National Debt

Democrats Playing With Tax Fire

For a few years now, Congress has been holding the Alternative Minimum Tax at bay with one-year, stop-gap measures. Without some action by Congress, a whopping 23 million Americans will be subject to the tax.

The Alternative Minimum Tax which will target anyone with an income over $50,000, forces people to recalculate their income tax and pay the greater of their normal calculation or the aptly named Alternative Minimum. Democrats, at a cost of $1 trillion dollars over the next 10 years, are seeking to raise the $50,000 figure to $200,000 or even $250,000.

Sounds great, but under rules Democrats have imposed on themselves, any cut in taxes must be offset by either a cut in spending or another tax. This is where 'playing with fire' comes in to play. To erase a hidden tax that most people don't know about, Democrats will need to either dramatically cut spending or create a new and much more visible tax to replace it.

Specifics are still thin as to suggestions to offset the revenue loss. You can be sure that any alternative tax will have a hard time getting through the Senate where Republicans are sore about Democrats allowing Bush's Tax Cuts to lapse.

Expect Democrats To Give Bush More Iraq Money

Early next year, as previously reported here, president Bush will go to Congress for some $100 billion to support operations in Iraq and Afghanistan. This money, being outside the budget, goes straight to the national debt.

If you are hoping that the newly democratic congress, elected on the slogan "a new direction for Iraq," will deny the request, think again:

Senior Democrats, who take control of both houses of Congress next year, have indicated they would support additional funds for U.S. troops in Iraq and Afghanistan, even though many want a phased Iraq withdrawal to begin in 2007.

If the extra $100 billion is approved, it would bring the total Pentagon budget for 2007 to $547 billion dollars. That figure is likely to be very close to what the entire rest of the world will spend during the same period.

More Money For Iraq

Defense Secretary Donald Rumsfeld and the U.S. commander in Iraq, General George Casey, are seeking "at least $1 Billion" to expand the size of Iraqi forces and to "accelerate the training and equipping" of those forces.

This additional amount is only part of an unspecified sum the Bush Administration will seek to add to the 2007 Budget.

If I am not mistaken, we have already spent north of $300 Billion on the Iraq war -- which was supposed to cost nearly an order of magnitude less. How is it that the Iraqi government, with all its oil, cannot afford this themselves?

We are throwing more money behind a government that is growing increasingly hostile and is actively thwarting U.S. security efforts. Yesterday, Prime Minister al-Maliki ordered the removal of checkpoints around the Baghdad suburb know as Sadr City, home to a significant Shi'ite militant population.

Sadr City is the base of the country's most feared militia, the Mahdi Army, which answers to Shi'ite cleric Moqtada al-Sadr. Sadr's strongly anti-American bloc is the largest in the Shi'ite governing coalition and was instrumental in making Maliki prime minister five months ago.

GAO Head Pleads For Common Sense

"This is about the future of our country, our kids and grandkids. 'We the people' have to rise up to make sure things get changed." - David M Walker, Comptroller General of the United States.

Walker is the head of the Government Accountability Office, part of Congress that audits the Federal Government.

His concerns: the state of the Federal Budget, the rising National Debt, the trillions in undeclared debt.

These are not sexy issues, and more importantly, they are issues that many people do not to understand:

Polls suggest that Americans have only a vague sense of their government's long-term fiscal prospects. When pollsters ask Americans to name the most important problem facing America today - as a CBS News/New York Times poll of 1,131 Americans did in September - issues such as the war in Iraq, terrorism, jobs and the economy are most frequently mentioned. The deficit doesn't even crack the top 10.

Chinese Bring Patent Suits In U.S. Courts

Bring war material with you from home, but forage on the enemy... use the conquered foe to augment one's own strength.
-Sun Tzu, the Art of War

As China's economy continues to grow at an amazing 11%, Chinese companies are starting to flex their muscles outside there own borders. First content to settle, circumvent, or lose and move on in patent suits, they're now ready to bring the battle to American companies.

This year, Netac, a manufacturer of computer flash memory products based in Shenzhen, China, brought a patent suit against a New Jersey rival in a federal court in Texas, in what is believed to be the first time that a mainland Chinese company has sued an American one for patent infringement.

Budget Deficit Growing Out Of Control

Most parents and grandparents wouldn't even consider buying a house or a new car and forging the signatures of their children and grandchildren on the loan and mortgage agreements.

That choice lede comes from Minnesota's (a red state) Mankato Free Press and expresses the absurdity at the heart of the Federal Budget.

U.S. Federal Budget Far Worse Than It Seems?

According to this USA Today article, the relatively bad $318 billion dollar deficit for 2005 would really be $760 billion if the Federal government were held to the same standards as public corporations.

Why the discrepancy? It seems it is mostly a matter of liabilities:

Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

The article goes on to say that if the figures included to decline of Social Security and Medicare, the actual deficit would be closer to $3.5 trillion.

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