President Obama and his sycophants in Congress are again on their rant about raising the taxes on the millionaires (defined as a family making $250,000 or more) and other people who need to pay their fair share. Here’s something he and the leftstream media are not going to tell you. It doesn’t matter, not one iota, if Obama gets the tax rate increase he wants. It won’t fix the problem. It will be barely noticeable. It will likely do harm.

The President does not come right out and say it, but it is implied that if only we raise taxes on the rich all of our budgetary problems would disappear. Listen to this clip.

http://www.hark.com/clips/hmtzzhwlcw-raise-taxes-on-the-rich

He says if we take money from the rich and give it the poor the economy will be back in balance. The word ‘balance’ is in there for a reason. People hear that and they think “balanced budget”. Then they make the leap from “balance budget’ to “Tax the rich and we balance the budget”. Again, the President doesn’t say this. But, it is clear he wants you to infer this.

So, first let’s shoot that down right now. The Clinton Tax Rate Increases, that President Obama wants Congress to reinstitute on families making above $250,000 and individuals making above $200,000 (millionaires?) are projected to raise annual revenue from as little as 65 billion per year to as much as 400 billion per year. Other sources say revenues will actually go down as those “rich’ people shelter their income more efficiently.

For argument’s sake let’s say that we will be rolling in the dough and bringing in 400 billion more each year. In 2011 the budget deficit, the amount money we need to bring in so we have as much as we spend each year, was 1.6 trillion. That’s trillion with a capital ‘T”. That’s trillion, as in 1000 billion. The 400 billion of additional revenue is a big maybe. The 1.6 trillion shortfall is a carved-in-stone fact. We are talking a pie-in-the sky- best-case scenario of reducing the deficit by 25%.

You say “Great! That’s a good start”. I say “Weren’t you listening?” Maybe we will raise 400 billion. We might get even less money. But, we are definitely planning on spending every dime and then some to create the deficit.

“Yeah, but we can try it and maybe at the same time reduce spending in areas where we can afford it; like Defense. You know we spend more than every other country in that area.”  comes your reply.

We have played this game before. If we cut out every single dollar going to Defense, every single dollar, our deficit drops from 1.6 trillion to 700 billion. So if we tax the rich, cut out all defense (throwing a few million people out of work in the process, and turning our Recession into a full fledged Depression) we are still 300 billion short, IF things play out in the best case scenario. But, we also get invaded by a foreign country (other than Mexico), and must learn to speak Russian, Chinese, or Farsi. 

Last week I told you about the Bureau of Labor Statistic’s (BLS) created entity call the Marginally Attached Person. A Marginally Attached Person is “Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.”

In real English that is someone who is not working and is not longer trying to find a job. To listen to the leftstream media, these people have stopped looking for work because they are so incredibly frustrated with the job market that they have given up all hope. They paint a picture of a person spending hour after hour, day after day, week after week, diligently searching for a job, any job. They fill out hundreds of applications and when called for the rare interview they are eventually disappointed. 

Well, the anecdotal evidence I, and people I talk to about this situation paints a different picture. Most stories start out the same, with said person losing his job for one irrelevant reason or another, and then getting on unemployment. At that point their situation changed from
unemployed to “on vacation” The quote I hear often is “I’ll start looking for work when my unemployment gets close.” That means when the money starts to run out I’ll find a job. 

But sitting at home and not having to work to get your money is additive. You get used to it, you want it to continue. You don’t want to have to get up each morning and be someplace at a certain time, and do what someone else tells you to. You want to be free to do what ever you want, and have the bills paid by someone else. I was seriously injured by a drunk driver 25 years ago, and I had money coming in without working. It was nice. Towards the end I was a bit resentful that it could not continue. But, do you know why I willingly and happily returned to work? I healed and that stopped the money. It was work or starve, in my mind. Milking the system, via my neighbors never crossed my mind.

The Labor Participation Level (LPL), which is essentially everyone except the Marginally Attached Person and the elderly, has shrunk steadily under Obama. His high pointwas the day he took office in Jan 2009, at 65.7%. It is now 63.7%. Each percentage point is about 1.5 million
workers. Some of that is due to the elderly reaching retirement age. But, that is mitigated by those turning 16 and entering the labor market. The number of people working in Jan ’09 was 142.2 million. Now it is 141.6 million. The number of MAPs was 2.13 million. Now it is 2.81 million, and steadily growing.

The Marginally Attached Person (MAP) still has to eat and support a family. So rather than go back to work a very large segment of the unemployed are devoting their time and efforts not to finding a job, but to milking the rest of us via the myriad of government programs to assist “the
poor” 

The US Census Bureau issued it’s annual report on poverty in the US a few months back. It is titled Income, Poverty and Health Insurance Coverage in the United States: 2010 and can be found here. http://www.census.gov/prod/2011pubs/p60-239.pdf

 The most interesting part to me is a statement on page two that I have never heard on the evening news. It says:

“The income and poverty estimates shown in this report are based solely on money income before taxes and do not include the value of noncash benefits, such as nutrition assistance, Medicare, Medicaid, public housing, and employer-provided fringe benefits.”

 Tell me something, do you think you might qualify as “poor” if the money you spent on food, rent/mortgage, health care, health insurance, and your utilities were not counted as part of your income? I make a solid middle class living, and I would be poor if all that were suptracted out. Here in this one sentence lies the real problem. The "poor" are really "poor with new and improved additives" So why would the Federal government define the "poor", without counting all that they give them (and take from someone else)? See if you can figure it out. First, lets describe why some people are poor and some are not.

I grew up hovering between poor and lower middle class. My folks qualified (but never accepted) food stamps and other government aid early in my life. Both of my folks grew up knowing poverty; both with large families and homes with out electricity and indoor plumbing. My paternal grandfather died when my dad was two. My grandparents on my mother’s side were immigrants who spoke no English, and worked in the beet fields to support 14 children. So I feel I have standing to talk about this from something other than an academic standpoint.

The “poor” are poor for one or more of four very general reasons, and one very specific government caused one.

The first reason that Americans live in poverty is Chronic Bad Decisions. This ecompasses things like, drug use, alcohol abuse, teenage pregnancy, failure to complete high school, failure to get along with others, breaking the law, cigarette smoking, failure to manage money, and out right wasting of money. This list is not inclusive.

I can already hear the howls.

“That’s nonsense. Plenty of people do these things and live a good life”

and

“ A bit judgmental aren’t you? This is a free country and people are free to live their own lives even if they make bad choices.”

My response; You’re right. People are free to make their own choices and many people that do the things I listed, live their lives above the poverty line. Just because you are an alcoholic who smokes like a train, does not mean you will be poor. But, I didn’t say that it would. I said chronic bad decisions are the first reason in making one poor. If a person spends his limited money for beer, cigarettes, and tattoos, while not being able to get along with his boss, has no high school diploma and spends his spare time breaking into cars, this will not lead to a life or riches. It’s a combination of bad decisions, and other factors, that keeps people in this category down.

The second reason is a Poor Work Ethic. There are a lot of people who make chronic bad decision, but are still not poor. They have one of three things going for them; a rich family, a winning lottery ticket or a good work ethic. Having a good work ethic will over come a lot of bad decisions. The Gods of Success will forgive a lot of things if you show up each day, bust your butt, and get the job done. But, combine a poor work ethic with just a few bad life choices and you end up as a statistic in a report.