages of inane, confusing and counterproductive bureaucracy with lots of economic harm and very little good.
As we face the abyss up ahead, we have an overzealous government at the driver’s seat and it is accelerating forward. Sadly, our short-sighted politicians don’t seem to care. God help us!
What we can do as individuals…
1) Keep up your individual efforts to accumulate physical gold and silver and get your “financial house in order”. Just because the government is pushing us toward bankruptcy and chaos, that doesn’t mean that we should do the same. Keep managing your costs, lowering your debt, etc.
2) As I have mentioned in prior essays, support those candidates and policies that lower the size, scope and reach of government (at all levels).
3) Keep building up your network of friends and allies. That will come in handy later on.
Also, take a moment to sign up for the Prosperity Alert newsletter since I will be adding more resources and strategies for coping in today’s economy. In a forthcoming issue, I will make some economic forecasts to keep you “ahead of the curve”. Take control and …take care!
Taking the right steps now will help you and your loved ones get to the other side with greater safety.
Monday, May 3, 2010
Monday, April 26, 2010
The Epic Economic Battle of Our Time
By Paul Mladjenovic
Copyright 2010. Paul Mladjenovic. All rights reserved.
As we look at the headlines that are swirling around us…
“Potential for financial system crisis is still feared”
“Greece has continuing economic problems”
“The Federal government is considering Value-Added-Tax”
“California fighting off bankruptcy”
“Federal government bureaucracy growing fast”
“Unemployment is persistent difficulty for economy”
(…and so on)
These seem to be all disjointed headlines. A patch of problems here… a crisis over there… and some difficulty over here. Worry and concern seem to be everywhere and for good reason. Prosperity seems as unreachable as the stars.
What will hopefully dawn on people is that there is a common thread throughout all this upheaval. It is really the epic economic battle of “Freedom vs. Statism”.
Statism is the idea that “the State” should be more and more involved in the economic and personal lives and businesses of general society. Statism is the growing use of government power and bureaucracy in an attempt to force certain economic outcomes. More statism is about more coercion, control and confiscation ostensibly in an attempt to allegedly “solve economic problems”. We see statism in obvious and not so obvious ways. We see growing statism at the federal level and also at the state and local level. We have seen it in the prior presidential administration and we are definitely seeing it in the current one.
There is the statism that you see…
• More federal involvement in the auto industry, the banking industry, Wall Street, etc.
• More government control, coercion and confiscation in the healthcare industry
• More state taxes and more state spending followed by yet more taxes.
• More government debt in places ranging from California and Illinois to Greece and Spain.
And then there is the statism that you don’t immediately see…
• inflation and currency crises due to government mismanagement of the currency.
• The multi-trillion-dollar growth of unfunded liabilities (such as Medicare).
• The back-room deals for financial firms that will end up costing taxpayers dearly.
I am sure that you can come up with your own examples. The point is that the “big picture” tells us that all of this is part of the tapestry of the larger battle that we should be aware of; the one between freedom and statism.
In the economic world, freedom is a reference to the “free market”. The free market is simply peaceful, voluntary exchange between buyers and sellers. For a nation, it is millions of people and businesses trading value for value in a voluntary way. The exchange is typically money for goods and services but the hallmark of this exchange is that it is about peaceful exchange…that is the essence of a free market…FREEDOM.
The net result of this free exchange is economic growth. The buyers get goods and services while the sellers get paid for their cost of production plus a profit. The profit, then, is utilized for growth whether we realize or not, whether we acknowledge it or not. The bottom line is that this activity is about PRODUCTION. Production is a critical part of a healthy, growing economy. Without the production of goods and service, what consumption can there be?
In that voluntary exchange, profit is the crucial key to growing that business in particular and the economy in general. Profit is the catalyst for job creation, innovation and business expansion. The primary beneficiary of this private growth and expansion is the government. As profits grow and jobs are created, this ultimately results in greater tax revenue for government. But what if government…the state…grows faster than the economy’s ability to sustain it? You must remember that statism and government is not merely paperwork, taxes, laws, regulations, bureaucracy and what we see. Keep in mind that statism (as embodied in government) is CONSUMPTION BY FORCE.
The embodiment of statism (government) siphons its resources by force from the economy. If it is kept at a reasonable (low) level, then both the free market (the economy) and the government can co-exist just fine. If government is kept at a reasonable level, general prosperity is relatively easy to achieve. However, this is not the case today. Far from it!
I came from a now-defunct communist country (the former socialist paradise of Yugoslavia). My family and I learned that painful economic lesson all too well. When you tear away “communist rhetoric”, what you have is an economy totally run by government bureaucracy where “consumption” is king and “production” is basically decimated. What you had left was a country where the general populace was hungry and constantly in need of the basics of life. You had an economy that was top-heavy in “wants and needs” unfulfilled and totally lacking in the means (production!) to fulfill those wants and needs (translation: Poverty!)
The Yugoslavian government thought that an easy way to fix the problem was simply to flood the economy with “more money”. After all, the government (statism) was in charge of printing money. Surely you can make everyone better off by printing trillions of “dinars” (the currency at the time) and give the economy some good old-fashioned stimulus…Right?
Wrong. It didn’t solve the crisis of production. Of course, what it did “produce” was hyper-inflation. By now, the people had enough. Social chaos and conflict ensued and this led to civil war and total breakdown. Yugoslavia was no more by 1994. At the heart of all this was a case of statism gone too far.
The lesson is that freedom and a healthy, thriving free market is critical…CRITICAL…to the long-term success and viability of an economy. And yes…it is even critical for the government’s own well-being and for the well-being of those that are dependent on what it offers.
What worries me is that this lesson is being ignored right now in America. I can’t change that. But I can certainly inform some people about what personal strategies would be needed. You can stay informed by getting a free subscription to the Prosperity Alert newsletter.
For more immediate information on specific strategies, you can view my recent essays or just take note of a few points (among others) that I remind my readers and students about:
1. Keep accumulating gold & silver physical bullion. Inflation and currency troubles are on the way so diversify away from potential currency issues (remember that currencies are managed by government).
2. If you are in a high-tax, high-spending state (such as California), explore the feasibility of moving to a lower-tax, limited-government state.
3. Assess your lifestyle and situation and find out where you are vulnerable when it comes to “the necessities of life”. I will cover more of this topic in future issues of the Prosperity Alert.
4. Regardless of your party affiliation, vote for lower taxes and limited government….the country depends on you to make the right choice!
I guess the amazing thing about this conflict that I write about…”Freedom versus Statism” is this:
If freedom wins, that is good for both freedom (and prosperity) and government as well. However, if statism wins, that would be bad for freedom in the short-term but it would ultimately be bad for government in the long-term.
The question is… will we learn this lesson the easy way… or the hard way?! Stay tuned…
----------------------------------------------------------------
Paul Mladjenovic, CFP is a financial seminar leader, author of Stock Investing for Dummies and the editor of the Prosperity Alert newsletter. FREE BONUS to new subscribers: Get a free 56-page ebook on budgeting to help you gain control over your finances! The tips and strategies in this ebook are more needed than ever! Get it today by subscribing to the Prosperity Alert.
Copyright 2010. Paul Mladjenovic. All rights reserved.
As we look at the headlines that are swirling around us…
“Potential for financial system crisis is still feared”
“Greece has continuing economic problems”
“The Federal government is considering Value-Added-Tax”
“California fighting off bankruptcy”
“Federal government bureaucracy growing fast”
“Unemployment is persistent difficulty for economy”
(…and so on)
These seem to be all disjointed headlines. A patch of problems here… a crisis over there… and some difficulty over here. Worry and concern seem to be everywhere and for good reason. Prosperity seems as unreachable as the stars.
What will hopefully dawn on people is that there is a common thread throughout all this upheaval. It is really the epic economic battle of “Freedom vs. Statism”.
Statism is the idea that “the State” should be more and more involved in the economic and personal lives and businesses of general society. Statism is the growing use of government power and bureaucracy in an attempt to force certain economic outcomes. More statism is about more coercion, control and confiscation ostensibly in an attempt to allegedly “solve economic problems”. We see statism in obvious and not so obvious ways. We see growing statism at the federal level and also at the state and local level. We have seen it in the prior presidential administration and we are definitely seeing it in the current one.
There is the statism that you see…
• More federal involvement in the auto industry, the banking industry, Wall Street, etc.
• More government control, coercion and confiscation in the healthcare industry
• More state taxes and more state spending followed by yet more taxes.
• More government debt in places ranging from California and Illinois to Greece and Spain.
And then there is the statism that you don’t immediately see…
• inflation and currency crises due to government mismanagement of the currency.
• The multi-trillion-dollar growth of unfunded liabilities (such as Medicare).
• The back-room deals for financial firms that will end up costing taxpayers dearly.
I am sure that you can come up with your own examples. The point is that the “big picture” tells us that all of this is part of the tapestry of the larger battle that we should be aware of; the one between freedom and statism.
In the economic world, freedom is a reference to the “free market”. The free market is simply peaceful, voluntary exchange between buyers and sellers. For a nation, it is millions of people and businesses trading value for value in a voluntary way. The exchange is typically money for goods and services but the hallmark of this exchange is that it is about peaceful exchange…that is the essence of a free market…FREEDOM.
The net result of this free exchange is economic growth. The buyers get goods and services while the sellers get paid for their cost of production plus a profit. The profit, then, is utilized for growth whether we realize or not, whether we acknowledge it or not. The bottom line is that this activity is about PRODUCTION. Production is a critical part of a healthy, growing economy. Without the production of goods and service, what consumption can there be?
In that voluntary exchange, profit is the crucial key to growing that business in particular and the economy in general. Profit is the catalyst for job creation, innovation and business expansion. The primary beneficiary of this private growth and expansion is the government. As profits grow and jobs are created, this ultimately results in greater tax revenue for government. But what if government…the state…grows faster than the economy’s ability to sustain it? You must remember that statism and government is not merely paperwork, taxes, laws, regulations, bureaucracy and what we see. Keep in mind that statism (as embodied in government) is CONSUMPTION BY FORCE.
The embodiment of statism (government) siphons its resources by force from the economy. If it is kept at a reasonable (low) level, then both the free market (the economy) and the government can co-exist just fine. If government is kept at a reasonable level, general prosperity is relatively easy to achieve. However, this is not the case today. Far from it!
I came from a now-defunct communist country (the former socialist paradise of Yugoslavia). My family and I learned that painful economic lesson all too well. When you tear away “communist rhetoric”, what you have is an economy totally run by government bureaucracy where “consumption” is king and “production” is basically decimated. What you had left was a country where the general populace was hungry and constantly in need of the basics of life. You had an economy that was top-heavy in “wants and needs” unfulfilled and totally lacking in the means (production!) to fulfill those wants and needs (translation: Poverty!)
The Yugoslavian government thought that an easy way to fix the problem was simply to flood the economy with “more money”. After all, the government (statism) was in charge of printing money. Surely you can make everyone better off by printing trillions of “dinars” (the currency at the time) and give the economy some good old-fashioned stimulus…Right?
Wrong. It didn’t solve the crisis of production. Of course, what it did “produce” was hyper-inflation. By now, the people had enough. Social chaos and conflict ensued and this led to civil war and total breakdown. Yugoslavia was no more by 1994. At the heart of all this was a case of statism gone too far.
The lesson is that freedom and a healthy, thriving free market is critical…CRITICAL…to the long-term success and viability of an economy. And yes…it is even critical for the government’s own well-being and for the well-being of those that are dependent on what it offers.
What worries me is that this lesson is being ignored right now in America. I can’t change that. But I can certainly inform some people about what personal strategies would be needed. You can stay informed by getting a free subscription to the Prosperity Alert newsletter.
For more immediate information on specific strategies, you can view my recent essays or just take note of a few points (among others) that I remind my readers and students about:
1. Keep accumulating gold & silver physical bullion. Inflation and currency troubles are on the way so diversify away from potential currency issues (remember that currencies are managed by government).
2. If you are in a high-tax, high-spending state (such as California), explore the feasibility of moving to a lower-tax, limited-government state.
3. Assess your lifestyle and situation and find out where you are vulnerable when it comes to “the necessities of life”. I will cover more of this topic in future issues of the Prosperity Alert.
4. Regardless of your party affiliation, vote for lower taxes and limited government….the country depends on you to make the right choice!
I guess the amazing thing about this conflict that I write about…”Freedom versus Statism” is this:
If freedom wins, that is good for both freedom (and prosperity) and government as well. However, if statism wins, that would be bad for freedom in the short-term but it would ultimately be bad for government in the long-term.
The question is… will we learn this lesson the easy way… or the hard way?! Stay tuned…
----------------------------------------------------------------
Paul Mladjenovic, CFP is a financial seminar leader, author of Stock Investing for Dummies and the editor of the Prosperity Alert newsletter. FREE BONUS to new subscribers: Get a free 56-page ebook on budgeting to help you gain control over your finances! The tips and strategies in this ebook are more needed than ever! Get it today by subscribing to the Prosperity Alert.
Thursday, April 22, 2010
Raising taxes is stupid, stupid, STUPID…and what to do
By Paul Mladjenovic
Copyright 2010. Paul Mladjenovic. All rights reserved.
The rumblings coming out of Washington and out of many state capitals is about growing deficits and many politicians and commentators are talking about raising taxes. The talking points include…
1. Many states are talking about raising tax rates to increase their revenue.
2. Unless renewed, federal income tax cuts are set to expire Jan’11: Higher taxes next year.
3. More politicians are talking about instituting a European-style VAT tax.
Of course, many of the politicians and pundits will find some bonehead economist that either thinks raising taxes is a “good idea” or a “painful necessity”. What nonsense! Any economist that thinks that raising taxes in the midst of the worst economic conditions in our lifetime is a good idea should be fired for incompetence. This “economist” is better off in a new job where he can say things like “Would you like fries with that?”
All the government deficits in our country (Federal, state, etc.) have not been due to a lack of taxation.
GOVERNMENT DEFICITS ARE DUE TO EXCESSIVE SPENDING. PERIOD!
Government at every level gets sufficient revenue to run its necessary operations. The problem is that politicians spend and spend and spend to increase their elect-ability. They spend money to curry favor with public unions, influential corporations and many that simply want the fruits of other people’s labor. Look… government officials over-spend money freely because it is NOT their money. They over-spend because money from taxes does not come voluntarily…
“TAX MONEY” IS MONEY PAID DUE TO FORCE.
When politicians run deficits, they have no constraints or incentives to shrink spending. Why should they? If they have a revenue shortfall, they know all they need to do is to FORCE TAXPAYERS TO PAY MORE.
You now come to the biggest difference between a business and government. Business is a “voluntary” entity; if a business wants your money, it must please you enough so that you VOLUNTARILY give it money. Business must provide goods and services to survive and make a profit. Consumers are not forced to buy these goods and services from any particular business; remember that there is choice and competition. In the free market, the one paying has the greater power.
Government, on the other hand, is a “coercive” entity. In government finance, the one paying to support the government (the taxpayer) does not have power. If a taxpayer gets frustrated and feels that taxes are too high…well…too bad! The government doesn’t care and they don’t have to care because…again…the money they get is through FORCE.
The problem for government is that at the personal level, taxpayers are not stupid. They will not sit idly by and willingly get plundered. Taxpayers will find legal (and sometimes illegal) ways to hold on to the fruits of their labor. The most common responses that over-burdened taxpayers do are…
1. Employ tax-fighting strategies and hire experts to decrease their tax burdens.
2. Work less!
3. Produce less!
4. Leave! In recent years, high-tax states have seen a growing number of taxpayers go elsewhere.
5. Fill in the blank___________________. People can get creative with tax avoidance.
This is where the stupidity of tax increases becomes obvious to all. Tax increases unleash lots of unintended consequences. People spend more of their time and effort figuring ways to escape punitive taxes rather than using the same time being productive and innovative in more sensible economic pursuits.
Government officials keep seeing time and time again that increasing tax rates does NOT result in more revenue. These near-sighted officials don’t realize that higher tax rates punish economic growth and job creation. When businesses and employers are struggling with high tax rates and stringent compliance regulations and paperwork burdens, they don’t have the ability to hire (or keep!) employees. Money that is forcibly shifted from the private sector to the public sector only makes the revenue situation worse, not better for government.
When you hurt the private sector, you are killing the golden goose. A or struggling or shrinking private sector ultimately means less revenue for government, regardless of how high tax rates go. It becomes a vicious cycle. The end result is that government deficits become unmanageable and sources of tax revenues are sucked dry and then there is no choice but to reduce the size of government…either by consent or by the force of financial collapse. Had the reduction of government happened much sooner, much economic pain would be avoided.
Keeping tax rates low is not just good for taxpayers. Ultimately it is good for government as well. In turn this is good for those dependent on government assistance. It is no coincidence that most of the very-high tax rate states have the deepest deficits while most of the states that are in fairly good shape have relatively low taxes. A good example of this is the comparison of California and Texas. California has high taxes and high spending and it is in danger of collapse. Overall, Texas has low taxes yet it is in good shape given today’s economy.
The bottom line is that raising taxes…
• Does not increase revenue
• Is not moral, ethical or practical
• Does not make any economic sense
• Is bad for the private sector
• Makes matters worse…not better.
Seriously, how can you grow and sustain a prosperous economy if you keep taking more and more money from production (the private sector) and forcibly shift it to consumption (the public sector)?
In a word, raising taxes is STUPID. But until common sense returns to Washington and the state capitals (don’t hold your breath!), we as consumers and taxpayers must deal with it.
What to do…
1. Find ways to cut your taxes. I have recently set up www.Cut-Taxes.blogspot.com to address this. I will keep adding tax-fighting resources and I will alert folks through www.twitter.com/paulmlad.
2. Start a home business. A home business is a great way to save big on taxes! This is why I have taught a class on starting a home business for over 20 years since I think that a home business is a powerful financial planning & wealth-building tool. You can find my class at www.SuperMoneyLinks.com. There are other ways, of course, but starting a home business can be easy and inexpensive to do.
3. Vote for low taxes. I don’t care which party or person you choose, just make sure that on the singular issue of government fiscal policy that they are STRONGLY in favor of lowering taxes and government spending. The National Taxpayer Union (NTU) is a good place to start and they are at www.ntu.org.
A good example of a pro-taxpayer, pro-smaller government candidate is one of my favorite real estate experts, David Corsi. I have known him for over 20 years and guys like him are badly needed in the rat-infested halls of Congress (Dave’s site is www.CorsiforCongress.com...check it out).
The NTU compiles more information on what politicians and candidates are doing in regards to tax matters. Get their free email alerts. Be informed for the coming election.
Look… it is crisis time for our nation. The economy is struggling big time yet…federal and state governments are lavishly spending at mind-boggling levels…the worst in our history! Economic pain is certain now.
Even if tax rates were raised to 100% and they also pulled out the gold and silver fillings in your kid’s mouth, they would STILL be trillions in the hole! The profligate and irresponsible spending has gone beyond disgusting and raising taxes will NOT help government but it definitely WILL HURT the economy and those that support government…millions of honest, hard-working taxpayers like you and I.
It’s an election year… tell them “NO” to raising taxes.
Copyright 2010. Paul Mladjenovic. All rights reserved.
The rumblings coming out of Washington and out of many state capitals is about growing deficits and many politicians and commentators are talking about raising taxes. The talking points include…
1. Many states are talking about raising tax rates to increase their revenue.
2. Unless renewed, federal income tax cuts are set to expire Jan’11: Higher taxes next year.
3. More politicians are talking about instituting a European-style VAT tax.
Of course, many of the politicians and pundits will find some bonehead economist that either thinks raising taxes is a “good idea” or a “painful necessity”. What nonsense! Any economist that thinks that raising taxes in the midst of the worst economic conditions in our lifetime is a good idea should be fired for incompetence. This “economist” is better off in a new job where he can say things like “Would you like fries with that?”
All the government deficits in our country (Federal, state, etc.) have not been due to a lack of taxation.
GOVERNMENT DEFICITS ARE DUE TO EXCESSIVE SPENDING. PERIOD!
Government at every level gets sufficient revenue to run its necessary operations. The problem is that politicians spend and spend and spend to increase their elect-ability. They spend money to curry favor with public unions, influential corporations and many that simply want the fruits of other people’s labor. Look… government officials over-spend money freely because it is NOT their money. They over-spend because money from taxes does not come voluntarily…
“TAX MONEY” IS MONEY PAID DUE TO FORCE.
When politicians run deficits, they have no constraints or incentives to shrink spending. Why should they? If they have a revenue shortfall, they know all they need to do is to FORCE TAXPAYERS TO PAY MORE.
You now come to the biggest difference between a business and government. Business is a “voluntary” entity; if a business wants your money, it must please you enough so that you VOLUNTARILY give it money. Business must provide goods and services to survive and make a profit. Consumers are not forced to buy these goods and services from any particular business; remember that there is choice and competition. In the free market, the one paying has the greater power.
Government, on the other hand, is a “coercive” entity. In government finance, the one paying to support the government (the taxpayer) does not have power. If a taxpayer gets frustrated and feels that taxes are too high…well…too bad! The government doesn’t care and they don’t have to care because…again…the money they get is through FORCE.
The problem for government is that at the personal level, taxpayers are not stupid. They will not sit idly by and willingly get plundered. Taxpayers will find legal (and sometimes illegal) ways to hold on to the fruits of their labor. The most common responses that over-burdened taxpayers do are…
1. Employ tax-fighting strategies and hire experts to decrease their tax burdens.
2. Work less!
3. Produce less!
4. Leave! In recent years, high-tax states have seen a growing number of taxpayers go elsewhere.
5. Fill in the blank___________________. People can get creative with tax avoidance.
This is where the stupidity of tax increases becomes obvious to all. Tax increases unleash lots of unintended consequences. People spend more of their time and effort figuring ways to escape punitive taxes rather than using the same time being productive and innovative in more sensible economic pursuits.
Government officials keep seeing time and time again that increasing tax rates does NOT result in more revenue. These near-sighted officials don’t realize that higher tax rates punish economic growth and job creation. When businesses and employers are struggling with high tax rates and stringent compliance regulations and paperwork burdens, they don’t have the ability to hire (or keep!) employees. Money that is forcibly shifted from the private sector to the public sector only makes the revenue situation worse, not better for government.
When you hurt the private sector, you are killing the golden goose. A or struggling or shrinking private sector ultimately means less revenue for government, regardless of how high tax rates go. It becomes a vicious cycle. The end result is that government deficits become unmanageable and sources of tax revenues are sucked dry and then there is no choice but to reduce the size of government…either by consent or by the force of financial collapse. Had the reduction of government happened much sooner, much economic pain would be avoided.
Keeping tax rates low is not just good for taxpayers. Ultimately it is good for government as well. In turn this is good for those dependent on government assistance. It is no coincidence that most of the very-high tax rate states have the deepest deficits while most of the states that are in fairly good shape have relatively low taxes. A good example of this is the comparison of California and Texas. California has high taxes and high spending and it is in danger of collapse. Overall, Texas has low taxes yet it is in good shape given today’s economy.
The bottom line is that raising taxes…
• Does not increase revenue
• Is not moral, ethical or practical
• Does not make any economic sense
• Is bad for the private sector
• Makes matters worse…not better.
Seriously, how can you grow and sustain a prosperous economy if you keep taking more and more money from production (the private sector) and forcibly shift it to consumption (the public sector)?
In a word, raising taxes is STUPID. But until common sense returns to Washington and the state capitals (don’t hold your breath!), we as consumers and taxpayers must deal with it.
What to do…
1. Find ways to cut your taxes. I have recently set up www.Cut-Taxes.blogspot.com to address this. I will keep adding tax-fighting resources and I will alert folks through www.twitter.com/paulmlad.
2. Start a home business. A home business is a great way to save big on taxes! This is why I have taught a class on starting a home business for over 20 years since I think that a home business is a powerful financial planning & wealth-building tool. You can find my class at www.SuperMoneyLinks.com. There are other ways, of course, but starting a home business can be easy and inexpensive to do.
3. Vote for low taxes. I don’t care which party or person you choose, just make sure that on the singular issue of government fiscal policy that they are STRONGLY in favor of lowering taxes and government spending. The National Taxpayer Union (NTU) is a good place to start and they are at www.ntu.org.
A good example of a pro-taxpayer, pro-smaller government candidate is one of my favorite real estate experts, David Corsi. I have known him for over 20 years and guys like him are badly needed in the rat-infested halls of Congress (Dave’s site is www.CorsiforCongress.com...check it out).
The NTU compiles more information on what politicians and candidates are doing in regards to tax matters. Get their free email alerts. Be informed for the coming election.
Look… it is crisis time for our nation. The economy is struggling big time yet…federal and state governments are lavishly spending at mind-boggling levels…the worst in our history! Economic pain is certain now.
Even if tax rates were raised to 100% and they also pulled out the gold and silver fillings in your kid’s mouth, they would STILL be trillions in the hole! The profligate and irresponsible spending has gone beyond disgusting and raising taxes will NOT help government but it definitely WILL HURT the economy and those that support government…millions of honest, hard-working taxpayers like you and I.
It’s an election year… tell them “NO” to raising taxes.
Wednesday, April 14, 2010
The Fatal Flaw of Democracy is HERE and NOW...and What to Do
Few things summarize America’s economic plight today as much as this centuries-old quote:
“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing…."
No one is exactly sure who actually said it and if it is an accurate quote. That is irrelevant. The important point is that the quote resoundingly points to the fatal (economic) flaw of democracy. This fatal flaw should be evident to all as they watch today’s “big picture”.
Our current deficit (and future deficits) now exceed $1 trillion. The government’s growth as a voracious consumer of America’s resources is alarming. Additionally, most state governments are spending beyond the citizenry’s ability to pay for it. Yet, it is also much of the citizenry that voted for this dangerous profligacy!
THE FATAL FLAW OF DEMOCRACY IS HERE AND NOW.
Our country is at the point that it can not sustain the government’s out-of-control growth. It is indeed a massive tragedy that is now unfolding and millions that have grown dependent on government largesse are now being set up for tremendous economic pain. How may they react?
ECONOMIC DISINTEGRATION USUALLY LEADS TO SOCIAL DISINTEGRATION.
I have often written and lectured about how government causes much more economic pain than it has ever relieved. The juggernaut can not be stopped from wreaking its havoc on our society and even the best election results in November’10 will at best slow it down. We have to treat the coming meltdown as a hurricane:
We can not stop it. We can only prepare ourselves and the people we care about.
HERE IS WHAT TO DO…
1. Become as self-sufficient as possible.
2. Reduce your exposure to the general stock market.
3. Accumulate physical gold & silver.
4. If possible, move safely away from major cities.
5. Lower your living costs as much as possible.
6. Increase your savings.
7. Start a pantry and have extra necessities on hand (just in case!)
8. Learn about (and apply) ways to secure yourself, your family and your property
9. Develop strategic relationships with others. Gain more friends and allies
10. Add more sources of income (such as your own home business).
The list is actually longer but this is a start. Look…I am not a “doom and gloom” guy. I enjoy life and I am grateful for what is in my life…a wonderful family, good friends and a business that I enjoy. But I also have to view the world, the economy and the unfolding events REALISTICALLY.
Look…I can write some of this from my personal experience and background. My former country (socialist Yugoslavia) collapsed into social chaos in 1994 after extreme economic disintegration. Places like Greece certainly seem headed that way. Our economic house is not immune to Washington’s trillion-dollar wrecking ball.
Think about it…If millions of people are dependent on trillions with debt that can’t possibly be paid, what will logically follow? What does history tell us?
These are extraordinary times that require extraordinary planning. Therefore, the prudent thing to do is…
HOPE FOR THE BEST AND PREPARE FOR THE WORST
More on this as I continue to prepare educational & informational programs to help my students and readers do some prudent planning (financially and otherwise). A good place to start is at www.SuperMoneyLinks.com where I have many information-packed seminars on business & financial matters.
Some good specific programs for your consideration are…
• Learn how to generate your own income with the Home Business Goldmine audio seminar.
• Learn about safe investing and financial planning in the $50 Wealth-Builder audio seminar.
• The newest program is the full audio seminar Profit from the Commodities Super Boom.
My webmaster is hard at work to help make these (and other) programs available as reseller opportunities too so that you can make money along with me. Stay tuned for more details later.
In a few days I will email to my Prosperity Alert subscribers some information on how to save on your taxes for 2010 (it is too late to make changes for your 2009 taxes but there is plenty you can do with 2010!). Stay tuned for that as well.
In the meanwhile, do the right thing by the people you love. When you get a chance, I would most appreciate your thoughts on what type of educational programs that you would like to see me do for you. You can email your suggestions at paul@mladjenovic.com. Thank you and be well!
“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing…."
No one is exactly sure who actually said it and if it is an accurate quote. That is irrelevant. The important point is that the quote resoundingly points to the fatal (economic) flaw of democracy. This fatal flaw should be evident to all as they watch today’s “big picture”.
Our current deficit (and future deficits) now exceed $1 trillion. The government’s growth as a voracious consumer of America’s resources is alarming. Additionally, most state governments are spending beyond the citizenry’s ability to pay for it. Yet, it is also much of the citizenry that voted for this dangerous profligacy!
THE FATAL FLAW OF DEMOCRACY IS HERE AND NOW.
Our country is at the point that it can not sustain the government’s out-of-control growth. It is indeed a massive tragedy that is now unfolding and millions that have grown dependent on government largesse are now being set up for tremendous economic pain. How may they react?
ECONOMIC DISINTEGRATION USUALLY LEADS TO SOCIAL DISINTEGRATION.
I have often written and lectured about how government causes much more economic pain than it has ever relieved. The juggernaut can not be stopped from wreaking its havoc on our society and even the best election results in November’10 will at best slow it down. We have to treat the coming meltdown as a hurricane:
We can not stop it. We can only prepare ourselves and the people we care about.
HERE IS WHAT TO DO…
1. Become as self-sufficient as possible.
2. Reduce your exposure to the general stock market.
3. Accumulate physical gold & silver.
4. If possible, move safely away from major cities.
5. Lower your living costs as much as possible.
6. Increase your savings.
7. Start a pantry and have extra necessities on hand (just in case!)
8. Learn about (and apply) ways to secure yourself, your family and your property
9. Develop strategic relationships with others. Gain more friends and allies
10. Add more sources of income (such as your own home business).
The list is actually longer but this is a start. Look…I am not a “doom and gloom” guy. I enjoy life and I am grateful for what is in my life…a wonderful family, good friends and a business that I enjoy. But I also have to view the world, the economy and the unfolding events REALISTICALLY.
Look…I can write some of this from my personal experience and background. My former country (socialist Yugoslavia) collapsed into social chaos in 1994 after extreme economic disintegration. Places like Greece certainly seem headed that way. Our economic house is not immune to Washington’s trillion-dollar wrecking ball.
Think about it…If millions of people are dependent on trillions with debt that can’t possibly be paid, what will logically follow? What does history tell us?
These are extraordinary times that require extraordinary planning. Therefore, the prudent thing to do is…
HOPE FOR THE BEST AND PREPARE FOR THE WORST
More on this as I continue to prepare educational & informational programs to help my students and readers do some prudent planning (financially and otherwise). A good place to start is at www.SuperMoneyLinks.com where I have many information-packed seminars on business & financial matters.
Some good specific programs for your consideration are…
• Learn how to generate your own income with the Home Business Goldmine audio seminar.
• Learn about safe investing and financial planning in the $50 Wealth-Builder audio seminar.
• The newest program is the full audio seminar Profit from the Commodities Super Boom.
My webmaster is hard at work to help make these (and other) programs available as reseller opportunities too so that you can make money along with me. Stay tuned for more details later.
In a few days I will email to my Prosperity Alert subscribers some information on how to save on your taxes for 2010 (it is too late to make changes for your 2009 taxes but there is plenty you can do with 2010!). Stay tuned for that as well.
In the meanwhile, do the right thing by the people you love. When you get a chance, I would most appreciate your thoughts on what type of educational programs that you would like to see me do for you. You can email your suggestions at paul@mladjenovic.com. Thank you and be well!
Saturday, March 20, 2010
Who will Bail out the Taxpayer?
The federal government has been on the bail-out warpath in recent years. They have used taxpayer money to bail out auto makers, unions, banks, Wall Street brokerage firms and other entities. They have (and are) using taxpayer money to the tune of TRILLIONS for state governments and for massive social & military spending. The craven polticians and bureaucrats in Washington have no problem with historic, profligate spending that is heading toward mind-boggling and unsustainable levels.
The spending is reaching obscene and criminal highs and it is making the public very nervous. One of the biggest reasons for the tea party phenomena has been the alarming trillion-dollar growth of the federal government. Most of the state governments are also spending beyond their means.
WHEN WILL THE MADNESS STOP?!?!?
Tax-payers across America are tapped out. As of this moment, our federal government is on track to make matters much worse (if that is possible!).
Healthcare reform is scheduled for a vote. If it passes in its current state, it will FORCE taxpayers to pay more taxes. Much more! Since these taxes would be enacted immediately, the painful effect on an already weakened economy will be severe. WHO WILL BAILOUT THE TAXPAYER?
In addition, federal taxcuts enacted during 2001-2003 are scheduled to expire in January 2011. WHO WILL BAILOUT THE TAXPAYER?
Our founding fathers thought that "A person has the right to the fruits of one's labor" was so obvious that they didn't bother to expressly include in the Constitution. How tragic! they had no idea how rapacious and profligate our politicians would become.
Today, the most trampled "right" in America is the right to the fruits of one's labor. But what will happen when those "fruits of one's labor" are taxes away? What is left? Who will be left to pay for all the spending?
History tells us very clearly:
Every nation that has experienced a financial collapse did so because its government grew beyond the ability of its citizenry to pay for. They taxed too much, they borrowed too much and they spent too much.
Yes...much of it was done "with good intentions". In the past, those good intentions paved a path to hell. Today, however, that path to hell has become a super-highway.
Your Personal Strategy:
Find ways to cut your taxes. For decades I have taught my students that a home business is an economic necessity. I think that everyone should start a home business to add another income source to their financial situation but the second reason is that a home business can help you save thousands in taxes.
There are lots of good tax guides and you can CLICK HERE here to find one of my favorites.
In the April 2010 issue of my newsletter, PROSPERITY ALERT, I will cover some ways to save thousands on your taxes. Get a free subscription HERE.
I wish all of you continued success...
Paul Mladjenovic
The spending is reaching obscene and criminal highs and it is making the public very nervous. One of the biggest reasons for the tea party phenomena has been the alarming trillion-dollar growth of the federal government. Most of the state governments are also spending beyond their means.
WHEN WILL THE MADNESS STOP?!?!?
Tax-payers across America are tapped out. As of this moment, our federal government is on track to make matters much worse (if that is possible!).
Healthcare reform is scheduled for a vote. If it passes in its current state, it will FORCE taxpayers to pay more taxes. Much more! Since these taxes would be enacted immediately, the painful effect on an already weakened economy will be severe. WHO WILL BAILOUT THE TAXPAYER?
In addition, federal taxcuts enacted during 2001-2003 are scheduled to expire in January 2011. WHO WILL BAILOUT THE TAXPAYER?
Our founding fathers thought that "A person has the right to the fruits of one's labor" was so obvious that they didn't bother to expressly include in the Constitution. How tragic! they had no idea how rapacious and profligate our politicians would become.
Today, the most trampled "right" in America is the right to the fruits of one's labor. But what will happen when those "fruits of one's labor" are taxes away? What is left? Who will be left to pay for all the spending?
History tells us very clearly:
Every nation that has experienced a financial collapse did so because its government grew beyond the ability of its citizenry to pay for. They taxed too much, they borrowed too much and they spent too much.
Yes...much of it was done "with good intentions". In the past, those good intentions paved a path to hell. Today, however, that path to hell has become a super-highway.
Your Personal Strategy:
Find ways to cut your taxes. For decades I have taught my students that a home business is an economic necessity. I think that everyone should start a home business to add another income source to their financial situation but the second reason is that a home business can help you save thousands in taxes.
There are lots of good tax guides and you can CLICK HERE here to find one of my favorites.
In the April 2010 issue of my newsletter, PROSPERITY ALERT, I will cover some ways to save thousands on your taxes. Get a free subscription HERE.
I wish all of you continued success...
Paul Mladjenovic
Friday, March 5, 2010
THE "CORE RATE OF UNEMPLOYMENT"... IS HORSE CRAP!
Today the federal government released its unemployment report for February 2010. The official unemployment rate held steady at 9.7%. Some economists welcomed this as a sign of a stabilizing economy. Perhaps someone should tell these economists that the official unemployment rate is misleading. It is a sign of horse crap. Why?
The official unemployment rate LEAVES OUT those folks that are discouraged and have ceased looking for work. It also leaves out those that are “under-employed”; those that no longer have full-time jobs but have settled for part-time work. In other words, the official unemployment rate…
leaves out…A LOT OF UNEMPLOYED PEOPLE!
The moment an unemployed person drops out of the job search process because they are discouraged and have ceased looking, they are no longer officially counted as unemployed. They end up in a more obscure (but more accurate) statistic referred to as the “U-6” unemployment rate. In the same report, this down-played rate is over 16%!
Some of you may remember an essay I did a few years ago where I criticized the “core rate of inflation” which was an official government statistic which tracked inflation but totally left out “food and energy” from its calculation. Some humorously jabbed the core rate of inflation and described it as “the rate of inflation…excluding inflation”.
The statistical wizards at the federal government have done to unemployment reporting what they did to inflation reporting. It is time for some observers to call the official unemployment what it should be called: “the core rate of unemployment”. That way the satiric observers among us can describe the official unemployment rate as “the rate of unemployment excluding unemployment”.
Personal strategy: Unemployed or not, I think that everyone should their God-given talents and abilities to start their own business. It could be home-based and done in your spare time. Don’t just diversify your investment portfolio, diversify your time and effort with active strategies for earning money. Take a look at the audio seminar Home Business Goldmine which you can download instantly at www.SuperMoneyLinks.com.
If you have lost your job or you worry about your current job, you have the ability to generate income. A part-time home business is a great way to start. I am in the process of creating both free and low-cost resources to help folks earn money so feel free to stay informed with my developments at www.twitter.com/paulmlad.
The official unemployment rate LEAVES OUT those folks that are discouraged and have ceased looking for work. It also leaves out those that are “under-employed”; those that no longer have full-time jobs but have settled for part-time work. In other words, the official unemployment rate…
leaves out…A LOT OF UNEMPLOYED PEOPLE!
The moment an unemployed person drops out of the job search process because they are discouraged and have ceased looking, they are no longer officially counted as unemployed. They end up in a more obscure (but more accurate) statistic referred to as the “U-6” unemployment rate. In the same report, this down-played rate is over 16%!
Some of you may remember an essay I did a few years ago where I criticized the “core rate of inflation” which was an official government statistic which tracked inflation but totally left out “food and energy” from its calculation. Some humorously jabbed the core rate of inflation and described it as “the rate of inflation…excluding inflation”.
The statistical wizards at the federal government have done to unemployment reporting what they did to inflation reporting. It is time for some observers to call the official unemployment what it should be called: “the core rate of unemployment”. That way the satiric observers among us can describe the official unemployment rate as “the rate of unemployment excluding unemployment”.
Personal strategy: Unemployed or not, I think that everyone should their God-given talents and abilities to start their own business. It could be home-based and done in your spare time. Don’t just diversify your investment portfolio, diversify your time and effort with active strategies for earning money. Take a look at the audio seminar Home Business Goldmine which you can download instantly at www.SuperMoneyLinks.com.
If you have lost your job or you worry about your current job, you have the ability to generate income. A part-time home business is a great way to start. I am in the process of creating both free and low-cost resources to help folks earn money so feel free to stay informed with my developments at www.twitter.com/paulmlad.
Friday, February 19, 2010
A Trillion Dollar Reason to be Self-Sufficient
The Pew Center for the States recently issued a report that the states are cumulatively short on their promised pension benefits to current and retired workers by $1 TRILLION. This report uses data from mid-2008 so it doesn't include the fact that pension assets got hammered during late 2008 and into early 2009. This means that the financial situation is more dire than the report indicates.
If you think you are safe because you are not dependent on a state pension. Think again. Many corporate pension plans are suffering a shortfall. In addition, Social Security's shortfall is much, much greater. Millions of current and future retirees are at risk to the tune of TRILLIONS. The growing anger toward politicians is very real and very justified.
IF YOU ARE FINANCIALLY DEPENDENT ON ANYONE, YOU ARE AT RISK.
TAKE STEPS NOW TO BECOME MORE SELF-SUFFICIENT.
No matter what the speech-makers out of Washington, Wall St. and the state capitals tell you, the situation is extraordinarily serious and a humongous shortfall looms for millions in our society. There will be massive problems with virtually everyone's retirement future unless they take steps to avoid the inevitable financial pain.
I will be completing some educational programs soon to help people prepare themselves financially during the coming months and years. If you want to be alerted, feel free to follow me at www.twitter.com/paulmlad.
Let me clue you in to what you should be thinking about in general terms. At the very least, you should be developing a two-pronged approach in your financial strategies; Passive and Active.
Passive means that you should have your assets work in your favor and not against it. In prior essays (and in future) I cover the idea that the foundation of your financial assets (stocks, ETFs, etc.) should be in investments tied to "Human need". I cover this in greater detail in my financial seminar described at www.ProsperityNetwork.net.
Active means that you are using your time, effort, abilities and initiative in creating wealth such as reducing your debt or increasing your income. I think that EVERYONE should consider having a business (part-time or otherwise) as part of your over-all wealth-building strategies. Some of you already know that I have taught home business start-up seminars for over two decades. Don't forget that you are your own greatest asset.
You can find out details at www.SuperMoneyLinks.com. I do plan on providing some how-to education on topics such as starting a business and protecting your retirement assets in the near future. Keep checking back here for details and updates.
I wish all of you continued success and prosperity...we'll get through this but not without knowledge and preparation. Feel free to email me with your questions at paul@mladjenovic.com. If I can provide a resource to help you, I would be glad to.
Regards,
Paul Mladjenovic
www.ProsperityNetwork.net
If you think you are safe because you are not dependent on a state pension. Think again. Many corporate pension plans are suffering a shortfall. In addition, Social Security's shortfall is much, much greater. Millions of current and future retirees are at risk to the tune of TRILLIONS. The growing anger toward politicians is very real and very justified.
IF YOU ARE FINANCIALLY DEPENDENT ON ANYONE, YOU ARE AT RISK.
TAKE STEPS NOW TO BECOME MORE SELF-SUFFICIENT.
No matter what the speech-makers out of Washington, Wall St. and the state capitals tell you, the situation is extraordinarily serious and a humongous shortfall looms for millions in our society. There will be massive problems with virtually everyone's retirement future unless they take steps to avoid the inevitable financial pain.
I will be completing some educational programs soon to help people prepare themselves financially during the coming months and years. If you want to be alerted, feel free to follow me at www.twitter.com/paulmlad.
Let me clue you in to what you should be thinking about in general terms. At the very least, you should be developing a two-pronged approach in your financial strategies; Passive and Active.
Passive means that you should have your assets work in your favor and not against it. In prior essays (and in future) I cover the idea that the foundation of your financial assets (stocks, ETFs, etc.) should be in investments tied to "Human need". I cover this in greater detail in my financial seminar described at www.ProsperityNetwork.net.
Active means that you are using your time, effort, abilities and initiative in creating wealth such as reducing your debt or increasing your income. I think that EVERYONE should consider having a business (part-time or otherwise) as part of your over-all wealth-building strategies. Some of you already know that I have taught home business start-up seminars for over two decades. Don't forget that you are your own greatest asset.
You can find out details at www.SuperMoneyLinks.com. I do plan on providing some how-to education on topics such as starting a business and protecting your retirement assets in the near future. Keep checking back here for details and updates.
I wish all of you continued success and prosperity...we'll get through this but not without knowledge and preparation. Feel free to email me with your questions at paul@mladjenovic.com. If I can provide a resource to help you, I would be glad to.
Regards,
Paul Mladjenovic
www.ProsperityNetwork.net
Subscribe to:
Posts (Atom)
Posts
