Is it Email or Parasitic Public Sector Labor Unions that are killing the US Postal Service?

See: Postal Service Is Nearing Default as Losses Mount

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

The suggestion that the postal service is losing money to Email is difficult to accept, especially looking at the great heaping gobs of junk mail that are stuffed into my mailbox every day. There is so much crap (Snail-Mail Spam) that is sent to me in the mail that I have at times tossed out mail that was important to keep because it was lost in the great wads of ads and "dear occupant" mail. Is there really anyone out there that is getting "less" mail sent to them they have received in years past?

The US Postal Service is being bled to death by the parasitic Public Sector Unions that have put the service on the brink of bankruptcy. The parasitic Public Sector Unions are negotiating with elected politicians and or government bureaucrats that are beholding to elected politicians for a piece of the the public treasury. These elected politicians are also beholden to the parasitic Public Sector Unions for campaign contributions and for votes. It is base political corruption pure and simple.

The end result is inevitable. The public treasury runs out of money and the parasitic Public Sector Unions scream for more and more and . . . But there is no more money left for them to loot.

The US Postal Service can only be saved by reducing it's Labor cost to something in the range of what its main competitors, UPS and FedEx, have to work with. The only way that will happen is to eliminate the parasitic Public Sector Unions entirely. They must be done away with. They are incompatible with Democracy.

No Blank Checks For Obama

See: Speaker Boehner's Debt Ceiling Speech

Speaker Boehner tells President Obama to get stuffed.

The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.

You see, there is no stalemate in Congress. The House has passed a bill to raise the debt limit with bipartisan support. And this week, while the Senate is struggling to pass a bill filled with phony accounting and Washington gimmicks, we will pass another bill - one that was developed with the support of the bipartisan leadership of the U.S. Senate.

Obviously, I expect that bill can and will pass the Senate, and be sent to the President for his signature. If the President signs it, the 'crisis' atmosphere he has created will simply disappear. The debt limit will be raised. Spending will be cut by more than one trillion dollars, and a serious, bipartisan committee of the Congress will begin the hard but necessary work of dealing with the tough challenges our nation faces.

The problem is not on the revenue side. It is on the spending side.

Raising taxes only robs the productive of the means and the reason to produce.

Raising spending only feeds the addiction of the looter's to other people's money.

Raising the Debt Limit only increases the already unmanageable levels of debt that are being passed on to future generations.

We might be better off to just shut it all down.

Obama’s Tax Obsession

See: Explaining Obama’s tax-hike obsession

But Obama’s tax obsession becomes understandable when you realize the long game he’s playing: Big Taxes to fund Big Government. Decade after decade. See, it’s an almost universal belief among left-of-center journalists, economists, policymakers and politicians that Americans must pay higher taxes in coming years to cover the medical expenses of its aging population – not to mention all sorts of brand new social spending and green “investment.” Dramatically higher taxes. On everybody. And if we have a debt crisis, maybe those tax increases come sooner rather than later.

And why not? Look at how high taxes and high spending have made Greece such an economic giant.

See Also: Why The Democratic Party Is Doomed

This week’s fight over raising the federal debt limit exposes a key weakness in the warfare-welfare state that has bestowed power onto the Democratic Party: Without an ever-growing share of the economy, it dies. Every vital element of the Democrats’ coalition — unions, government workers, government contractors, “entitlement” consumers — requires constant increases in payments, grants and consulting contracts. Without those payments, they don’t sign checks to re-elect Democrats.

Are we having fun yet?

Eat The Rich!

See: Get Ready for a 70% Marginal Tax Rate

But wait, things get worse. As Milton Friedman taught decades ago, the true burden on taxpayers today is government spending; government borrowing requires future interest payments out of future taxes. To cover the Congressional Budget Office projection of Mr. Obama's $841 billion deficit in 2016 requires a 31.7% increase in all income tax rates (and that's assuming the Social Security income cap is removed). This raises the top rate to 52.2% and brings the total combined marginal tax rate to 68.8%. Government, in short, would take over two-thirds of any incremental earnings.

How hard would you work if you were only able to keep 30 cents of every dollar that you earned?

Should Doctors Be Allowed To Refuse Obama-Care Patients?

That is a question that will become a hot topic in our political culture very shortly.

See: U.S. Plans Stealth Survey on Access to Doctors

The administration says the survey will address a “critical public policy problem”: the increasing shortage of primary care doctors, including specialists in internal medicine and family practice. It will also try to discover whether doctors are accepting patients with private insurance while turning away those in government health programs that pay lower reimbursement rates.

Can the government force Doctors to accept Obama-Care patients? (What would or could stop them?)

Should the government force Doctors to accept Obama-Care patients? (Only thugs and thieves would say "Yes.")

The only alternative that the government has in getting Obama-Care patients to be readily accepted by Doctors is to have a payment schedule that is competitive with private insurers. That "jus' ain't a gonnah happen." The costs would be astronomical, just like all of the Obama-Care critics have been saying from day one. Forcing Doctors to accept Obama-Care patients would allow the leftist political class to pretend that their medical care scheme will work, at “cheaper” costs. (But only for a short time.) Of course, finding any doctor after that point will be a whole different problem.

Then the question that will be debated in the political sphere is whether or not government can prevent Doctors from quiting or retiring.

UPDATE [June 28, 2011 - 22:49]

See: Surprise: HHS drops plan to snoop on doctors

See: Program to Use Mystery Shoppers to Probe Doctors Scrapped

See: Kirk asks Obama administration to reconsider 'stealth' doctor survey

The Congressman has some interesting questions for Kathleen Sebelius. Among them:

2) Please provide records of how the National Opinion Research Center (NORC) of Chicago, Illinois, won a federally competitive bid to carry out this work.

It is an interesting question.

Hat Tip to Hot Air for the Update links.

Recession or Depression?

See: Why the Jobs Situation Is Worse Than It Looks

The Great Recession has now earned the dubious right of being compared to the Great Depression. In the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000. From the moment the Obama administration came into office, there have been no net increases in full-time jobs, only in part-time jobs. This is contrary to all previous recessions. Employers are not recalling the workers they laid off from full-time employment.

Keep a copy of Zuckerman's article tabbed in your files.

Why the sudden downturn in the Oil Markets?

Shortly after the Seals capped Osama's ass, the Oil Markets crashed.

Was there a connection?

Maybe not.

From: SPECIAL REPORT - What really triggered oil's greatest rout

A range of factors, both economic and political, were also at play. The recent rise in raw goods has been fueled in part by the U.S. Fed pumping cash into the markets by purchasing $600 billion in bonds. This program has pushed interest rates extraordinarily low, making borrowing essentially free once adjusted for inflation. Investors have been using the super-cheap money to buy into commodity markets. But the Fed's program is slated to end on June 30.

"Funds were likely to take profits before June when the direct (Fed) bond purchases stop. All were eyeballing each other to see who would take profits first," said a London-based oil trader.

It was a government made Oil bubble.

Osama Gives No Bump To Obama

See: Bin Laden Death Will Not Boost Obama: Expert

“The immediate reaction in the US notwithstanding, 'normal business' will soon be resumed in US politics. There will be no change on the fiscal/debt polarization and contrary to some commentators' reaction, definitely no election boost for Obama,” said Newton in an interview with CNBC on Tuesday.

Barbara Walters and many others in the media may think that the killing of Osama will boost Obama's re-election chances. There hopes are only a reflection of their fears. Obama is in so much trouble that they are desperate to grasp at anything.

There will be no lasting boost for Obama*. By election day, Osama will be all but forgotten.

The Democrats own the economy. The voters will be thinking about the lack of work and the rising price of gas and food when they think about Obama from now till election day. Osama will be an afterthought at most.

Obama, it's the economy, stupid.

~~~

* You can watch the Rasmussen Daily Presidential Tracking Poll as the numbers begin to show peoples opinion of the president in the days after the Osama killing. I expect a small bump, but one that is so small and temporary that it could easily be confused with noise. A week from now, Obama's numbers will be as bad as they are today, if not worse.

From the May 3rd Report

Daily updates are based upon nightly telephone interviews and reported on a three-day rolling average basis. As a result, two-thirds of the interviews for today’s update were conducted before news was released about the death of Osama bin Laden. Thursday will be the first update based entirely upon interviews conducted after that event. Results from the single night of data collected on Monday shows a modest improvement in the president’s Approval Index rating. However, there was no improvement in the president’s overall approval rating. Caution should always be used when interpreting a single night sample from a tracking poll.

Wheelbarrows of Dollars against Barrels of Oil

If you pull a dollar out of your pocket, you can almost see it shrink before your very eyes.

See:Don't Like a Weak Dollar? Might as Well Get Used to It

Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.

Oil is a commodity. Oil is fungible. The value of the dollar will affect the dollar price of a barrel of oil.

$15.00 Movie Tickets And Declining Movie Theater Attendance

See: Warner Bros Wins 2010 Film Market Share; Year's Box Office Grosses Not A Record; Overall Movie Attendance Down Sharply; Should Studios Slash Number Of 3D Pics?

I like going to the movies. There is something magic about seeing a movie on the large screen. I like to sit near the front where the image on the screen fills your whole field of vision. With the sound up loud and surrounding you, you can shut out everything and put yourself in the movie.

Last weekend, I bought a ticket to see Tron: Legacy. I enjoyed it. Jeff Bridges overacts a bit. I don't know if that is Jeff's fault in this picture of it is the director's fault. The story was interesting. (It had elements of the "constrained" weltanschauung to it which was unexpected.)

What I did not like was the $15.00 price for a single ticket. What the (****) is Hollywood thinking? At that price, I will be spending fewer of my dollars at the movie theater. It is a hell of a lot cheaper to wait a few months and buy a DVD in the bargain bin somewhere then it is to shell out that kind of money for the "theater" experience.

At half the price of the ticket, I would have recommended that my friends go see Tron: Legacy in the theater. At $15.00? Screw that. I will tell them it is worth digging out of the bargain bin when they find it, but I won't recommend that anyone spend $15.00 to see it in the theater.

I make a hell of lot more money now then I did back when I was a teenager. I used to be able to afford to go to the movies on my weekends. Not anymore.

Obama And The Politics Of Failure

An interesting question from the other side of the pond.

See: The great Obama-Axelrod-etc. mystery

Here's one of the big questions, really, one to chew on over the weekend, one that's asked a lot around this town. How could a bunch of people who ran such a brilliant campaign be doing such a lousy job at the politics of governing?

The answer is actually very simple.

Obama and his team have successfully rammed through a number of measures through the congress that would, and will, fundamentally change the nature of our government and our relationship with it.

Obama's plummeting popularity is a consequence of his political success.

Confusing President Obama's popularity with his political success is a mistake. He has been very successful. Obama is very unpopular now because of his political successes.

Of Riots And Renting Votes With Borrowed Money

See: The disintegration of the welfare state

Democracies produced Nazi Germany and Fascist Italy, fulfilling the expectation of Socrates and Machiavelli that democracies end in tyranny. Now democracies are fulfilling the complementary expectation of Nobel laureate economist Milton Friedman that democracies end in bankruptcy. Put a democracy in charge of the Sahara, Mr. Friedman once said, and sand itself will become scarce. Democracies are indeed profligate trustees – or have been for the past 30 or 40 years. Mr. Friedman’s primary fret, though, was the tendency of democracy to centralize political and economic power in the same hands. Most critiques of democracy reflect this elemental distrust. “Democracy is two wolves and a lamb,” Benjamin Franklin reputedly said, “voting on what to have for lunch.”

Democratic self-deprecation isn’t quite as funny as it once was. Mobs have already taken to the venerable, iconic streets of European states, notably among them Greece, birthplace of Athenian democracy. It’s apparently easier to give wealth away than it is to take it back. Democracy assembled the welfare state peaceably enough. Can democracy dismantle it as peaceably? No, it can’t. The mobs are not finishe

d.

Further down in the article is this gem:

“The adoption of Keynesian analysis provided politicians with a rationale for borrowing money to buy votes.”

And here we in the US find ourselves, much as our cousins on the other side of the Atlantic do, broke and deep in debt.

The trouble stems from the fact that you can't really buy a person's vote. At best you can only rent it, one election at a time.

It doesn't take a degree in economics to understand that borrowing money to pay a rent is madness.

Not that madness seems to bother politicians much.

And where will it all end?

Democracies have made people more dependent on the state than any humanitarian necessity required. For Italy, and for other democracies, the worst is surely yet to come. Already, hundreds of thousands of middle-class people have thronged the streets of Paris and Rome, of Milan and Sarajevo, of Reykjavik and Bucharest (where demonstrators stormed the presidential palace, an insurgent act that evokes the spectre of revolution). The World Socialists’ website proclaims an age of rage ahead – and chillingly quotes British historian Simon Schama: “You can smell the sulphur in the air.”

Fun times ahead my comrades. Fun times indeed.

More Oil Rigs Preparing to Leave The Gulf

See: Diamond Offshore Drilling Announces New Term Floater Commitment

Devon was one of three operators of Diamond Offshore rigs that invoked a force majeure clause in their contracts, claiming that the drilling moratorium would prevent the rigs from working. Diamond Offshore said late last month that it does not believe a force majeure exists under the terms of those contracts and is working with its customers to assess each situation.

[Emphasis is mine-Syrah]

This was at the bottom of a Wall Street Journal article published on the 9th.

Democrat President Obama's disastrous handling of the oil spill, particularly in his strange and oddly tenacious attempts to shut down all deep-water drilling in the Gulf, will have long term consequences for the US and for the world.

Its a big planet. Those oil rigs can be moved anywhere in the world. We are very likely to see a number of them end up off the coast of Brazil much to the benefit of Petrobras and its investors.

The US can profit from the Oil in its territories, or not. It looks like Obama and the Democrats would prefer that the US is made even more dependent on foreign sources of oil.

Is There A Soros Connection To The Offshore Drilling Moratorium?

From: The Drilling Ban Is Soros' Bonanza

If the moratorium stands and energy prices rise, the only ones to profit will be foreign-owned companies such as Petrobras and investors such as George Soros, who has an investment in the oil giant in the neighborhood of $900 million. Yes, the same George Soros who also is a major investor in the Democratic Party and President Obama's 2008 campaign.

Soros would love to see domestic offshore drilling shut down and those three dozen deep-water rigs sitting idle shipped off to the coast of Brazil. He has a huge investment in both Petrobras and the Democrats. He expects a return on all his investments.

While we track the trail of oil gushing from Deepwater Horizon, we should also follow the money that will be gushing into George Soros' bank account, courtesy of the U.S. government and the American taxpayer.

What purpose does the Offshore Drilling Moratorium serve?

[Additional]

From: Moratorium Won’t Reduce Drilling Risks

Nor is it clear, if the moratorium went into effect, the pullback would be all that temporary. For one thing, the moratorium is contingent on a special commission making yet more safety recommendations in six months, but there is no guarantee they’ll be done by then. Meanwhile, there are only so many floating rigs in the world, and Brazil, for instance, has just embarked on a $200 billion drilling program. (You read that right: $200 billion.) It takes a month to move an idle rig from the Gulf of Mexico to Brazil, where it will likely stay for years. So a six-month moratorium would quite likely have far greater effect on American oil production that it would seem at first glance.

So again,- What purpose does the Offshore Drilling Moratorium serve?

[Additional]

From an article in the Wall Street Journal, published in August of 2009.

See: Obama Underwrites Offshore Drilling

The U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.

The U.S. Export-Import Bank tells us it has issued a "preliminary commitment" letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.

And again we should ask, - What purpose does the Offshore Drilling Moratorium serve?

[UPDATE - Monday, June 28th, 2010 - 13:00]

Wow.

JCM at Correspondence Committee just pointed me to a post that he put up on this subject back on Saturday the 19th.

See: c2 saturday a.m. BULLDOG

I don't think any of this was planned. Obama is relying on process instead of action. A process which bolsters his contention that fossil fuel is bad, and that we need huge "investments" (read taxes) to get to alternative energy sources.

The drilling moratorium sounds like "action" but again is process, a process which directly or indirect benefits some of his closest advisors.

The advice he is getting is both process oriented, and tainted.

The result is not fixing the problem, but supporting other agendas. I do not believe it is a conspiracy in that there was or is a "plan." It is like with much of the left a "distributed conspiracy" that a bunch of individuals with similar goals, working each on their own little piece to push events in a way that matches their worldview.

A perfect storm of events, personalities, ideologies, and agendas driving the outcome toward what they prefer.

I agree. Not a conspiracy so much as tainted advice and the natural outcome of a group of people working from a shared world-view.

There is also a lot at stake.

I think that we should keep all of this in mind along with the tenacity the Administration has displayed in its efforts to keep the Moratorium in place, even after it has been overturned by a federal court.

What purpose does the Offshore Drilling Moratorium serve? Why the urgency to reinstate it?

The Pending Crisis And Growing Analogies To Greece

From the “Are we having fun yet?” files comes this bit of happy commentary from Former Federal Reserve Chairman Alan Greenspan.

See: Greenspan Says U.S. May Soon Reach Borrowing Limit

“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

Greece?

That will suck.

How is that "Hope and Change" working for you?

It seems it ain't working so well for Obama's "progressive" supporters.

See: Progressives Ask: Is It Obama, Or Is It Us?

Left-wing activists described the year leading up to Barack Obama's election as exhilarating, empowering and exciting.
Now, if you ask progressives gathered for the America's Future Now conference in Washington, D.C., about the first year and a half of his presidency, they say:

"Frustrating."

"Sobering."

"Brutal."

At least, those were the reactions of, respectively, union activist Nick Weiner, University of Minnesota political science professor Dara Strolovitch, and Steve Peha, who heads an education reform consultancy.

"I had hoped for something different," Peha explains. "I had hoped for the president who ran for office, and not so much the one who's in office."

Peha says he's a pragmatist -- he knows that campaigning and governing are different. But "what I wish is that President Obama had worked a little less for his ideal of bipartisanship and a little more for the people who elected him," he says.

This is the prevailing feeling at this week's America's Future Now conference. And no one is hiding it.

There are several things to remark upon here.

One, the Obama administration has easily been the most partisan administration that this country has suffered through since Johnson. His "take it or leave it" strategy for ramming through his health-care scheme is example enough of that. On that charge, the progressives are talking out their ass. They wouldn't know what "bipartisanship" was if it reached across the isle and slugged them.

Two, Obama is the most progressive President this country has had since Woodrow Wilson. Again, his health-care scheme is proof enough of that. We could also talk about his high tax policy and his regulatory policy per Cap and Trade. Then there is that whole financial crises fiasco created by the progressive geniuses Barney Frank and Chris Dodd that Obama managed to make much worse. He even seized control of GM for goodness sake. GM is now a government run enterprise strait out of the Mussolini play book. What do the progressives want! Any more progressive and and this administration would be considering controlling political speech by taxing internet news aggregators or bringing back the "Fairness Doctrine" to radio.

Three, Obama cannot realistically satisfy his hard left supporters. These are the people on the fringe of reality, more inclined to look at working through the constraints of the law and the constitution as backsliding and evidence of a spiritual weakness. These people were going to turn on him no matter what. That doesn't mean that we can't enjoy the schadenfreude while watching his own snakes turn on him.

Heh. . . Here is some "Hope and Change" good and hard you "progressive" dip-shits.

An Economic Collapse in 2011?

Art Laffer discusses the predictable results of raising taxes.

See: Tax Hikes and the 2011 Economic Collapse

On or about Jan. 1, 2011, federal, state and local tax rates are scheduled to rise quite sharply. President George W. Bush's tax cuts expire on that date, meaning that the highest federal personal income tax rate will go 39.6% from 35%, the highest federal dividend tax rate pops up to 39.6% from 15%, the capital gains tax rate to 20% from 15%, and the estate tax rate to 55% from zero. Lots and lots of other changes will also occur as a result of the sunset provision in the Bush tax cuts.

Tax rates have been and will be raised on income earned from off-shore investments. Payroll taxes are already scheduled to rise in 2013 and the Alternative Minimum Tax (AMT) will be digging deeper and deeper into middle-income taxpayers. And there's always the celebrated tax increase on Cadillac health care plans. State and local tax rates are also going up in 2011 as they did in 2010. Tax rate increases next year are everywhere.

Now, if people know tax rates will be higher next year than they are this year, what will those people do this year? They will shift production and income out of next year into this year to the extent possible. As a result, income this year has already been inflated above where it otherwise should be and next year, 2011, income will be lower than it otherwise should be.

We are more broke then we know.

Economics is an exercise in dynamic behaviors. People change their spending, investing and working behaviors when the tax code is changed. They will make decisions with the purpose and intent of keeping as much of their money as possible.

Expect people to behave rationally, even if that means working less because they can keep less of what they earn.

Hat tip: LuciusSeptimius @ Correspondence Committee

Public Employees Unions & Bankrupt Governments

We may soon see a wave of city and county governments file for bankruptcy in the near future. Bankruptcy gives the local municipal governments the means to deal with a significant source of their problems with their budgets.

See: Bankruptcy talk spreads among Calif. muni officials

Despite its stigma, bankruptcy has paid an important dividend for Vallejo: It has forced public employee unions to the negotiating table, providing city leaders an opportunity to rein in compensation, which city officials said accounts for more than three-quarters of Vallejo's general fund spending. City Councilwoman Stephanie Gomes said the effort has led to concessions from three of four city unions.

Like Vallejo, Los Angeles is suffering from weak revenue at the same time the cost of its pensions and other retirement benefits are rising. Former Mayor Richard Riordan said those factors put the government of the second largest U.S. city on track to declare bankruptcy between now and 2014.

Riordan sees bankruptcy as a necessary tactic for squeezing concessions from the city's public employee unions. It could also pave the way for 401(k) retirement accounts for new city workers instead of defined pension benefit plans with escalating costs, he said.

"The threat of bankruptcy is really the only way you're going to get them to make major changes," Riordan recently told Reuters.

The public employee's unions are the most powerful lobbies in existence. They own most (particularly the blue) local governments, lock, stock and barrel. They are an organized block of votes and campaign contributions that dominate local elections. They get their people out to vote. They control huge heaping gobs of money that get donated to (almost exclusively Democrat) campaigns. They are the deciding factor in blue districts. They own them.

The end result? The municipalities that have been generous with the compensation packages that they have given to their public employees unions are now broke. There is little or nothing left in the private sector to loot. Their economies are in the toilet, the rich are fleeing the state, and the low end private work force that remains earns next to nothing and pays next to nothing in taxes.

In such circumstances, filing bankruptcy can look like a good idea.

Too bad it won't work.

Dealing the unions a setback only leaves them in place to again manipulate elections so that they can again vote themselves ever larger portions of the public purse. So long as Public Employee Unions are able to influence local politicians, they will own those politicians. Nothing will really ever change.

~

See Also: Soak the Rich, Lose the Rich

We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state. Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place. This is why high income-tax states have such a tough time creating net new jobs for low-income residents and college graduates.

See Also: Best and Worst States for Business 2010

How is it that the nation’s most populous state at 37 million, one that is the world’s eighth-largest economy and the country’s richest and most diverse agricultural producer, a state that had the fastest growth rate in the 1950s and 1960s during the tenures of Democratic Governor Pat Brown and Republican Governors Earl Warren and Ronald Reagan, should become the Venezuela of North America?

Californians pay among the highest income and sales taxes in the nation, the former exceeding 10 percent in the top brackets. Unemployment statewide is over 12.2 percent, higher than the national average. State politics seems consumed with how to divide a shrinking pie rather than how to expand it. Against national trend, union density is climbing from 16.1 percent of workers in 1998 to 17.8 percent in 2002. Organized labor has more political influence in California than in most other states. In addition, unfunded pension and health care liabilities for state workers top $500 billion and the annual pension contribution has climbed from $320 million to $7.3 billion in less than a decade. When state employees reach critical mass, they tend to become a permanent lobby for continual growth in government.

Are we having fun yet?

Hillery Clinton Talks About Brazil As A Taxation Model

See: Clinton: 'The rich are not paying their fair share'

"Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what — they're growing like crazy," Clinton said. "And the rich are getting richer, but they're pulling people out of poverty."

Both Clinton and Obama campaigned for president on promises to allow the Bush tax cuts for wealthy Americans expire this year, a plan that is now part of Obama's budget. The move will effectively raise taxes sharply on people earning more than $250,000.

Hillery is clearly suggesting that Brazil's high tax rate is the reason that its economy is growing.

Brazil may have a high tax rate, but it also largely avoided the banking disaster that has put many other western nations on the brink of bankruptcy.

See: Lessons from Brazil: Why Is It Bouncing Back While Other Markets Stumble?

But all of Brazil's banks can be thankful that, to a large extent, they haven't had to deal with the toxic assets that crippled banks in developed countries. Unlike their counterparts elsewhere, Brazilian banks were not as exposed to the property sector and credit derivatives, and financial soundness indicators were robust coming into the crisis, according to Fabio Barbosa, head of Banco Santander Brasil and the Brazilian Federation of Banking Associations (Febraban). He cites the high capitalization requirement as a key reason for the sector's resilience -- the minimum capital adequacy requirement in Brazil is 11%, compared with 8% under the Basel regulations that other banks around the world follow. In December 2008, the average ratio for the sector in Brazil was 20%, and for the country's five largest banks (accounting for 67% of total assets) the ratio was 18.5%. He adds that Brazil also didn't have a shadow financial system, like in the U.S., thanks to tight regulatory and supervisory oversight. All financial institutions (including investment banks) are under the watch of the Central Bank.

One of Brazil's biggest advantages is that it did not have a Barney Frank or a Chris Dodd plundering it's banking system to redistribute wealth.

Comparatively, with the rest of the western world seeing their future play out for them in the street riots of Greece, Brazil is doing pretty good. It could do even better.

High tax rates reduce the private sectors ability to raise money for new projects, new ideas, new services, and new businesses. If Brazil were to reduce its tax rake to a lower level, productivity in their private sector would likely increase, which ironically enough, would also increase the amount of tax revenue that the government would be able to take in. Increasing the opportunity for the private sector to make money also increases the potential amount of taxable revenue that can be collected.

Conversely, if Brazil were to increase its tax rake even more than it is at present, it could expect to see an eventual decline in private sector productivity. Lower profits would reduce the amount of taxable revenue that the government could then skim out the publics pockets.

There is a point at which the tax rates can be raised high enough that the result would be reduced tax revenue to the Government. Right now, Brazil is in a boom period. They are making money. The high tax rate is not the reason that they are making money. It is just a factor that businesses in Brazil have to deal with, a hindrance that they have to overcome, a red-line that they have to pay for in their books.

In time, as their economy matures, that high tax rate of theirs will become more of a problem. Their politicians will either have the wit and the will to lower their tax rates which will increase profits and tax collections, or they will squeeze the public even harder with even higher taxes, which will reduce profits and reduce tax collections.

But to think that Brazil has somehow managed to tax itself into prosperity . . . is nuts.

Raise Taxes Or Cut Spending – Two World-views

Democrats in California have put together a plan to tax California out of their spending problems. They can't afford what they have promised, so they will take more from the productive to finance their shortfall.

See: California Democrats unveil tax-increase package

The plan by state Senate Democrats would raise $4.9 billion by raising California's vehicle registration fee, suspending corporate tax breaks scheduled to begin next year and boosting the state's tax on alcoholic beverages.

Democrats control both chambers of the state's legislature and have said they would seek new revenue to help plug the shortfall.

Republican Governor Arnold Schwarzenegger, by contrast, has ruled out tax increases and is relying largely on deep spending cuts in his plan for balancing the state's books. He has called for $12.4 billion of cuts and would scrap the state's welfare system, a plan Democrats have rejected.

Arnold Schwarzenegger's approach would be to cut spending as the best means to solve the state's spending problem. Arnold may not be the best representative of Republican philosophy, but in this example, he does so well.

For Democrats, raising taxes to solve an over-spending problem is the right thing to do because of the good intentions that drive their want to spend. They really do believe that raising taxes on the productive is a good way to support the poor and the disadvantaged that they want to help.

For Republicans, raising taxes to solve a spending problem is a little bit to much like shooting up with heroin in order to solve a drug problem. Its nuts. It only makes things worse. Reducing the incentive for the productive to produce will not only reduce how many people that the productive can employee, but it will also reduce the amount of profit that they will have that can be taxed. Everybody loses.

The road to hell is paved with . . .