On the BorderLine » Economics http://www.ontheborderline.net Tu ne cede malis sed contra audentior ito. Defending the constitution from government intrusion where ever it may be lurking. Wed, 28 Jul 2010 00:10:46 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Hillary Spews Her Sophistry (again) http://www.ontheborderline.net/hillary-spews-sophistry/ http://www.ontheborderline.net/hillary-spews-sophistry/#comments Fri, 28 May 2010 15:01:23 +0000 donttreadonme http://www.ontheborderline.net/?p=6748
Hillary Spews Her Sophistry (again)

Sophistry: a plausible (to an ignoramus) but erroneous (seriously, in this case) argument.

Thunder thighs said this recently:

The rich are not paying their fair share in any nation that is facing the kind of employment issues that confront the United States and other nations, whether it is individual, corporate, whatever the taxation forms are.

Then she offered up an example. Brazil has the highest tax-to-G.D.P. rate in the Western hemisphere. And guess what? Its growing like crazy. The rich are getting richer, but they are pulling people out of poverty. There is a certain formula there that used to work for us until we abandoned it to our regret, in my opinion. My view is that you have to get many countries to increase their public revenues.

Someone needs to inform this ignorant nitwit that real economic growth-real wealth creation-is not and cannot be created merely by increasing the level of confiscatory taxation on whomever you deem as “rich.” The only thing that grows under that misguided paradigm is government and those beholding to more and higher degrees of redistribution.

If what Mrs Clinton is actually referring to is more government employment, well then let’s run the table and define the “rich” as anyone who earns more than $99,999, and tax them at 100% of their earnings over this imaginary point of total sufficiency.. Let’s just see what happens, shall we?

In reality, increased levels of confiscatory taxation impel the propensity for government employment, and government entitlements, to grow, and for more and more far reaching control over the lives of individuals and businesses. But such is only a short run effect, in the long run you actually end up not with Brazil, or with sustainable full employment, but rather Greece! That’s the real axiom, madame. That is the actual lesson of history. Ignore it at your (and sadly, our) peril.

As for Brazil.. please. Here are the actual tax rates for Brazil: http://www.worldwide-tax.com/brazil/brazil_taxe…

Something tells me this is not what Mrs Clinton is advocating for here (essentially, Reaganomics). She is merely commenting on the Brazilian effects of essentially implementing laffer-curve taxation, but this is nothing to crow about nor can it be the cause of whatever real wealth creation is taking place in Brazil. The mere fact that their “tax to GDP” is relatively high is a non-sequitur.

Hillary would never admit this, but the fact of the matter is that lowered marginal tax rates (please note that dividend income is not taxed in Brazil) coupled with taxing low income people (which she would never advocate for here in the U.S.), has resulted in significant inflows of earned income to the state. While a greedy statist might see this as virtuous, anyone with an iota of respect for individual rights sees this as an abomination. It was an abomination when Reagan and the Bush’s promoted it, it is an abomination in Brazil as well.

The real question is what would have been the case in Brazil WITHOUT, for example, marginal rate surtaxes on corporations or lowered taxation international investments and investors?

To argue that the tax revenues which have flowed into the statist realm of Brazil are due to confiscatory taxing of the “rich” is simply sophistry. Don’t be suckered into this one..


Hillary Spews Her Sophistry (again)

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]]> http://www.ontheborderline.net/hillary-spews-sophistry/feed/ 0 A Snow Job http://www.ontheborderline.net/snow-job/ http://www.ontheborderline.net/snow-job/#comments Tue, 02 Mar 2010 06:19:46 +0000 Henry Patrick http://www.ontheborderline.net/?p=6679
A Snow Job

White house economic advisor Larry Summers stated in an interview with CNBC that the recent blizzards probably distorted the unemployment numbers due to be released on Friday morning. According to Summers, the mountain of accumulated snow halted construction projects and also temporarily closed many stores plus restaurants.

The White House reasoning quickly melts in the face of economic logic. Businesses make hiring or firing decisions based on the benefit that an employee brings to the table versus their cost. No doubt the weather kept people from eating out or shopping for a few days. But the dress that was not bought on Saturday because of the weather more than likely will be purchased after the roads have been plowed. The lobster whose life was saved by little snowflakes on Friday night will be boiled a week later for a delayed celebration.

The fact is that construction has hemorrhaged jobs for over a year. In a report authored by the Bureau of Labor Statistics and released at the beginning of February, the construction industry shed another 75,000 jobs, which was about the average monthly loss for the preceding 12 months. Currently, one out of four unemployed people came from construction.

Despite the rosier picture painted by the unemployment rate dipping under 10% the last three months, raw numbers show net additions to the jobless rolls. The White house has used the magical decline in the unemployment rate as proof of a successful economic plan.

Is Summers statement a preview of a disappointing jobs report? Many believe the actual unemployment rate hovers above 15% when individuals no longer actively looking for work are included. A bad jobs report could chill financial markets running on hope and stifle White House claims of success.


A Snow Job

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]]> http://www.ontheborderline.net/snow-job/feed/ 0 Knight to c2 http://www.ontheborderline.net/knight-c2/ http://www.ontheborderline.net/knight-c2/#comments Thu, 25 Feb 2010 03:41:45 +0000 Henry Patrick http://www.ontheborderline.net/?p=6675
Knight to c2

In chess a fork occurs when a piece moves into a position where it can simultaneously attack two or more opposing pieces. The knight, which can move in an L shaped pattern and four different directions, is the piece most commonly used to execute this type of attack. A fork usually results in the opposing player losing a major piece. High caliber players often take care to avoid moves that could leave an opening for two quality pieces like a Queen and a Bishop to be attacked at the same time.

In his aggression to flood the economy with fiat money and lower key interest rates to zero, Ben Bernanke may have moved his monetary pieces and the economy into a vulnerable position. The Federal Reserve faces two problems. While lower rates did little to boost an economy already flooded in debt, they did help chase money toward the stock market where indices have bounced approximately 60% from the lows made almost a year ago.

A dramatically inflated money supply creates the very real danger of rapid price increases across the economic landscape. At its very worse, inflation can destroy the currency as illustrated historically by the experience of the Weimar Republic. The Producer Price Index, which showed an annualized rise of 16%, sounded an alarm to put the brakes on the monetary printing presses.

The likely result of pulling back on the monetary reins will be much higher interest rates and siphoning money out of the stock market. On the other hand, if the Federal Reserve continues on its present course, then the odds of a currency crisis increase with each passing day.

It looks like Bernake is sure to lose a piece. He has to be careful not to put the country into checkmate.


Knight to c2

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]]> http://www.ontheborderline.net/knight-c2/feed/ 0 Another Flawed Keynesian Approach http://www.ontheborderline.net/flawed-keynesian-legislation/ http://www.ontheborderline.net/flawed-keynesian-legislation/#comments Wed, 24 Feb 2010 05:37:24 +0000 Henry Patrick http://www.ontheborderline.net/?p=6673
Another Flawed Keynesian Approach

With the help of five Republicans in the US Senate, it appears the hurdle has been cleared for some form of a jobs bill to pass approval in Congress. Perhaps I am mistaken, but Congress already passed and the president signed a $750 billion spending bill to get people back to work. What is different about raiding an empty treasury of billions more this time to create jobs?

Architects of the legislation point to the tax credits available to businesses that increase their headcount. One idea is to give employers a tax-credit up to $5000 for each additional person hired. At first glance this may seem like a logical incentive. But as my economic students learn, two sides exist to transaction.

The tax credit will only reduce the marginal cost of a new employee for the first year. After the initial year the cost of the new hire will balloon by at least the amount of the tax credit. As any student passing a Principles of Economic realizes, cost is just one factor in the employment equation. The other side of the coin takes into account the revenue benefit that an employee brings to the table. Firms will retain or hire individuals as long as their additional benefit exceeds their additional cost. Without a significant pick up in demand, many firms will pass on expanding their payrolls.

Small business owners point to another flaw of the proposal in that tax-credits are realized at the end of the year. The cost of a new hire drains cash flow in the meantime. As one owner stated, cash flow is at the heart of staying in business. My creditors may not wait for the federal government to reimburse me.

It looks like another lesson in failed Keynesian economics.


Another Flawed Keynesian Approach

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]]> http://www.ontheborderline.net/flawed-keynesian-legislation/feed/ 0 Glen Beck on the history of Progressives http://www.ontheborderline.net/glen-beck-history-progressives/ http://www.ontheborderline.net/glen-beck-history-progressives/#comments Wed, 06 Jan 2010 04:15:00 +0000 Lieutenant Dan http://www.ontheborderline.net/?p=6636
Glen Beck on the history of Progressives




Glen Beck on the history of Progressives

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]]> http://www.ontheborderline.net/glen-beck-history-progressives/feed/ 0 Got change for a trillion?? http://www.ontheborderline.net/got-change-for-a-trillion/ http://www.ontheborderline.net/got-change-for-a-trillion/#comments Wed, 08 Jul 2009 17:13:52 +0000 kilowatt http://www.ontheborderline.net/?p=6419
Got change for a trillion??

New currency coming out..

trillion header 300x59 Got change for a trillion??

trillion 300x269 Got change for a trillion??


Got change for a trillion??

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]]> http://www.ontheborderline.net/got-change-for-a-trillion/feed/ 0 Never-Ending Government Lies About Markets http://www.ontheborderline.net/never-ending-government-lies-about-markets/ http://www.ontheborderline.net/never-ending-government-lies-about-markets/#comments Fri, 15 May 2009 03:14:35 +0000 Chris http://www.ontheborderline.net/?p=6343
Never Ending Government Lies About Markets

The purpose of government is for those who run it to plunder those who do not. Throughout history, governments have used violence, intimidation, coercion, and mass murder to enforce this system. But governments’ first line of “defense” is always a blizzard of lies about its own alleged benevolence, altruism, heroism, and greatness, along with equally big lies about the “evils” of the civil society, especially the free market.

See Article


Never Ending Government Lies About Markets

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]]> http://www.ontheborderline.net/never-ending-government-lies-about-markets/feed/ 0 Quote of the Day http://www.ontheborderline.net/quote-of-the-day-225/ http://www.ontheborderline.net/quote-of-the-day-225/#comments Wed, 06 May 2009 01:47:45 +0000 Chris http://www.ontheborderline.net/?p=6333
Quote of the Day

“If you are an economist and did not see this coming, you should seriously reconsider the value of your education and maybe do something with a tangible value to society, like picking vegetables.”

Should People Just Ignore Economists?


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]]> http://www.ontheborderline.net/quote-of-the-day-225/feed/ 0 Dollar Being Recalled! http://www.ontheborderline.net/dollar-being-recalled/ http://www.ontheborderline.net/dollar-being-recalled/#comments Tue, 21 Apr 2009 18:54:17 +0000 Chris http://www.ontheborderline.net/?p=6298
Dollar Being Recalled!


Click Video to Play


Dollar Being Recalled!

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]]> http://www.ontheborderline.net/dollar-being-recalled/feed/ 0 Quote of the Week http://www.ontheborderline.net/quote-of-the-week-5/ http://www.ontheborderline.net/quote-of-the-week-5/#comments Tue, 21 Apr 2009 18:32:43 +0000 Chris http://www.ontheborderline.net/?p=6297
Quote of the Week

Without the ability to forcibly take the wealth of others through the political process, many would be relegated to a lifestyle reflective of their talents, intellect and motivation. For a majority such a change would mean living with less.

Henry Patrick – April 19, 2009


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]]> http://www.ontheborderline.net/quote-of-the-week-5/feed/ 0 Leadership and Tea http://www.ontheborderline.net/leadership-and-tea/ http://www.ontheborderline.net/leadership-and-tea/#comments Thu, 16 Apr 2009 23:11:37 +0000 Chris http://www.ontheborderline.net/?p=6283
Leadership and Tea

I went to a Tea Party meeting yesterday to observe and chat with a few folks. I spoke with many people I did not know, and I ended up actually speaking to the whole crowd after prompted by many with whom I spoke to on the sidelines. I mainly talked with many folks from truck drivers, retired veterans, moms, small business owners and iterated about a familiar theme that is near and dear to me, small businesses and their impact on this great nation we live in. I have on many occasions proudly proclaimed that it will be entrepreneurial spirit, not government intrusion that will revive our economy. This folks is the heart of small businesses. Small business employs over 75 per cent of the United States workforce. Anything that harms them in my opinion, harms America.

I did not speak and simply say it was the current administration that overtaxed. I reminded them that it is the Washington politicians of both stripes that are reaching into our wallets. This has not been something that just happened. It has been incrementally occurring for over the last 95 years. It may be a battle between the parties, but for most of us it’s Government overreaching their bounds and getting involved in issues that are not ever discussed in the constitution and using that to fund their own constituencies for one reason or another. It is done by politicians to get re-elected and to have power. Ive seen right through this for many years. The second oldest profession is being a politician and I actually think there’s not much difference between the first and second.

Now there is a line between what constitutes being a leader and being a politician. A leader by definition has to serve their followers and constituencies. I suppose a politician can do that. But one thing that is sorely missed in all of this is what their motive is. If the motive of a leader or politician is to be in charge, make the organization or government run smoothly, make a profit, build a respected company or department, get elected, and to win that might sound good. But to truly define leadership we need to completely understand one thing, motive. How was it the person got into a position where they could be called a leader by the definition used above? Did they inherit it? Was it simply appointed to them? Was it funded by interest groups? If it wasnt earned on the merit of truly serving others then I would hesitate at calling them a leader and the definition of a leader is not who promised the most. If it was arrived by taking from someone and giving to another, it also is not leadership.

A leaders motivation is not how far they have advanced their position or power, but how far they have advanced others. Thats the bottom line. If a person takes away from someone intentionally, they are not a leader. A leader strives to add value to others. The value you add to others is teaching them skills, providing opportunity, giving them insight and perspective, and having faith in them. I know this may sound like a politician but the difference lies with their motivation. You can add value to others by not having to take resources from others to give them. A real leader provides inspiration, values, strength, solutions, character, and does not waver in them. There may be politicians whose motives are those of a true leader, but I find it rare to find one. Remember, a true leaders motivation is not to advance their own position or power, but to advance others.


Leadership and Tea

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]]> http://www.ontheborderline.net/leadership-and-tea/feed/ 0 The Great Governor Perry http://www.ontheborderline.net/the-great-governor-perry/ http://www.ontheborderline.net/the-great-governor-perry/#comments Wed, 15 Apr 2009 13:14:35 +0000 Chris http://www.ontheborderline.net/?p=6277
The Great Governor Perry


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]]> http://www.ontheborderline.net/the-great-governor-perry/feed/ 1 Quote Of The Day http://www.ontheborderline.net/quote-of-the-day-221/ http://www.ontheborderline.net/quote-of-the-day-221/#comments Mon, 13 Apr 2009 19:15:23 +0000 donttreadonme http://www.ontheborderline.net/?p=6271
Quote Of The Day

“The governments alone are responsible for the spread of the superstitious awe with which the common man looks upon every bit of paper upon which the treasury or agencies which it controls have printed the magical words legal tender.” – LVM


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]]> http://www.ontheborderline.net/quote-of-the-day-221/feed/ 0 Could it happen here? http://www.ontheborderline.net/could-it-happen-here/ http://www.ontheborderline.net/could-it-happen-here/#comments Thu, 09 Apr 2009 01:17:23 +0000 Chris http://www.ontheborderline.net/?p=6259
Could it happen here?

Argentina’s Economic Collapse – Part 1 of 12


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]]> http://www.ontheborderline.net/could-it-happen-here/feed/ 0 Mr. Jefferson http://www.ontheborderline.net/mr-jefferson/ http://www.ontheborderline.net/mr-jefferson/#comments Wed, 08 Apr 2009 18:32:45 +0000 Chris http://www.ontheborderline.net/?p=6258
Mr. Jefferson


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