There’s no easy answer to erasing a staggering trillion-plus dollar deficit in a federal budget, but you’ve got to start somewhere — and Obama’s looking at the nation’s wireless carriers as cash cows just waiting to be milked. The President’s proposed budget for 2010 calls for an increase in spectrum license user fees from $50 million to $200 million, with further increases to $550 million over the course of the next decade, all of which would be on top of the billions carriers have already shelled out in spectrum auctions. A good way to bring in some extra cash? Yeah, probably, but considering that carriers will be more than happy to pass the increases on to consumers, let’s just be straight: it’s a tax.
And now, we read of worries about hyper-inflation. Now, why would that happen? When businesses are trapped, losing revenue, losing buyers, but having increased tax burdens, what is their choice? They have to increase prices and CUT STAFF.
Often, salaries are the biggest part of overhead. The Obama administration has no business experience. Hates businesses, especially, it seems, the small business person, but must increase government revenue to pay for all their social programs.
What happens then, though, is that people stop paying taxes. They either can’t afford it or feel that the taxes are harmful and a burden. And government revenues further decline.
About the hyper-inflation:
One can’t argue, however, with the fear this run of outsized state spending has inspired among global investors.
They worry that Western governments might not be able to someday erase those mounting deficits, which have caused U.S. federal debt to approach 100 per cent of GDP – its highest level since the years immediately following the end of World War II.
The jitters account for the weakened U.S. dollar and a slumping euro. It is hardly a surprise that Greece, fiscally mismanaged for a decade, would someday face default. What is alarming is that Athens’ belated acknowledgement of its fiscal crisis immediately triggered fears that a raft of other economies – including Spain, Portugal, Ireland and perhaps even Britain – would follow suit. How else to explain the 307 per cent jump in gold prices since 2000 to a current $1,140 per ounce, for a commodity used principally as a hedge against global ruin?
Well. I don’t know. For their to be hyper-inflation, there has to be buyers, right? The problem is that their aren’t buyers right now. And there probably shouldn’t be. Americans and Westerners around the world need to get their personal debt in hand and get reacquainted with things like quality and extending use. That won’t help the economy in the short term, but it will help the nation in the long term.
Maxed Out Mama says the recession isn’t over. That seems self-evident to me. Why the Democrats tout a recovering economy in the face of the increased job losses, decline in home sales, increase in gas prices and mild inflation baffles me.
Will electing the Republicans in November help? One commenter over there rightly notes that many people in the US are simply holding because Obama and the Democrats have created such an unstable environment. That’s certainly true. I still don’t think it’s enough. It might help.
Anyway, the Democrat solution is tax and spend. It’s not much of a solution. You, the consumer, will pay many ways: direct VAT tax, increased income tax at the state and federal level (Maxed Out Mama also notes that the states and federal government are fighting over the same money), and then carry-through taxes as businesses try to recoup earnings from their increased tax burden. Did I mention that the buyer is already stressed and out of work?
Bottom line: The economy is still a mess and Democrat policies are making it worse.