Renewable Energy – by Royal Decree

By Paul Driessen – Re-Blogged From http://www.WattsUpWithThat.com

The St. Louis city council has unanimously passed a resolution decreeing that by 2035 the city will somehow, almost magically be powered by 100% “clean, renewable” electricity. Or at least by paper certificate, as St. Louis city council raises electricity costs for poor families

City of St. Louis skyline in September 2008. Image: Wikimeda
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House Passes Sweeping Tax Reform Bill

Daily Caller News Foundation – Re-Blogged From Liberty Headlines

The House passed a comprehensive tax reform bill Thursday in a significant step toward fulfilling the GOP leadership’s goal of placing a bill on President Donald Trump’s desk by the end of the year.

The bill passed 227 to 205, with 13 Republican defectors and no supporting votes from Democrats.

The House version slashes the corporate rate from 35 to 20 percent, collapses the existing seven income brackets down to four and eliminates a plethora of popular deductions, resulting in a total of $1.4 trillion in individual and business tax cuts over the next decade.

“For the first time in 31 years we are wiping the tax code clean and replacing it with one that is fairer and simpler for everyone,” GOP Rep. Devin Nunes of California, a member of the Ways and Means Committee, told the New York Times.

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Chicago Pawns A Crown Jewel

By John Rubino – Re-Blogged From Dollar Collapse

A new bond issue from Chicago is rated AAA. That’s great because it means the city’s finances are on the mend, right?

Nope, just the opposite. Here’s the story:

Bondholders fret as alchemy turns Chicago’s junk to gold

(Bloomberg) — Chicago’s public pension debt is $36 billion and growing, it’s facing $550 million in budget deficits over the next three years and this summer the state had to bail out a school system that was flirting with insolvency.

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Three Myths About Fixing Social Security

By Brenton Smith – Re-Blogged From Newsmax

Social Security is the largest, and arguably most important, program in the federal government. It is a life-line for millions. For the rest of us the program is a set of never-ending, polarizing arguments.

The contentiousness is caused in large part by the number and conflicting nature of the urban legends surrounding the system. Everyone has a fact that is someone else’s myth.

These convictions about the program shape who voters elect, and seriously limit what candidates are willing to say to the electorate. These beliefs have so penetrated the public conscience that actual policy makers are left herding unicorns.

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GOP Tax Plan Increases the Most Insidious Tax

By Ron Paul – Re-Blogged From Ron Paul Institute

Last Thursday, congressional Republicans unveiled their tax reform legislation. On the same day, President Trump nominated current Federal Reserve Board Governor Jerome Powell to succeed Janet Yellen as Federal Reserve chair. While the tax plan dominated the headlines, the Powell appointment will have much greater long-term impact. Federal Reserve policies affect every aspect of the economy, including whether the Republican tax plan will produce long-term economic growth.

President Obama made history by appointing the first female Fed chair. President Trump is also making history: If confirmed, Powell would be the first former investment banker to serve as chairman of the Federal Reserve. Powell’s background suggests he will continue Janet Yellen’s Wall Street-friendly low interest rates and easy money policies.

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Stock and Awe, Bears in Bondage

By David Haggith – Re-Blogged From The Great Recession Blog

The Trump Rally pushed ahead relentlessly through a summer full of high omens and great disasters, all which it swatted off like flies. Even so, all was not perfect in the market as nerves began to jitter midsummer beneath the surface even among the most longtime bulls. Wall Street’s fear gauge (the CBOE Volatility Index) lifted its needle off its lower post to a nine-month high after President Trump’s comments about “fire and fury” if North Korea didn’t toe the line. (Mind you, the high wasn’t very far off the post because of how placid the previous nine months had been.)

As volatility stirred languidly over the threat of nuclear war, stock prices took a little spill with all major stock indices seeing their biggest one-day drop since May. The SPX fall amounted to a 1.4% drop in a day — nothing damaging. The Dow dropped about 1% in a day. But beneath the surface, the market is looking different and shakier.

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Revelation Numbers

By Michael Pento – Re-Blogged From PentoPort

The federal budget deficit widened in the fiscal year 2017 to the sixth highest on record, creating a budget shortfall of $666 billion. That is up $80 billion, or 14%, from the fiscal year 2016. The overspend resulted primarily from an increase in spending for Social Security, Medicare, and Medicaid, as well as higher interest payments on the debt due to rising rates that drove up outlays to $4 trillion, which was 3% higher than the previous fiscal year.

The deficit as a percentage of gross domestic product (GDP), totaled 3.5%, up from 3.2% the year prior. This budget gap will be piled on to the ballooning National Debt that in the fiscal year of 2016 grew to whopping 106% of GDP.

But the Trump administration isn’t spending a lot of time tweeting about the looming debt crisis. In fact, they would like us to believe that their recently proposed tax reform will not only pay for itself but will actually reduce debt and deficits. Treasury Secretary Steven Mnuchin noted recently that, “Through a combination of tax reform and regulatory relief, this country can return to higher levels of GDP growth, helping to erase our fiscal deficit.”

But the truth is that the proposed tax reform will not completely pay for itself–let alone reduce the deficit or pay down the debt. The Senate has recently congratulated themselves for approving a budget resolution that would allow Congress to collect $1.5 trillion less in federal revenues over the next ten years, yet they are still in search of new revenue to pass tax reform.

And since there are still some remnants of the fiscal hawks in Congress, Republicans are in a frenzy to find new revenue opportunities to get the necessary votes; in search of an elusive “sacred cow” that isn’t that sacred.

Following the election of Donald Trump, the House supported a Border Adjustment Tax (BAT); a cash windfall that dovetailed brilliantly with Trump’s America first agenda. However, it didn’t take long for lobbying groups to crush that proposal, and the BAT tax wound up biting the dust.

The next target was the deductibility of state and local taxes and the mortgage interest deduction–but the Republicans soon realized they have representatives seeking re-election in high tax states too…and this idea has also quickly fallen by the wayside.

On October 20th, the New York Times reported that “House Republicans are considering a plan to sharply reduce the amount of income American workers can save in 401(k) accounts, reportedly to as low as $2,400 per year (The current figure is $18,000, rising to $18,500 next year, with $6,000 additional in catch-up contributions permitted to those 50 and over.)”   However, President Trump quickly killed this with a tweet too.

Now we hear rumblings of a higher tax bracket; this may get the support of some Democrats, but the truth is there are not enough one-percenters to make the numbers work.

The Senate can pass tax reform with a simple majority but there is a catch. To use what is called the budget reconciliation process it cannot add to the deficit beyond the 10-year budget window. Therefore, a feasible solution may be to include an additional upper-income bracket to throw a bone to the Democrats and bring some on board to get to 60 votes. But the problem is that under either Reconciliation or Regular Order, passing tax cuts would mean that deficits would soar.

Our economy did prosper after the Regan tax cuts. But here is the rub, in the 1980’s the National debt was 45% of GDP; but now it is 106% of GDP.

According to Carmen Reinhart and Ken Rogoff, in their book, “This Time Is Different” – 800 years of financial history proves that high government debt ratios lead to low economic growth. And though some of their data have been questioned regarding the magnitude of their findings, their basic premise that high debt leads to weaker growth has held true under aggressive scrutiny.

Cutting taxes in an environment of massive debt and ballooning deficits, without a commensurate reduction in spending, is not going to grow the economy over 3%–at least it hasn’t worked in the past 800 years.

Declining government revenues and long-term costs associated with an aging population, including higher Social Security and Medicare spending, are expected to continue pushing up deficits over the coming decades. Real tax reform is needed but it should be paid for in order to ensure that we grow the private sector as we shrink the public sector. That means cutting taxes, eliminating loopholes and reducing spending. Sadly, few in Washington espouse such an agenda. Without such cuts, the economic boost from lower taxes would be more than offset by spiking debt service payments on the record amount of outstanding debt.

The S&P500 hit a bottom of 666 in March of 2009, which led to the most humongous intrusion into free markets by the U.S. government in its history. Now we have that same foreboding number 666; this time regarding the amount of red ink during the 2017 fiscal year. A mere coincidence I’m sure. Nevertheless, we must pray this rapidly rising debt figure does not forebode yet another step closer for the demise of the middle class.

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