This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.
“Inflation”, “mind-boggling aftereffects”, “once unthinkable dosages”, major industries dependent on the “public teat” who “won’t leave it willingly”? These are not words of someone who still agrees with Obama. By comparing the Federal budget policy to going “all in” in a poker game, Buffet is saying that Obama and the democrats in Congress are making a terrible gamble, echoing David S. Broder in the Washington Post (hat tip: American Thinker), “When we elected Obama, we didn’t know what a gambler we were getting.”
This reveals the mind of the country’s foremost investor, and is undoubtedly representative of how investors feel and why stock markets continue their downward spiral.
Administration officials said Mr. Obama would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket, 35 percent, and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer’s marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Mr. Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket.
I expect that this tax grab will be seriously detrimental to African theological faculties which depend on American donations to make ends meet. Now imagine that for every $10,000 given in charitable donations the donor partner only receives back $2800 at tax time. This will have a spiral effect downward, because in our experence, the tax refund cheque that we receive every year is immediately re-donated. If the refund cheque is smaller giving by donor partners will necessarily go down. This is bad news for theological education in Africa. The net effect is that Obama will be stealing from Africa. I told you not to hold your breath for benefits to Africa from Obama! He is trying to put 7% levy on every dollar given by your important partners.
But already the global crisis is having an effect on African theological education. One president of a seminary in Africa wrote to select partners this week:
We would like to inform you that because of the global crisis, our institution … is going through very difficult time. Since the end of December 2008, we are not able to pay salaries of our staff. We are accumulating bills for electricity, water and other supplies.
We are now going to lay off part of our staff at the end of February. We are also taking several steps to minimize the impact of the financial crisis on our institution.
Obama’s mendacity has reached cosmic proportions. The AP reports the extent of his new budget, a whopping 3 trillion dollars (cela veut dire $3,000,000,000,000 pour mes amis qui ne comprennent des chiffres en anglais! Pour ceux qui sont en Afrique francophone, cela donne 1537770000000000 CFA selon le taux actuel). This includes 1.75 trillion dollar deficit, which he repeatedly blames on the Bush administration by calling it the deficit that we’ve inherited. Excuse me. But you don’t inherit deficits but debt. Deficit spending is a result of the current administration’s decisions. But the double-speak rises to unbelievable proportions when he says, Continue reading →
This morning I read from the AP about Jade Goody, British reality star, who at the tender age of 27 years is dying of cervical cancer. Now my point here is not to criticize the dying woman. Not at all. But I want to criticize the “mainstream” media. In its shameless promotion of the lax morals of the Sexual Revolution, it has killed millions of people around the world. Cervical cancer is caused in nearly all cases by sexual promiscuity–not necessarily on the part of the woman dying, but it could be her partner who transmits it to her. The sexually transmitted Human papillomavirus (HPV) which is a root factor in cervical cancer. True monogamy, thus, eliminates the risk. Continue reading →
Projected US Federal Budget Deficit (Source: examiner.com)
The stimulus bill has passed the Congress and awaits signing by President Obama. The AP reports:
President Barack Obama, savoring his first major victory in Congress, said Saturday that newly passed $787 billion economic stimulus legislation marks a “major milestone on our road to recovery.”
Speaking in his weekly radio and Internet address, Obama said, “I will sign this legislation into law shortly, and we’ll begin making the immediate investments necessary to put people back to work doing the work America needs done.”
Now I have to say that the term “stimulus” is euphemistic for “wasteful government spending”. But the term “investments” for this bill is ridiculous. If the US government doesn’t raise sufficient money to cover this deficit, it will lead to inflation. Inflation is form of robbery. Do you have a savings account? At 20% inflation like what we had during the Carter years (I was alive in those days, I remember it), your savings account will have lost 1/5 its value in one year. In five years its worth nothing.