Mr. Obama’s engrossment with raising taxes on higher income earners has eclipsed the point of obsession and resembles a man either possessed by demons or one who is so completely bereft of economic sense that he should be examined by medical professionals for competance. His vindictiveness and pernicious attitude toward an unaffiliated group of successful people has been represented as a cure for what has beset the economy as well as the national deficit, so a common sense and simple representation of this apparent derangement is critical. Consider this:
The two most wealthy men in the country are Warren Buffett and Bill Gates. Depending upon the source it is reasonable to estimate their collective net worth at 100 Billion dollars. If those two me were to DONATE their entire net worth toward repayment of the national debt it would decrease by six tenths of one percent. Mr. Obama and the media would like everyone to drink like mother’s milk the concept that all our problems would dissolve if those awful people in the virtual rich club he maintains exists would simply pay “their fair share.”
The top 1% of wage earners already pay nearly 40% of all taxes, so unless one possesses a room temperature IQ it must be apparent that a much bigger problem exists, and believe me it does.
The national debt is not the hoo-doo-voo-doo item the media has always suggested it is, and I will put it into perspective. The Gross Domestic Product (GDP) was roughly 10 Trillion when President Bush took office and the national debt was approximately 6 Trillion. That is analagous to making $100,000.00 per year and having a $60,000.00 mortgage. Yes, there is debt, but it is without question a manageable debt.
That ratio has remained in tact for much of the past generation, but elevated during the Bush administration as a function of two things: the unexpected events of September 11, 2001, and the fact that the Bush Administration had to make up for 8 years of Mr. and Mrs. Clinton systematically neutering the military budget for 8 years. Nonetheless, the debt remained “manageable.”
In less than three years of Mr. Obama’s administration, the national debt is now commensurate with the GDP. In simple terms, it has more than doubled in three years to a point that the GDP AND national debt now rest at $15 Trillion each. When, not if, the income drops below the national debt, and it borders on that precipice as I type, the downward sprial becomes a vortex, a Bermuda Triangle, from which nothing can escape.
More on that another time.
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In the interim, consider this: All of Wall Street was unable to raise between 800 Million and One Billion for American Airlines during the most recent three months, and that venerable airlines filed a reorganization plan under Chapter 11 earlier this week. Gates at major airports are actually huge assets that appear on the balance sheets of all major airlines, and American was willing to mortgage those valuable slots as well as re-mortgage their planes in order to bring about this financing and “The Street” said no. There wasn’t enough interest in that particular risk, for American has assets of roughly 22 Billion, Liabilities of 29 Billion, and with that type of ratio, it was assumed the “vortex” would soon suck the company into utter darkness. Maybe yes, maybe no, although I’m betting on the latter.
Regardless, companies leveraged like American Airlines have overcome steep odds before and stock market success is based upon one’s ability to gauge odds. Meanwhile, Solyndra received 535 MILLION from Mr. Obama without so much as a revenue stream.
All of these observations mean nothing unless Congress quits promising and spending more than you or I can promise or spend and still maintain ownership of our homes.