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Yellen Calms Fears Fed’s Policy Trigger Finger Is Getting Itchy
by Rich Miller, Christopher Condon , and Jeanna Smialek
March 15, 2017, 1:00 PM CDT March 15, 2017, 5:02 PM CDT
Policy makers still project three total rate hikes for 2017
FOMC sticks with ‘gradual’ plan for removing accommodation
Fed Raises Benchmark Lending Rate a Quarter Point
Federal Reserve Chair Janet Yellen sought to reassure investors that the central bank’s latest interest-rate increase wasn’t a paradigm shift to a trigger-happy policy driven by fears of faster inflation.
Speaking to reporters after the Fed’s quarter percentage-point move on Wednesday, Yellen said the central bank was willing to tolerate inflation temporarily overshootingits 2 percent goal and that it intended to keep its policy accommodative for “some time.”
“The simple message is the economy’s doing well. We have confidence in the robustness of the economy and its resilience to shocks,” she said.
As a result, the Fed is sticking with its policy of gradually raising interest rates, Yellen said. In their first forecasts in three months, Fed policy makers penciled in two more quarter-point rate increases this year and three in 2018, unchanged from their projections in December.
Today’s decision “does not represent a reassessment of the economic outlook or of the appropriate course for monetary policy,” the Fed chief said.
Speculation of a more aggressive Fed had mounted in recent days after a host of central bank officials, including Yellen herself, went out of their way to telegraph to financial markets that a rate hike was imminent. The expectations were further fueled by news of rising inflation.
Stocks rose and bond yields fell as investors viewed the statement from the Federal Open Market Committee and Yellen’s remarks afterward as a sign that the Fed isn’t in a hurry to remove monetary stimulus. The FOMC raised the target range for the federal funds rate to 0.75 percent to 1 percent, as expected, but Yellen’s lack of urgency to snuff out inflation was a surprise.
R.J. Gallo, a fixed-income investment manager at Federated Investors in Pittsburgh, said the chorus of Fed speakers before this meeting led investors to expect a move up in the number of projected rate hikes this year, and even upgrades by Fed officials in the levels of inflation and growth they anticipated.
None of that materialized.
“You didn’t get any of those things,” Gallo said, which explains why Treasury yields quickly dropped after the Fed released the FOMC statement and a new set of economic projections. “The expectation that Fed was getting more hawkish had to come out of the market.”
The U.S. economy has mostly met the central bank’s goals of full employment and stable prices, and may get further support if President Donald Trump delivers promised fiscal stimulus. Investor and business confidence has soared since Trump won the presidency in November, buoyed by his vows to cut taxes, lift infrastructure spending and ease regulations.
Still, the data don’t show an economy that’s heating up rapidly — a point Yellen herself made after the third rate hike since the 2007-2009 recession ended. In fact, the economy may have “more room to run,” she said.
Stronger business and consumer confidence hasn’t yet translated into increased investment and spending, said Yellen.
“It’s uncertain just how much sentiment actually impacts spending decisions, and I wouldn’t say at this point that I have seen hard evidence of any change in spending decisions,” said the Fed Chair. “Most of the business people that we’ve talked to also have a wait-and-see attitude.”
Retail sales in February grew at the slowest pace since August, a government report showed earlier Wednesday. The Atlanta Fed’s model for GDP predicts an expansion of 0.9 percent in the first quarter, less than a third the pace Trump is aiming for.
Asked about the potential for a fiscal boost, Yellen made clear the Fed is still waiting for more concrete policy plans to emerge from the Trump administration before adapting monetary policy in reaction.
“There is great uncertainty about the timing, the size and the character of policy changes that may be put in place,” Yellen said. “I don’t think that’s a decision or set of decisions that we need to make until we know more about what policy changes will go into effect.”
Yellen disputed suggestions that the Fed was on a collision course with the Trump administration over its plans to foster faster economic growth through tax cuts and deregulation. “We would welcome stronger economic growth in the context of price stability,” she said.
She said she had met Trump briefly and had gotten together a couple of times with Treasury Secretary Steven Mnuchin to discuss the economy and financial regulation.
Further underscoring their lack of urgency, Fed officials repeated a commitment to maintain their balance-sheet reinvestment policy until rate increases were well under way. Yellen said officials had discussed the process of reducing the balance sheet gradually, but had made no decisions and would continue to debate the topic.
Policy makers forecast inflation will reach 1.9 percent in the fourth quarter this year, and 2 percent in both 2018 and 2019, according to quarterly median estimates released with the FOMC statement. The Fed’s preferred measure of inflation rose 1.9 percent in the 12 months through January, just shy of its target.
Yellen pointed out, though, that core inflation continues to run somewhat further below 2 percent. That rate, which strips out food and energy costs, stood at 1.7 percent in January. The Fed’s new forecast for the core rate at the end of this year edged up to 1.9 percent, from 1.8 percent in December.
“The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the Fed said. Discussing the word symmetric in the statement, Yellen said during her press conference that the Fed was not shooting to push inflation over 2 percent but recognized that it could temporarily go above it. Two percent is a target, she reiterated, not a ceiling.
Changes in the federal funds rate will always affect the U.S. dollar. When the Federal Reserve increases the federal funds rate, it normally reduces inflationary pressure and works to appreciate the dollar.
Since June 2006, however, the Fed has maintained a federal funds rate of close to 0%. In the wake of the 2008 financial crisis, the federal funds rate fluctuated between 0-0.25%, and is now 0.75%.
The Fed used this monetary policy to help achieve maximum employment and stable prices. Now that the 2008 financial crisis has largely subsided, the Fed will look to increase interest rates to continue to achieve employment and to stabilize prices.
Inflation of the U.S. Dollar
The best way to achieve full employment and stable prices is to set the inflation rate of the dollar at 2%. In 2011, the Fed officially adopted a 2% annual increase in the price index for personal consumption expenditures as its target. When the economy is weak, inflation naturally falls; when the economy is strong, rising wages increase inflation. Keeping inflation at a growth rate of 2% helps the economy grow at a healthy rate.
Adjustments to the federal funds rate can also affect inflation in the United States. The Fed controls the economy by increasing interest rates when the economy is growing too fast. This encourages people to save more and spend less, reducing inflationary pressure. Conversely, when the economy is in a recession or growing too slowly, the Fed reduces interest rates to stimulate spending, which increases inflation.
During the 2008 financial crisis, the low federal funds rate should have increased inflation. Over this period, the federal funds rate was set near 0%, which encouraged spending and would normally increase inflation.
However, inflation is still well below the 2% target, which is contrary to the normal effects of low interest rates. The Fed cites one-off factors, such as falling oil prices and the strengthening dollar, as the reasons why inflation has remained low in a low interest environment.
The Fed believes that these factors will eventually fade and that inflation will increase above the target 2%. To prevent this eventual increase in inflation, hiking the federal funds rate reduces inflationary pressure and cause inflation of the dollar to remain around 2%.
Appreciation of the U.S. Dollar
Increases in the federal funds rate also result in a strengthening of the U.S. dollar. Other ways that the dollar can appreciate include increases in average wages and increases in overall consumption. However, although jobs are being created, wage rates are stagnant.
Without an increase in wage rates to go along with a strengthening job market, consumption won’t increase enough to sustain economic growth. Additionally, consumption remains subdued due to the fact that the labor force participation rate was close to its 35-year low in 2015. The Fed has kept interest rates low because a lower federal funds rate supports business expansions, which leads to more jobs and higher consumption. This has all worked to keep appreciation of the U.S. dollar low.
However, the U.S. is ahead of the other developed markets in terms of its economic recovery. Although the Fed raises rates cautiously, the U.S. could see higher interest rates before the other developed economies.
Overall, under normal economic conditions, increases in the federal funds rate reduce inflation and increase the appreciation of the U.S. dollar.
Financial repression refers to “policies that result in savers earning returns below the rate of inflation” in order to allow banks to “provide cheap loans to companies and governments, reducing the burden of repayments”. It can be particularly effective at liquidating government debtdenominated in domestic currency. It can also lead to a large expansions in debt “to levels evoking comparisons with the excesses that generated Japan’s lost decade and the Asian financial crisis” in 1997.
Government restrictions on the transfer of assets abroad through the imposition of capital controls.
These measures allow governments to issue debt at lower interest rates. A low nominal interest rate can reduce debt servicing costs, while negative real interest rates erodes the real value of government debt. Thus, financial repression is most successful in liquidating debts when accompanied by inflation and can be considered a form of taxation, or alternatively a form of debasement.
The size of the financial repression tax for 24 emerging markets from 1974 to 1987. Their results showed that financial repression exceeded 2% of GDP for seven countries, and greater than 3% for five countries. For five countries (India, Mexico, Pakistan, Sri Lanka, and Zimbabwe) it represented approximately 20% of tax revenue. In the case of Mexico financial repression was 6% of GDP, or 40% of tax revenue.
Financial repression is categorized as “macroprudential regulation“—i.e., government efforts to “ensure the health of an entire financial system.
After World War II
Financial repression “played an important role in reducing debt-to-GDP ratios after World War II” by keeping real interest rates for government debt below 1% for two-thirds of the time between 1945 and 1980, the United States was able to “inflate away” the large debt (122% of GDP) left over from the Great Depression and World War II. In the UK, government debt declined from 216% of GDP in 1945 to 138% ten years later in 1955.
China‘s economic growth has been attributed to financial repression thanks to “low returns on savings and the cheap loans that it makes possible”. This has allowed China to rely on savings-financed investments for economic growth. However, because low returns also dampens consumer spending, household expenditures account for “a smaller share of GDP in China than in any other major economy”. However, as of December 2014, the People’s Bank of China “started to undo decades of financial repression” and the government now allows Chinese savers to collect up to a 3.3% return on one-year deposits. At China’s 1.6% inflation rate, this is a “high real-interest rate compared to other major economies”.
After the 2008 economic recession
In a 2011 NBER working paper, Carmen Reinhart and Maria Belen Sbrancia speculate on a possible return by governments to this form of debt reduction in order to deal with high debt levels following the 2008 economic crisis.
Critics[who?] argue that if this view was true, investors (i.e., capital-seeking parties) would be inclined to demand capital in large quantities and would be buying capital goods from this capital. This high demand for capital goods would certainly lead to inflation and thus the central banks would be forced to raise interest rates again. As a boom pepped by low interest rates fails to appear these days in industrialized countries, this is a sign that the low interest rates seem to be necessary to ensure an equilibrium on the capital market, thus to balance capital-supply—i.e., savers—on one side and capital-demand—i.e., investors and the government—on the other. This view argues that interest rates would be even lower if it were not for the high government debt ratio (i.e., capital demand from the government).
Free-market economists argue that financial repression crowds out private-sector investment, thus undermining growth. On the other hand, “postwar politicians clearly decided this was a price worth paying to cut debt and avoid outright default or draconian spending cuts. And the longer the gridlock over fiscal reform rumbles on, the greater the chance that ‘repression’ comes to be seen as the least of all evils”.
Also, financial repression has been called a “stealth tax” that “rewards debtors and punishes savers—especially retirees” because their investments will no longer generate the expected return, which is income for retirees. “One of the main goals of financial repression is to keep nominal interest rates lower than they would be in more competitive markets. Other things equal, this reduces the government’s interest expenses for a given stock of debt and contributes to deficit reduction. However, when financial repression produces negative real interest rates (nominal rates below the inflation rate), it reduces or liquidates existing debts and becomes the equivalent of a tax—a transfer from creditors (savers) to borrowers, including the government.”
The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.
The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule.
Financial Institutions are obligated by law to maintain certain levels of reserves, either as reserves with the Fed or as vault cash. The level of these reserves is determined by the outstanding assets and liabilities of each depository institution, as well as by the Fed itself, but is typically 10% of the total value of the bank’s demand accounts (depending on bank size). In the range of $9.3 million to $43.9 million, for transaction deposits (checking accounts, NOWs, and other deposits that can be used to make payments) the reserve requirement in 2007-2008 was 3 percent of the end-of-the-day daily average amount held over a two-week period. Transaction deposits over $43.9 million held at the same depository institution carried a 10 percent reserve requirement.
For example, assume a particular U.S. depository institution, in the normal course of business, issues a loan. This dispenses money and decreases the ratio of bank reserves to money loaned. If its reserve ratio drops below the legally required minimum, it must add to its reserves to remain compliant with Federal Reserve regulations. The bank can borrow the requisite funds from another bank that has a surplus in its account with the Fed. The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.
The nominal rate is a target set by the governors of the Federal Reserve, which they enforce by open market operations and adjusting the interest paid on required and excess reserve balances. That nominal rate is almost always what is meant by the media referring to the Federal Reserve “changing interest rates.” The actual federal funds rate generally lies within a range of that target rate, as the Federal Reserve cannot set an exact value through open market operations.
Another way banks can borrow funds to keep up their required reserves is by taking a loan from the Federal Reserve itself at the discount window. These loans are subject to audit by the Fed, and the discount rate is usually higher than the federal funds rate. Confusion between these two kinds of loans often leads to confusion between the federal funds rate and the discount rate. Another difference is that while the Fed cannot set an exact federal funds rate, it does set the specific discount rate.
The federal funds rate target is decided by the governors at Federal Open Market Committee (FOMC) meetings. The FOMC members will either increase, decrease, or leave the rate unchanged depending on the meeting’s agenda and the economic conditions of the U.S. It is possible to infer the market expectations of the FOMC decisions at future meetings from the Chicago Board of Trade (CBOT) Fed Funds futures contracts, and these probabilities are widely reported in the financial media.
Interbank borrowing is essentially a way for banks to quickly raise money. For example, a bank may want to finance a major industrial effort but may not have the time to wait for deposits or interest (on loan payments) to come in. In such cases the bank will quickly raise this amount from other banks at an interest rate equal to or higher than the Federal funds rate.
Raising the federal funds rate will dissuade banks from taking out such inter-bank loans, which in turn will make cash that much harder to procure. Conversely, dropping the interest rates will encourage banks to borrow money and therefore invest more freely. This interest rate is used as a regulatory tool to control how freely the U.S. economy operates.
By setting a higher discount rate the Federal Bank discourages banks from requisitioning funds from the Federal Bank, yet positions itself as a lender of last resort.
Comparison with LIBOR
Though the London Interbank Offered Rate (LIBOR) and the federal funds rate are concerned with the same action, i.e. interbank loans, they are distinct from one another, as follows:
The target federal funds rate is a target interest rate that is set by the FOMC for implementing U.S. monetary policies.
The (effective) federal funds rate is achieved through open market operations at the Domestic Trading Desk at the Federal Reserve Bank of New York which deals primarily in domestic securities (U.S. Treasury and federal agencies’ securities).
LIBOR is based on a questionnaire where a selection of banks guess the rates at which they could borrow money from other banks.
LIBOR may or may not be used to derive business terms. It is not fixed beforehand and is not meant to have macroeconomic ramifications.
Predictions by the market
Considering the wide impact a change in the federal funds rate can have on the value of the dollar and the amount of lending going to new economic activity, the Federal Reserve is closely watched by the market. The prices of Option contracts on fed funds futures (traded on the Chicago Board of Trade) can be used to infer the market’s expectations of future Fed policy changes. Based on CME Group 30-Day Fed Fund futures prices, which have long been used to express the market’s views on the likelihood of changes in U.S. monetary policy, the CME Group FedWatch tool allows market participants to view the probability of an upcoming Fed Rate hike. One set of such implied probabilities is published by the Cleveland Fed.
As of December 16, 2008, the most recent change the FOMC has made to the funds target rate is a 75 to 100 basis point cut from 1.0% to a range of zero to 0.25%. According to Jack A. Ablin, chief investment officer at Harris Private Bank, one reason for this unprecedented move of having a range, rather than a specific rate, was because a rate of 0% could have had problematic implications for money market funds, whose fees could then outpace yields. This followed the 50 basis point cut on October 29, 2008, and the unusually large 75 basis point cut made during a special January 22, 2008 meeting, as well as a 50 basis point cut on January 30, 2008, a 75 basis point cut on March 18, 2008, and a 50 basis point cut on October 8, 2008.
Explanation of federal funds rate decisions
When the Federal Open Market Committee wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, price normally falls. The price here is the interest rate (cost of money) and specifically refers to the Federal Funds Rate. Conversely, when the Committee wishes to increase the Fed Funds Rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply. When supply is taken away and everything else remains constant, price (or in this case interest rates) will normally rise.
The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth. In fact, the Committee’s lowering has recently predated recessions, in order to stimulate the economy and cushion the fall. Reducing the Fed Funds Rate makes money cheaper, allowing an influx of credit into the economy through all types of loans.
The charts linked below show the relation between S&P 500 and interest rates.
Bill Gross of PIMCO suggested that in the prior 15 years ending in 2007, in each instance where the fed funds rate was higher than the nominal GDP growth rate, assets such as stocks and/or housing fell.
The money supply has different components, generally broken down into “narrow” and “broad” money, reflecting the different degrees of liquidity (‘spendability’) of each different type, as broader forms of money can be converted into narrow forms of money (or may be readily accepted as money by others, such as personal checks).
For example, demand deposits are technically promises to pay on demand, while savings deposits are promises to pay subject to some withdrawal restrictions, and Certificates of Deposit are promises to pay only at certain specified dates; each can be converted into money, but “narrow” forms of money can be converted more readily. The Federal Reserve directly controls only the most narrow form of money, physical cash outstanding along with the reserves of banks throughout the country (known as M0 or the monetary base); the Federal Reserve indirectly influences the supply of other types of money.
Broad money includes money held in deposit balances in banks and other forms created in the financial system. Basic economics also teaches that the money supply shrinks when loans are repaid; however, the money supply will not necessarily decrease depending on the creation of new loans and other effects. Other than loans, investment activities of commercial banks and the Federal Reserve also increase and decrease the money supply. Discussion of “money” often confuses the different measures and may lead to misguided commentary on monetary policy and misunderstandings of policy discussions.
Monetary policy in the US is determined and implemented by the US Federal Reserve System, commonly referred to as the Federal Reserve. Established in 1913 by the Federal Reserve Act to provide central banking functions, the Federal Reserve System is a quasi-public institution. Ostensibly, the Federal Reserve Banks are 12 private banking corporations; they are independent in their day-to-day operations, but legislatively accountable to Congress through the auspices of Federal Reserve Board of Governors.
The Board of Governors is an independent governmental agency consisting of seven officials and their support staff of over 1800 employees headquartered in Washington, D.C. It is independent in the sense that the Board currently operates without official obligation to accept the requests or advice of any elected official with regard to actions on the money supply,and its methods of funding also preserve independence. The Governors are nominated by the President of the United States, and nominations must be confirmed by the U.S. Senate.
The presidents of the Federal Reserve Banks are nominated by each bank’s respective Board of Directors, but must also be approved by the Board of Governors of the Federal Reserve. The Chairman of the Federal Reserve Board is generally considered to have the most important position, followed by the president of the Federal Reserve Bank of New York. The Federal Reserve System is primarily funded by interest collected on their portfolio of securities from the US Treasury, and the Fed has broad discretion in drafting its own budget, but, historically, nearly all the interest the Federal Reserve collects is rebated to the government each year.
The Federal Reserve has three main mechanisms for manipulating the money supply. It can buy or sell treasury securities. Selling securities has the effect of reducing the monetary base (because it accepts money in return for purchase of securities), taking that money out of circulation. Purchasing treasury securities increases the monetary base (because it pays out hard currency in exchange for accepting securities). Secondly, the discount rate can be changed. And finally, the Federal Reserve can adjust the reserve requirement, which can affect the money multiplier; the reserve requirement is adjusted only infrequently, and was last adjusted in 1992.
In practice, the Federal Reserve uses open market operations to influence short-term interest rates, which is the primary tool of monetary policy. The federal funds rate, for which the Federal Open Market Committee announces a target on a regular basis, reflects one of the key rates for interbank lending. Open market operations change the supply of reserve balances, and the federal funds rate is sensitive to these operations.
In theory, the Federal Reserve has unlimited capacity to influence this rate, and although the federal funds rate is set by banks borrowing and lending funds to each other, the federal funds rate generally stays within a limited range above and below the target (as participants are aware of the Fed’s power to influence this rate).
Assuming a closed economy, where foreign capital or trade does not affect the money supply, when money supply increases, interest rates go down. Businesses and consumers have a lower cost of capital and can increase spending and capital improvement projects. This encourages short-term growth. Conversely, when the money supply falls, interest rates go up, increasing the cost of capital and leading to more conservative spending and investment. The Federal reserve increases interest rates to combat Inflation.
When money is deposited in a bank, it can then be lent out to another person. If the initial deposit was $100 and the bank lends out $100 to another customer the money supply has increased by $100. However, because the depositor can ask for the money back, banks have to maintain minimum reserves to service customer needs. If the reserve requirement is 10% then, in the earlier example, the bank can lend $90 and thus the money supply increases by only $90. The reserve requirement therefore acts as a limit on this multiplier effect. Because the reserve requirement only applies to the more narrow forms of money creation (corresponding to M1), but does not apply to certain types of deposits (such as time deposits), reserve requirements play a limited role in monetary policy.
Currently, the US government maintains over US$800 billion in cash money (primarily Federal Reserve Notes) in circulation throughout the world, up from a sum of less than $30 billion in 1959. Below is an outline of the process which is currently used to control the amount of money in the economy. The amount of money in circulation generally increases to accommodate money demanded by the growth of the country’s production. The process of money creation usually goes as follows:
Banks go through their daily transactions. Of the total money deposited at banks, significant and predictable proportions often remain deposited, and may be referred to as “core deposits.” Banks use the bulk of “non-moving” money (their stable or “core” deposit base) by loaning it out. Banks have a legal obligation to keep a certain fraction of bank deposit money on-hand at all times.
In order to raise additional money to cover excess spending, Congress increases the size of the National Debt by issuing securities typically in the form of a Treasury Bond (see United States Treasury security). It offers the Treasury security for sale, and someone pays cash to the government in exchange. Banks are often the purchasers of these securities, and these securities currently play a crucial role in the process.
The 12-person Federal Open Market Committee, which consists of the heads of the Federal Reserve System (the seven Federal governors and five bank presidents), meets eight times a year to determine how they would like to influence the economy. They create a plan called the country’s “monetary policy” which sets targets for things such as interest rates.
Every business day, the Federal Reserve System engages in Open market operations. If the Federal Reserve wants to increase the money supply, it will buy securities (such as U.S. Treasury Bonds) anonymously from banks in exchange for dollars. If the Federal Reserve wants to decrease the money supply, it will sell securities to the banks in exchange for dollars, taking those dollars out of circulation. When the Federal Reserve makes a purchase, it credits the seller’s reserve account (with the Federal Reserve). The money that it deposits into the seller’s account is not transferred from any existing funds, therefore it is at this point that the Federal Reserve has created High-powered money.
By means of open market operations, the Federal Reserve affects the free reserves of commercial banks in the country. Anna Schwartz explains that “if the Federal Reserve increases reserves, a single bank can make loans up to the amount of its excess reserves, creating an equal amount of deposits”.
Since banks have more free reserves, they may loan out the money, because holding the money would amount to accepting the cost of foregone interest When a loan is granted, a person is generally granted the money by adding to the balance on their bank account.
This is how the Federal Reserve’s high-powered money is multiplied into a larger amount of broad money, through bank loans; as written in a particular case study, “as banks increase or decrease loans, the nation’s (broad) money supply increases or decreases.” Once granted these additional funds, the recipient has the option to withdraw physical currency (dollar bills and coins) from the bank, which will reduce the amount of money available for further on-lending (and money creation) in the banking system.
In many cases, account-holders will request cash withdrawals, so banks must keep a supply of cash handy. When they believe they need more cash than they have on hand, banks can make requests for cash with the Federal Reserve. In turn, the Federal Reserve examines these requests and places an order for printed money with the US Treasury Department. The Treasury Department sends these requests to the Bureau of Engraving and Printing (to make dollar bills) and the Bureau of the Mint (to stamp the coins).
The U.S. Treasury sells this newly printed money to the Federal Reserve for the cost of printing. This is about 6 cents per bill for any denomination. Aside from printing costs, the Federal Reserve must pledge collateral (typically government securities such as Treasury bonds) to put new money, which does not replace old notes, into circulation.This printed cash can then be distributed to banks, as needed.
Though the Federal Reserve authorizes and distributes the currency printed by the Treasury (the primary component of the narrow monetary base), the broad money supply is primarily created by commercial banks through the money multiplier mechanism. One textbook summarizes the process as follows:
“The Fed” controls the money supply in the United States by controlling the amount of loans made by commercial banks. New loans are usually in the form of increased checking account balances, and since checkable deposits are part of the money supply, the money supply increases when new loans are made …
This type of money is convertible into cash when depositors request cash withdrawals, which will require banks to limit or reduce their lending. The vast majority of the broad money supply throughout the world represents current outstanding loans of banks to various debtors. A very small amount of U.S. currency still exists as “United States Notes“, which have no meaningful economic difference from Federal Reserve notes in their usage, although they departed significantly in their method of issuance into circulation. The currency distributed by the Federal Reserve has been given the official designation of “Federal Reserve Notes.”
In 2005, the Federal Reserve held approximately 9% of the national debt as assets against the liability of printed money. In previous periods, the Federal Reserve has used other debt instruments, such as debt securities issued by private corporations. During periods when the national debt of the United States has declined significantly (such as happened in fiscal years 1999 and 2000), monetary policy and financial markets experts have studied the practical implications of having “too little” government debt: both the Federal Reserve and financial markets use the price information, yield curve and the so-called risk free rate extensively.
Experts are hopeful that other assets could take the place of National Debt as the base asset to back Federal Reserve notes, and Alan Greenspan, long the head of the Federal Reserve, has been quoted as saying, “I am confident that U.S. financial markets, which are the most innovative and efficient in the world, can readily adapt to a paydown of Treasury debt by creating private alternatives with many of the attributes that market participants value in Treasury securities.” In principle, the government could still issue debt securities in significant quantities while having no net debt, and significant quantities of government debt securities are also held by other government agencies.
Although the U.S. government receives income overall from seigniorage, there are costs associated with maintaining the money supply. Leading ecological economist and steady-state theoristHerman Daly, claims that “over 95% of our [broad] money supply [in the United States] is created by the private banking system (demand deposits) and bears interest as a condition of its existence,” a conclusion drawn from the Federal Reserve’s ultimate dependence on increased activity in fractional reserve lending when it exercises open market operations.Economist Eric Miller criticizes Daly’s logic because money is created in the banking system in response to demand for the money, which justifies cost.
Thus, use of expansionary open market operations typically generates more debt in the private sector of society (in the form of additional bank deposits). The private banking system charges interest to borrowers as a cost to borrow the money. The interest costs are borne by those that have borrowed, and without this borrowing, open market operations would be unsuccessful in maintaining the broad money supply, though alternative implementations of monetary policy could be used. Depositors of funds in the banking system are paid interest on their savings (or provided other services, such as checking account privileges or physical security for their “cash”), as compensation for “lending” their funds to the bank.
Increases (or contractions) of the money supply corresponds to growth (or contraction) in interest-bearing debt in the country. The concepts involved in monetary policy may be widely misunderstood in the general public, as evidenced by the volume of literature on topics such as “Federal Reserve conspiracy” and “Federal Reserve fraud.”
A few of the uncertainties involved in monetary policy decision making are described by the federal reserve:
While these policy choices seem reasonably straightforward, monetary policy makers routinely face certain notable uncertainties. First, the actual position of the economy and growth in aggregate demand at any time are only partially known, as key information on spending, production, and prices becomes available only with a lag. Therefore, policy makers must rely on estimates of these economic variables when assessing the appropriate course of policy, aware that they could act on the basis of misleading information. Second, exactly how a given adjustment in the federal funds rate will affect growth in aggregate demand—in terms of both the overall magnitude and the timing of its impact—is never certain. Economic models can provide rules of thumb for how the economy will respond, but these rules of thumb are subject to statistical error. Third, the growth in aggregate supply, often called the growth in potential output, cannot be measured with certainty.
In practice, as previously noted, monetary policy makers do not have up-to-the-minute information on the state of the economy and prices. Useful information is limited not only by lags in the collection and availability of key data but also by later revisions, which can alter the picture considerably. Therefore, although monetary policy makers will eventually be able to offset the effects that adverse demand shocks have on the economy, it will be some time before the shock is fully recognized and—given the lag between a policy action and the effect of the action on aggregate demand—an even longer time before it is countered. Add to this the uncertainty about how the economy will respond to an easing or tightening of policy of a given magnitude, and it is not hard to see how the economy and prices can depart from a desired path for a period of time.
The statutory goals of maximum employment and stable prices are easier to achieve if the public understands those goals and believes that the Federal Reserve will take effective measures to achieve them.
Although the goals of monetary policy are clearly spelled out in law, the means to achieve those goals are not. Changes in the FOMC’s target federal funds rate take some time to affect the economy and prices, and it is often far from obvious whether a selected level of the federal funds rate will achieve those goals.
Opinions of the Federal Reserve
The Federal Reserve is lauded by some economists, while being the target of scathing criticism by other economists, legislators, and sometimes members of the general public. The former Chairman of the Federal Reserve Board, Ben Bernanke, is one of the leading academic critics of the Federal Reserve’s policies during the Great Depression.
One of the functions of a central bank is to facilitate the transfer of funds through the economy, and the Federal Reserve System is largely responsible for the efficiency in the banking sector. There have also been specific instances which put the Federal Reserve in the spotlight of public attention. For instance, after the stock market crash in 1987, the actions of the Fed are generally believed to have aided in recovery. Also, the Federal Reserve is credited for easing tensions in the business sector with the reassurances given following the 9/11 terrorist attacks on the United States.
The Federal Reserve has been the target of various criticisms, involving: accountability, effectiveness, opacity, inadequate banking regulation, and potential market distortion. Federal Reserve policy has also been criticized for directly and indirectly benefiting large banks instead of consumers. For example, regarding the Federal Reserve’s response to the 2007–2010 financial crisis, Nobel laureate Joseph Stiglitz explained how the U.S. Federal Reserve was implementing another monetary policy —creating currency— as a method to combat the liquidity trap.
By creating $600 billion and inserting this directly into banks the Federal Reserve intended to spur banks to finance more domestic loans and refinance mortgages. However, banks instead were spending the money in more profitable areas by investing internationally in emerging markets. Banks were also investing in foreign currencies which Stiglitz and others point out may lead to currency wars while China redirects its currency holdings away from the United States.
The Federal Reserve is subject to different requirements for transparency and audits than other government agencies, which its supporters claim is another element of the Fed’s independence. Although the Federal Reserve has been required by law to publish independently auditedfinancial statements since 1999, the Federal Reserve is not audited in the same way as other government agencies. Some confusion can arise because there are many types of audits, including: investigative or fraud audits; and financial audits, which are audits of accounting statements; there are also compliance, operational, and information system audits.
The Federal Reserve’s annual financial statements are audited by an outside auditor. Similar to other government agencies, the Federal Reserve maintains an Office of the Inspector General, whose mandate includes conducting and supervising “independent and objective audits, investigations, inspections, evaluations, and other reviews of Board programs and operations.” The Inspector General’s audits and reviews are available on the Federal Reserve’s website.
The Government Accountability Office (GAO) has the power to conduct audits, subject to certain areas of operations that are excluded from GAO audits; other areas may be audited at specific Congressional request, and have included bank supervision, government securities activities, and payment system activities. The GAO is specifically restricted any authority over monetary policy transactions; the New York Times reported in 1989 that “such transactions are now shielded from outside audit, although the Fed influences interest rates through the purchase of hundreds of billions of dollars in Treasury securities.” As mentioned above, it was in 1999 that the law governing the Federal Reserve was amended to formalize the already-existing annual practice of ordering independent audits of financial statements for the Federal Reserve Banks and the Board; the GAO’s restrictions on auditing monetary policy continued, however.
Congressional oversight on monetary policy operations, foreign transactions, and the FOMC operations is exercised through the requirement for reports and through semi-annual monetary policy hearings. Scholars have conceded that the hearings did not prove an effective means of increasing oversight of the Federal Reserve, perhaps because “Congresspersons prefer to bash an autonomous and secretive Fed for economic misfortune rather than to share the responsibility for that misfortune with a fully accountable Central Bank,” although the Federal Reserve has also consistently lobbied to maintain its independence and freedom of operation.
Fulfillment of wider economic goals
By law, the goals of the Fed’s monetary policy are: high employment, sustainable growth, and stable prices.
Critics say that monetary policy in the United States has not achieved consistent success in meeting the goals that have been delegated to the Federal Reserve System by Congress. Congress began to review more options with regard to macroeconomic influence beginning in 1946 (after World War II), with the Federal Reserve receiving specific mandates in 1977 (after the country suffered a period of stagflation).
Throughout the period of the Federal Reserve following the mandates, the relative weight given to each of these goals has changed, depending on political developments. In particular, the theories of Keynesianism and monetarism have had great influence on both the theory and implementation of monetary policy, and the “prevailing wisdom” or consensus view of the economic and financial communities has changed over the years.
Elastic currency (magnitude of the money multiplier): the success of monetary policy is dependent on the ability to strongly influence the supply of money available to the citizens. If a currency is highly “elastic” (that is, has a higher money multiplier, corresponding to a tendency of the financial system to create more broad money for a given quantity of base money), plans to expand the money supply and accommodate growth are easier to implement. Low elasticity was one of many factors that contributed to the depth of the Great Depression: as banks cut lending, the money multiplier fell, and at the same time the Federal Reserve constricted the monetary base. The depression of the late 1920s is generally regarded as being the worst in the country’s history, and the Federal Reserve has been criticized for monetary policy which worsened the depression. Partly to alleviate problems related to the depression, the United States transitioned from a gold standard and now uses a fiat currency; elasticity is believed to have been increased greatly.
Stable prices – While some economists would regard any consistent inflation as a sign of unstable prices, policymakers could be satisfied with 1 or 2%; the consensus of “price stability” constituting long-run inflation of 1-2% is, however, a relatively recent development, and a change that has occurred at other central banks throughout the world. Inflation has averaged a 4.22% increase annually following the mandates applied in 1977; historic inflation since the establishment of the Federal Reserve in 1913 has averaged 3.4%. In contrast, some research indicates that average inflation for the 250 years before the system was near zero percent, though there were likely sharper upward and downward spikes in that timeframe as compared with more recent times. Central banks in some other countries, notably the German Bundesbank, had considerably better records of achieving price stability drawing on experience from the two episodes of hyperinflation and economic collapse under the country’s previous central bank.
Inflation worldwide has fallen significantly since former Federal Reserve Chairman Paul Volcker began his tenure in 1979, a period which has been called the Great Moderation; some commentators attribute this to improved monetary policy worldwide, particularly in the Organisation for Economic Co-operation and Development.BusinessWeek notes that inflation has been relatively low since mid-1980s and it was during this time that Volcker wrote (in 1995), “It is a sobering fact that the prominence of central banks [such as the Federal Reserve] in this century has coincided with a general tendency towards more inflation, not less. By and large, if the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.'”.
Sustainable growth – The growth of the economy may not be sustainable as the ability for households to save money has been on an overall decline and household debt is consistently rising.
Monetarists who believe that the Great Depression started as an ordinary recession but significant policy mistakes by monetary authorities (especially the Federal Reserve) caused a shrinking of the money supply which greatly exacerbated the economic situation, causing a recession to descend into the Great Depression.
The Federal Reserve has established a library of information on their websites, however, many experts have spoken about the general level of public confusion that still exists on the subject of the economy; this lack of understanding of macroeconomic questions and monetary policy, however, exists in other countries as well. Critics of the Fed widely regard the system as being “opaque“, and one of the Fed’s most vehement opponents of his time, Congressman Louis T. McFadden, even went so far as to say that “Every effort has been made by the Federal Reserve Board to conceal its powers….”
There are, on the other hand, many economists who support the need for an independent central banking authority, and some have established websites that aim to clear up confusion about the economy and the Federal Reserve’s operations. The Federal Reserve website itself publishes various information and instructional materials for a variety of audiences.
Briefly, the theory holds that an artificial injection of credit, from a source such as a central bank like the Federal Reserve, sends false signals to entrepreneurs to engage in long-term investments due to a favorably low interest rate. However, the surge of investments undertaken represents an artificial boom, or bubble, because the low interest rate was achieved by an artificial expansion of the money supply and not by savings. Hence, the pool of real savings and resources have not increased and do not justify the investments undertaken.
These investments, which are more appropriately called “malinvestments”, are realized to be unsustainable when the artificial credit spigot is shut off and interest rates rise. The malinvestments and unsustainable projects are liquidated, which is the recession. The theory demonstrates that the problem is the artificial boom which causes the malinvestments in the first place, made possible by an artificial injection of credit not from savings.
According to Austrian economics, without government intervention, interest rates will always be an equilibrium between the time-preferences of borrowers and savers, and this equilibrium is simply distorted by government intervention. This distortion, in their view, is the cause of the business cycle. Some Austrian economists—but by no means all—also support full reserve banking, a hypothetical financial/banking system where banks may not lend deposits. Others may advocate free banking, whereby the government abstains from any interference in what individuals may choose to use as money or the extent to which banks create money through the deposit and lending cycle.
The Federal Reserve regulates banking, and one regulation under its direct control is the reserve requirement which dictates how much money banks must keep in reserves, as compared to its demand deposits. Banks use their observation that the majority of deposits are not requested by the account holders at the same time.
Currently, the Federal Reserve requires that banks keep 10% of their deposits on hand. Some countries have no nationally mandated reserve requirements—banks use their own resources to determine what to hold in reserve, however their lending is typically constrained by other regulations. Other factors being equal, lower reserve percentages increases the possibility of Bank runs, such as the widespread runs of 1931. Low reserve requirements also allow for larger expansions of the money supply by actions of commercial banks—currently the private banking system has created much of the broad money supply of US dollars through lending activity. Monetary policy reform calling for 100% reserves has been advocated by economists such as: Irving Fisher,Frank Knight, many ecological economists along with economists of the Chicago School and Austrian School. Despite calls for reform, the nearly universal practice of fractional-reserve banking has remained in the United States.
Criticism of private sector involvement
Historically and to the present day, various social and political movements (such as social credit) have criticized the involvement of the private sector in “creating money”, claiming that only the government should have the power to “make money”. Some proponents also support full reserve banking or other non-orthodox approaches to monetary policy. Various terminology may be used, including “debt money”, which may have emotive or political connotations. These are generally considered to be akin to conspiracy theories by mainstream economists and ignored in academic literature on monetary policy.
He is the author of The Growth Experiment: How the New Tax Policy is Transforming the U.S. Economy (Basic Books, New York, 1990, ISBN 978-0465050703), Economic Puppetmasters: Lessons from the Halls of Power (AEI Press, Washington, D.C., 1999, ISBN 978-0844740812), What A President Should Know …but most learn too late: An Insiders View On How To Succeed In The Oval Office (Rowman & Littlefield Publishers, Inc., Maryland, 2008, ISBN 978-0742562226), and Conspiracies of the Ruling Class: How to Break Their Grip Forever (Simon & Schuster, 2016, ISBN 978-1501144233). Also he has contributed numerous articles to professional publications. His honors and awards include the Distinguished Public Service Award of the Boston Bar Association, 1994; an honorary degree from Bowdoin College, 1993; selection as a Citicorp/Wriston Fellow for Economic Research, 1988; and the Outstanding Doctoral Dissertation Award from the National Tax Association, 1985.
From 1997 to January 2001, Lindsey was a Resident Scholar and holder of the Arthur F. Burns Chair in Economics at the American Enterprise Institute in Washington, D.C. He was also Managing Director of Economic Strategies, an economic advisory service based in New York City. During 1999 and throughout 2000 he served as then-Governor George W. Bush’s chief economic advisor for his presidential campaign. He is a former associate professor of Economics at Harvard University.
Lindsey is famous for spotting the emergence of the late 1990s U.S. stock market bubble back in 1996 while a Governor of the Federal Reserve. According to the meeting transcripts for September of that year, Lindsey challenged the expectation that corporate earnings would grow 11½ percent a year continually. He said, “Readers of this transcript five years from now can check this fearless prediction: profits will fall short of this expectation.” According to the Bureau of Economic Analysis, corporate profits as a share of national income eroded from 1997 until 2001. Stock prices eventually collapsed, starting their decline in March 2000, though the S&P500 remained above its 1996 level, casting doubt on the assertion that there was a stock market bubble in 1996.
In contrast to Chairman Greenspan, Lindsey argued that the Federal Reserve had an obligation to prevent the stock market bubble from growing out of control. He argued that “the long term costs of a bubble to the economy and society are potentially great…. As in the United States in the late 1920s and Japan in the late 1980s, the case for a central bank ultimately to burst that bubble becomes overwhelming. I think it is far better that we do so while the bubble still resembles surface froth and before the bubble carries the economy to stratospheric heights.” During the 2000 Presidential campaign, Governor Bush was criticized for picking an economic advisor who had sold all of his stock in 1998.
According to the Washington Post, Lindsey was on an advisory board to Enron along with Paul Krugman before joining the White House. Lindsey and his colleagues warned Enron that the economic environment was riskier than they perceived.
Cost of the Iraq War
On September 15, 2002, in an interview with the Wall Street Journal, Lindsey estimated the high limit on the cost of the Bush administration’s plan in 2002 of invasion and regime change in Iraq to be 1–2% of GNP, or about $100–$200 billion.Mitch Daniels, Director of the Office of Management and Budget, discounted this estimate as “very, very high” and Defense Secretary Donald Rumsfeld stated that the costs would be under $50 billion. Rumsfeld called Lindsey’s estimate “baloney”.
As of 2007 the cost of the invasion and occupation of Iraq exceeded $400 billion, and the Congressional Budget Office in August 2007 estimated that appropriations would eventually reach $1 trillion or more.
In October 2007, the Congressional Budget Office estimated that by 2017, the total costs of the wars in Iraq and Afghanistan could reach $2.4 trillion. In response, DemocraticRepresentativeAllen Boyd criticized the administration for firing Lindsey, saying “They found him a job outside the administration.”
^ Jump up to:abWolk, Martin (2006-05-17). “Cost of Iraq war could surpass $1 trillion”. MSNBC. Retrieved 2008-03-10. Back in 2002, the White House was quick to distance itself from Lindsey’s view. Mitch Daniels, director of the White House budget office, quickly called the estimate “very, very high.” Lindsey himself was dismissed in a shake-up of the White House economic team later that year, and in January 2003, Defense Secretary Donald Rumsfeld said the budget office had come up with “a number that’s something under $50 billion.” He and other officials expressed optimism that Iraq itself would help shoulder the cost once the world market was reopened to its rich supply of oil.
Story 1: Breaking News — Part 2 of 3, Trump’s Timid Tax Tweak — Does Not Abolish Income Taxes or IRS and Does Not Abolish Regressive Payroll Taxes For Social Security and Medicare — Trump Wrong on Economic Incentives — Could Have Been A Contender — Carson (Flat Tax), Cruz (Flat Tax) , Paul (Flat Tax), and Huckabee (FairTax) — All Have Better Tax Plans — Trump Is Just Another Progressive Country Club “Rockefeller” Republican — Dump Trump! — Fair Tax Less Is The Answer To Making America Great Again — Videos
Acceptance Speech as the 1964 Republican Presidential candidate
“I would remind you that extremism in the defense of liberty is no vice!
And let me remind you also that moderation in the pursuit of justice is no virtue!”
~Senator Barry Goldwater
Two of Ten planks of Karl Marx’s
ARE Americans practicing Communism?
2. A heavy progressive or graduated income tax.
Americans know this as misapplication of the 16th Amendment of the U.S. Constitution, 1913, The Social Security Act of 1936.; Joint House Resolution 192 of 1933; and various State “income” taxes. We call it “paying your fair share”.
3. Abolition of all rights of inheritance.
Americans call it Federal & State estate Tax (1916); or reformed Probate Laws, and limited inheritance via arbitrary inheritance tax statutes.
Gov. Mike Huckabee Speech at “Iowa Freedom Summit” – Complete
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Pure Communism VS Pure Socialism VS Pure Capitalism
Trump Could Have Been A Contender
On the Waterfront,
“I coulda been a contender”
Trump Reveals Himself As A Loser
The Beatles – I’m a Loser – Subtitulado en español
Mr. Conservative: Barry Goldwater at the 1964 Republican National Convention
Ronald Reagan Support of Barry Goldwater (10/27/1964)
A Classic Critique of Government Intervention & Manipulation in Markets: The Road to Serfdom (1994)
F.A. Hayek: Biography, Economics, Road to Serfdom, Quotes, Books, Nobel Prize (2001)
The New Road to Serfdom: Lessons to Learn from European Policy
Mind blowing speech by Robert Welch in 1958 predicting Insider’s plans to destroy America.
TAX REFORM THAT WILL MAKE AMERICA GREAT AGAIN
The Goals Of Donald J. Trump’s Tax Plan
Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals:
Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages.
Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money.
Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
Doesn’t add to our debt and deficit, which are already too large.
The Trump Tax Plan Achieves These Goals
If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls. They get a new one page form to send the IRS saying, “I win,” those who would otherwise owe income taxes will save an average of nearly $1,000 each.
All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.
No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.
No family will have to pay the death tax. You earned and saved that money for your family, not the government. You paid taxes on it when you earned it.
The Trump Tax Plan Is Revenue Neutral
The Trump tax cuts are fully paid for by:
Reducing or eliminating most deductions and loopholes available to the very rich.
A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.
Reducing or eliminating corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.
DETAILS OF DONALD J. TRUMP’S TAX PLAN
America needs a bold, simple and achievable plan based on conservative economic principles. This plan does that with needed tax relief for all Americans, especially the working poor and middle class, pro-growth tax reform for all sizes of businesses, and fiscally responsible steps to ensure this plan does not add to our enormous debt and deficit.
This plan simplifies the tax code by taking nearly 50% of current filers off the income tax rolls entirely and reducing the number of tax brackets from seven to four for everyone else. This plan also reduces or eliminates loopholes used by the very rich and special interests made unnecessary or redundant by the new lower tax rates on individuals and companies.
The Trump Tax Plan: A Simpler Tax Code For All Americans
When the income tax was first introduced, just one percent of Americans had to pay it. It was never intended as a tax most Americans would pay. The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money.
For those Americans who will still pay the income tax, the tax rates will go from the current seven brackets to four simpler, fairer brackets that eliminate the marriage penalty and the AMT while providing the lowest tax rate since before World War II:
Income Tax Rate
Long Term Cap Gains/ Dividends Rate
Heads of Household
$0 to $25,000
$0 to $50,000
$0 to $37,500
$25,001 to $50,000
$50,001 to $100,000
$37,501 to $75,000
$50,001 to $150,000
$100,001 to $300,000
$75,001 to $225,000
$150,001 and up
$300,001 and up
$225,001 and up
With this huge reduction in rates, many of the current exemptions and deductions will become unnecessary or redundant. Those within the 10% bracket will keep all or most of their current deductions. Those within the 20% bracket will keep more than half of their current deductions. Those within the 25% bracket will keep fewer deductions. Charitable giving and mortgage interest deductions will remain unchanged for all taxpayers.
Simplifying the tax code and cutting every American’s taxes will boost consumer spending, encourage savings and investment, and maximize economic growth.
Business Tax Reform To Encourage Jobs And Spur Economic Growth
Too many companies – from great American brands to innovative startups – are leaving America, either directly or through corporate inversions. The Democrats want to outlaw inversions, but that will never work. Companies leaving is not the disease, it is the symptom. Politicians in Washington have let America fall from the best corporate tax rate in the industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the industrialized world. That is unacceptable. Under the Trump plan, America will compete with the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst to one of the best.
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
These lower rates will provide a tremendous stimulus for the economy – significant GDP growth, a huge number of new jobs and an increase in after-tax wages for workers.
The Trump Tax Plan Ends The Unfair Death Tax
The death tax punishes families for achieving the American dream. Therefore, the Trump plan eliminates the death tax.
The Trump Tax Plan Is Fiscally Responsible
The Trump tax cuts are fully paid for by:
Reducing or eliminating deductions and loopholes available to the very rich, starting by steepening the curve of the Personal Exemption Phaseout and the Pease Limitation on itemized deductions. The Trump plan also phases out the tax exemption on life insurance interest for high-income earners, ends the current tax treatment of carried interest for speculative partnerships that do not grow businesses or create jobs and are not risking their own capital, and reduces or eliminates other loopholes for the very rich and special interests. These reductions and eliminations will not harm the economy or hurt the middle class. Because the Trump plan introduces a new business income rate within the personal income tax code, they will not harm small businesses either.
A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate. Since we are making America’s corporate tax rate globally competitive, it is only fair that corporations help make that move fiscally responsible. U.S.-owned corporations have as much as $2.5 trillion in cash sitting overseas. Some companies have been leaving cash overseas as a tax maneuver. Under this plan, they can bring their cash home and put it to work in America while benefitting from the newly-lowered corporate tax rate that is globally competitive and no longer requires parking cash overseas. Other companies have cash overseas for specific business units or activities. They can leave that cash overseas, but they will still have to pay the one-time repatriation fee.
An end to the deferral of taxes on corporate income earned abroad. Corporations will no longer be allowed to defer taxes on income earned abroad, but the foreign tax credit will remain in place because no company should face double taxation.
Reducing or eliminating some corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.
Middle class, businesses get break, but overseas profits would face a one-time 10% levy
By MONICA LANGLEY And JOHN D. MCKINNON
Republican presidential candidate Donald Trump unveiled an ambitious tax plan Monday that he says would eliminate income taxes for millions of households, lower the tax rate on all businesses to 15% and change tax treatment of companies’ overseas earnings.
Under the Trump plan, no federal income tax would be levied against individuals earning less than $25,000 and married couples earning less than $50,000. The Trump campaign estimates that would reduce taxes to zero for 31 million households that currently pay at least some income tax. The highest individual income-tax rate would be 25%, compared with the current 39.6% rate.
Many middle-income households would have a lower tax rate under Mr. Trump’s proposal, but because high-income households generally pay income tax at much higher rates, his proposed across-the-board rate cut could have a positive impact on them, too. For example, an analysis of Jeb Bush’s plan—taxing individuals’ incomes at no more than 28%—by the business-backed Tax Foundation found that the biggest percentage winners in after-tax income would be the top 1% of earners.
Mr. Trump’s plan appears designed to help him, as the GOP front-runner, cement his standing as a populist—though that message is complicated by the fact that the billionaire, like other Republican leaders, would eliminate the estate tax.
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“My plan will bring sanity, common sense and simplification to our country’s catastrophic tax code,” Mr. Trump said in an interview. “It will create jobs and incentives of all kinds while simultaneously growing the economy.”
But Mr. Trump will face a challenge in convincing skeptics that his aggressive tax cuts can be implemented without adding to the federal deficit.
To pay for the proposed tax benefits, the Trump plan would eliminate or reduce deductions and loopholes to high-income taxpayers, and would curb some deductions and other breaks for middle-class taxpayers by capping the level of individual deductions, a politically dicey proposition. Mr. Trump also would end the “carried interest” tax break, which allows many investment-fund managers to pay lower taxes on much of their compensation.
A significant revenue gain would come from a one-time tax on overseas profits that could encourage U.S. multinational corporations to return an estimated $2.1 trillion in cash now sitting offshore, largely to avoid U.S. taxes. His proposal would impose a mandatory 10% tax on all of that money, even if the money stays overseas, but allow a few years for the tax to be paid. The Trump campaign estimates that many companies would choose to bring their money back home, boosting jobs and investment in the U.S.
Mr. Trump also would impose an immediate tax on overseas earnings of American corporations; currently, such tax payments can be deferred. All told, the campaign says the plan would be revenue neutral—neither raising nor lowering federal revenues—by the third year and then begin adding revenue.
With the tax plan’s release, Mr. Trump is moving to quell criticism that his campaign has been more style and less substance. This tax proposal follows his well-known immigration plan in the summer and one on gun rights last week.
Mr. Trump saves some money and fiscal headaches by skipping some of the big but complicated and costly changes that other candidates have embraced, such as business-expensing breaks and so-called territorial taxation for multinational corporations.
On the individual side, Mr. Trump would consolidate the current seven rates to four, of 0%, 10%, 20% and 25%. Those changes alone would exempt all married couples making $50,000 or less from the income tax, as well as singles making $25,000 or less.
The 10% bracket would apply to incomes from $50,000 to $100,000 for a married couple; the current 10% bracket has a ceiling of $18,450. The new 25% top bracket would apply to married couples’ incomes in excess of $300,000, which currently are subject to rates as high as 39.6%. Mr. Trump also would cut the top capital gains rate to 20%, from the current 23.8%. And he would eliminate the alternative minimum tax.
But the candidate doesn’t propose to end taxation of individuals’ investment income, as some other Republicans propose, nor would he expand the standard deduction, child-credit and other middle-class breaks as some other GOP candidates have suggested.
For businesses, Mr. Trump’s 15% rate is among the lowest that have been proposed so far. Rand Paul has proposed a 14.5% flat-tax rate for all types of income. Marco Rubio, another candidate with a detailed plan, would tax all business income at no more than 25%. Mr. Bush has proposed a 20% top corporate rate. The current top corporate tax rate is 35%, and small business income is subject to rates of as much as 39.6% (although many small businesses pay out a lot of their profits as lower-taxed dividends or capital gains). The campaign argues the rate would be among the lowest among industrialized nations, giving U.S. companies an edge to compete.
The lower corporate rates would provide “a tremendous stimulus for the economy,” the campaign’s plan argues. Mr. Trump would not, however, allow businesses to expense all their new equipment purchases, as some other Republicans do.
The plan proposes to simplify tax filing for many lower- to middle-income households. The plan says that some 42 million households that currently file tax forms to establish that they don’t owe any federal income tax now will be able to file their returns on a single page.
The 31 million households that have been paying some taxes but now won’t have any tax liability can use the same single-page, and keep an average of $1,000 in tax savings, the Trump campaign says. Today, 36% of American households today pay no income taxes, and that number would grow to 50%.
The Trump plan would raise revenues in at least a couple of significant ways. It would limit the value of individual deductions, with middle-class households keeping all or most of their deductions, higher-income taxpayers keeping around half of theirs, and the very wealthy losing a significant chunk of theirs. It also would wipe out many corporate deductions.
All taxpayers would keep their current deductions for mortgage-interest on their homes and charitable giving.
The plan also proposes capping the amount of interest payments that businesses can deduct now, a change phased in over a long period, and would impose a corporate tax on future foreign earnings of American multinationals.
ARE Americans practicing Communism?Read the 10 Planks of The Communist Manifesto to discover the truth and learn how to know your enemy…
Karl Marx describes in his communist manifesto, the ten steps necessary to destroy a free enterprise system and replace it with a system of omnipotent government power, so as to effect a communist socialist state. Those ten steps are known as the Ten Planks of The Communist Manifesto… The following brief presents the original ten planks within theCommunist Manifesto written by Karl Marx in 1848, along with the American adopted counterpart for each of the planks. From comparison it’s clear MOST Americans have by myths, fraud and deception under the color of law by their own politicians in both the Republican and Democratic and parties, been transformed into Communists.
Another thing to remember, Karl Marx in creating the Communist Manifesto designed these planks AS A TEST to determine whether a society has become communist or not. If they are all in effect and in force, then the people ARE practicing communists.
Communism, by any other name is still communism, and is VERY VERY destructive to the individual and to the society!!
The 10 PLANKS stated in the Communist Manifesto and some of their American counterparts are…
1. Abolition of private property and the application of all rents of land to public purposes. Americans do these with actions such as the 14th Amendment of the U.S. Constitution (1868), and various zoning, school & property taxes. Also the Bureau of Land Management (Zoning laws are the first step to government property ownership)
2. A heavy progressive or graduated income tax. Americans know this as misapplication of the 16th Amendment of the U.S. Constitution, 1913, The Social Security Act of 1936.; Joint House Resolution 192 of 1933; and various State “income” taxes. We call it “paying your fair share”.
3. Abolition of all rights of inheritance. Americans call it Federal & State estate Tax (1916); or reformed Probate Laws, and limited inheritance via arbitrary inheritance tax statutes.
4. Confiscation of the property of all emigrants and rebels. Americans call it government seizures, tax liens, Public “law” 99-570 (1986); Executive order 11490, sections 1205, 2002 which gives private land to the Department of Urban Development; the imprisonment of “terrorists” and those who speak out or write against the “government” (1997 Crime/Terrorist Bill); or the IRS confiscation of property without due process. Asset forfeiture laws are used by DEA, IRS, ATF etc…).
5. Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly. Americans call it the Federal Reserve which is a privately-owned credit/debt system allowed by the Federal Reserve act of 1913. All local banks are members of the Fed system, and are regulated by the Federal Deposit Insurance Corporation (FDIC) another privately-owned corporation. The Federal Reserve Banks issue Fiat Paper Money and practice economically destructive fractional reserve banking.
6. Centralization of the means of communications and transportation in the hands of the State. Americans call it the Federal Communications Commission (FCC) and Department of Transportation (DOT) mandated through the ICC act of 1887, the Commissions Act of 1934, The Interstate Commerce Commission established in 1938, The Federal Aviation Administration, Federal Communications Commission, and Executive orders 11490, 10999, as well as State mandated driver’s licenses and Department of Transportation regulations.
7. Extension of factories and instruments of production owned by the state, the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan. Americans call it corporate capacity, The Desert Entry Act and The Department of Agriculture… Thus read “controlled or subsidized” rather than “owned”… This is easily seen in these as well as the Department of Commerce and Labor, Department of Interior, the Environmental Protection Agency, Bureau of Land Management, Bureau of Reclamation, Bureau of Mines, National Park Service, and the IRS control of business through corporate regulations.
8. Equal liability of all to labor. Establishment of industrial armies, especially for agriculture. Americans call it Minimum Wage and slave labor like dealing with our Most Favored Nation trade partner; i.e. Communist China. We see it in practice via the Social Security Administration and The Department of Labor. The National debt and inflation caused by the communal bank has caused the need for a two “income” family. Woman in the workplace since the 1920’s, the 19th amendment of the U.S. Constitution, the Civil Rights Act of 1964, assorted Socialist Unions, affirmative action, the Federal Public Works Program and of course Executive order 11000.
9. Combination of agriculture with manufacturing industries, gradual abolition of the distinction between town and country, by a more equitable distribution of population over the country. Americans call it the Planning Reorganization act of 1949 , zoning (Title 17 1910-1990) and Super Corporate Farms, as well as Executive orders 11647, 11731 (ten regions) and Public “law” 89-136. These provide for forced relocations and forced sterilization programs, like in China.
10. Free education for all children in public schools. Abolition of children’s factory labor in its present form. Combination of education with industrial production. Americans are being taxed to support what we call ‘public’ schools, but are actually “government force-tax-funded schools ” Even private schools are government regulated. The purpose is to train the young to work for the communal debt system. We also call it the Department of Education, the NEA and Outcome Based “Education” . These are used so that all children can be indoctrinated and inculcated with the government propaganda, like “majority rules”, and “pay your fair share”. WHERE are the words “fair share” in the Constitution, Bill of Rights or the Internal Revenue Code (Title 26)?? NO WHERE is “fair share” even suggested !! The philosophical concept of “fair share” comes from the Communist maxim, “From each according to their ability, to each according to their need! This concept is pure socialism. … America was made the greatest society by its private initiative WORK ETHIC … Teaching ourselves and others how to “fish” to be self sufficient and produce plenty of EXTRA commodities to if so desired could be shared with others who might be “needy”… Americans have always voluntarily been the MOST generous and charitable society on the planet.
Do changing words, change the end result? … By using different words, is it all of a sudden OK to ignore or violate the provisions or intent of the Constitution of the united States of America?????
The people (politicians) who believe in the SOCIALISTIC and COMMUNISTIC concepts, especially those who pass more and more laws implementing these slavery ideas, are traitors to their oath of office and to the Constitution of the united States of America… KNOW YOUR ENEMY …Remove the enemy from within and from among us.
VOTE LIBERTARIAN, the only political party in America that still firmly supports and diligently abides by the Constitution of the united States of America.
Story 1: Trump Is Not A Conservative Nor A Liberal, But He Is An American Speaking And Advocating What The American People Are Demanding A New Direction For The Country and Make America Great Again Starting with Enforcing Immigration Law — Deal with It Political Elitist Establishment (PEEs) of Democratic and Republican Parties — Trump is Going To Win! — President Trump You Are Hired! — Videos
Donald Trump Gives Wildly Entertaining Speech in Nashville, TN (8-29-15)
Highlights of Donald Trump’s wildly entertaining speech in Nashville, TN at the 2015 NFRA Presidential Preference Convention, which took place on August 29, 2015.
Donald Trump: I was a Democrat
Donald Trump: Simplify the Tax Code
Donald Trump on Taxes – I Believe the Rich Should Pay More – Fox News – Hannity
Is Donald Trump serious about tax reform?
Is Donald Trump Serious About Tax Reform?
Would Trump’s tax plan jump start the US economy?
FairTax: Fire Up Our Economic Engine (Official HD)
The FairTax: It’s Time
Congressman Woodall Discusses the FairTax
Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor
What is the FairTax legislation?
How does the FairTax affect the economy?
Is the FairTax truly progressive?
How does the “prebate” work?
Is it fair for rich people to get the same prebate as poor people?
How does the FairTax impact the middle class?
How does the FairTax impact savings?
What is the impact of the FairTax on business?
Will the FairTax lead to a massive underground economy?
Are any significant economies funded by a sales tax?
How is the FairTax collected?
Why is the FairTax better than a flat income tax?
How does the FairTax affect compliance costs?
How does the FairTax rate compare to today’s?
Will the FairTax hurt home ownership with no mortgage interest deduction?
How does the FairTax impact charitable giving?
Isn’t it a stretch to say the IRS will go away?
Freedom from the IRS! – FairTax Explained in Detail
Donald Trump and Ann Coulter Hold Rally in Iowa (FULL)
Mr. Trump’s 757
Hitler reacts to Donald Trump’s presidential bid
Ann Coulter Flips Out on Hannity Over Immigration: You’re ‘Like A Liberal Making A Silly Argument!’
Ann Coulter Introduces Donald Trump at Iowa Speech, 2016 Presidential Campaign Rally 8 25
Victor Davis Hanson: War in the Post Modern World – why the new laws of conflict are surreal
What Makes Donald Run?
by VICTOR DAVIS HANSON September 1, 2015
He’s giving fed-up Republicans something other candidates are not.
Donald Trump has at least three things going for him. One, the mood of the country remains foul and fed-up — and volatile to the point that conventional wisdom is hardly reliable. Two, Trump has turned invective and narcissism into an art form, and his simplistic putdowns seem to garner ever more attention even as they become more monotonous and banal — largely because they are directed at a despised media elite. Three, the Democratic party is in worse shape than the Republican party. Apparently Trump’s attacks can still safely be savored as long as the Democrats are imploding.
Trump’s successes have come about not because of a brilliant new Contract with America or because he is reassuringly conservative on the issues. His diehard supporters — and even those who would never confess that they derive a perverse and stealthy delight from watching him put down the New York/Washington political and journalistic elite — don’t care that just in the last decade he has flipped on all the issues. They apparently ignore the fact that Trump is often self-contradictory, as he wings his way through endless interviews and blustery press conferences.
What fuels his candidacy is attitude — in particular, disdain for those who undeservedly believe they warrant deference. Behind the bombast and the waving hands, he gives the impression of having contempt for the ruling class, of which he is so intimately a part. He winks at us as if to say, “I hang out with these people, and, trust me, they are even worse than you suspect.” His voice has the brash accents of the New York sidewalk, rather than a passive-aggressive Ivy League modulation. His narcissism is unlike Barack Obama’s serious sort (e.g., “I think that I’m a better speechwriter than my speechwriters. I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m gonna think I’m a better political director than my political director”). Indeed, Trump’s egotism is a caricature of narcissism itself, in which the only adjectives are superlatives and the only measure of being “great” and “a winner” is net worth or celebrity. Yet somehow TRUMP plastered over everything does not bother people as much as Barack Obama’s faux-Greek columns, Latinate mottos, and promises to cool the cosmos.
After nearly seven years of Obama, the public is worn out by sanctimoniousness — by all the Professor Gates/Trayvon Martin/Ferguson lectures on race by an abject racialist, by all the sermons on climate change by a global jet-setter, by all the community-organizing banality by one who always has preferred the private school and the tony neighborhood, by all the us-versus-the-1-percent warfare by one who feels at home on the golf course only with celebrities and stock hounds. Given all that, the Republican base, at least for a few more weeks, wants someone to be unapologetically unacceptable — both to the liberal establishment that Obama ushered in, and to the wink-and-nod elite Republican opposition.
It is said that Trump appeals most to the pissed-off white man of yesteryear. Perhaps. But in the age of a multiracial United States it is more proper to say than he appeals to the infuriated targets of elite disdain, people who are tired of Democratic slurs about “tired old white men” — as the exempt white and (most of them) old Sanders, Biden, O’Malley, and Webb wait for a mature white woman to fade, while hoping that other old white men like Kerry, Gore, and Brown don’t wade in.
Trumpers are tired of a Republican establishment warning them — even if presciently so — that enforcement of federal immigration law is impossible because of the Latino vote, that even demanding a simple ID at the polling place may alienate the black vote, that stopping federal funding to the grotesque Planned Parenthood will lose the female vote, and that not rushing in to sanctify gay marriage will turn off gay voters. Rank-and-file Republicans are worn out from being lectured that no one can win without the Latino vote (10 percent of the electorate), the black vote (12 percent), and the Asian vote (5 percent ) — all on the premise that to speak in similar terms about getting a large chunk of the white vote (70 percent ) would be somehow racist. There is something Ajaxian, then — something of the Charge of the Light Brigade or the last scene in Breaker Morant — inherent in the Trump call to make America great again.
Telejournalists recycle the trite wisdom that with today’s electorate Trump must lose because he will not garner x percentages of y racial-block voters. They don’t have a clue that the Democratic party — in its worst shape since the 1920s — is in danger of nullifying such racial calculations by creating a white voting block not seen in the modern era. If it is true that Trump probably cannot win unless he takes somewhere around 62 percent of the white vote (depending on the particular state), it is also true that the next Democrat probably cannot win without 40 percent of it. Any of the Democrats is just as much in danger of not reaching 40 percent as Trump is of not reaching 62 percent.
Trump’s trademark is venom directed against the “elite.” But is not Trump a member of the elite himself? Yes, but that is the point. The public has less problem with the brash, take-no-prisoners plutocrat than with the current feuding Hatfields and McCoys of the Ivy League–trained stable, the Medici-like intermarriages between D.C./New York politicians and journalists, and the hip world of the metrosexual that serves up our entertainment and news.
So a public far larger than just the Tea Party was ready for a populist grandstander. And Trump so far has managed to make real outliers — non-establishment political mavericks like Marco Rubio, Rand Paul, Scott Walker, and Chris Christie, who were the choices of the Tea Party movements just a fortnight ago — look like Eric Cantor/Mitch McConnell company men. That such gifted conservative politicos are considered functionaries is abjectly unfair, but it is nonetheless the jaded perception so far of much of the Republican electorate.
Trump sized up a favorable landscape in 2015–16, and he grasped that the dissatisfaction arose from more than Obama’s profligate borrowing, amnesties, no-growth economic policies, lead-from-behind and reset foreign policies, and hands-up-don’t-shoot racial posturing. The populist furor was also fueled by style. Voters are tired of the DNA of professional politicians, the 24/7 politically correct equivocation, the “I take full responsibility” media pseudo-apology, and the Pajama Boy nasal snarkiness.
Trump has had the skills to turn the primary campaign so far into a war of raw emotion. He channels General George S. Patton — who practiced his facial expressions in front of the mirror and whose line about preferring to kill rather than die for your country Trump recalibrated in his tasteless attack on John McCain. Trump understands that an army really does not march just on its stomach, but is fueled by its emotions.
Recently I asked three quite different Americans — who, on ordinary calculations, should not like Trump — what they thought of him. The first s a local Mexican-American barber. He could offer no logical rationale for his enjoyment of the Trump candidacy other than that Trump is a “jefe” — a big man who gets things done by any means necessary, a crew boss to the world. I sensed that there was also an embarrassed weariness with illegal immigration.
We talk of Latino voters as hating Trump, and some may. But some Latinos are at Ground Zero of illegal immigration. Whereas their elite leaders see profit in millions of Mexicans trekking into the United States, the less well connected see only their local emergency rooms overwhelmed, their jails full, their social services breaking under the influx, and their schools turned into remediation in both English and Spanish.
Another person I quizzed about Trump is a seasoned, though cynical, PhD. His take? Trump is Maximus, and the primary campaign is his arena: We are all thumbs-up/thumbs-down spectators who enjoy the blood sport.
This man plans to jump ship, but not until Trump’s ship is capsizing and there is a nice raft alongside.
The third is a middle-aged professional woman, nominally a Democrat, whose attitude can be summed up as “touché.” The reactive Trump is quite savvy in his selected feuds with supposed untouchables, whom the public occasionally would like to see touched. John McCain started that attacks on Trump, and previously had waved the bloody shirt a bit too much; Megyn Kelly is a bit more than a fine professional journalist and capable legal scholar, at least in the way she dresses and preps for the camera; and Jorge Ramos is a hipper version of an obnoxious Howard Dean, snickering and bloviating ad nauseam. Trump, then, is leveling the playing field for the exhausted TV viewer. His welcome attacks turn our attention away from his own considerable liabilities — as long as he can continue to select objects and methodologies of attack that entertain.
All the above is no reason to become enthusiastic about Trump, but no reason to turn him off quite yet either.
Then there is Trump himself. Any businessman who can become or even remain a billionaire in today’s climate in any field other than banking, trading, or insuring is necessarily talented. Most stars cannot sustain a TV reality show for more than a year or two, much less 14 — proof that Trump has both acting talent and entertainment savvy. It is easy to mock Trump’s hair and sprayed-on tan, but at 69 he seems healthier and more robust to the eye than many who are ten years younger. We forget his age: If he were elected in 2016, he would be the oldest president to be inaugurated and the first since Dwight Eisenhower (whose prior politics likewise were murky) to be elected to the presidency without having held political office before. The supposedly far more seasoned, and slightly younger, Hillary Clinton in comparison comes across as inept, crabby, sarcastic, and a decade older. In other words, in terms of the political assets of our wired age — money, media savvy, celebrity, showmanship, looks, and vigor — Trump is a fit for the times.
For a few weeks longer, Republicans can safely enjoy Trump even as pundits and politicos gnash their teeth in terror that his no-brakes locomotive has too much momentum to be sidetracked. But remember that, so far, the front-running Trump is not fearing an indictment, avoiding reporters, calling his political rivals terrorists, or evoking the Holocaust through references to boxcars — and the alternatives, like Rubio, Walker, Carson, Fiorina, and Kasich, are not socialists unregistered in the Republican party. Mitt Romney, John McCain, and Bob Dole are not waiting in the wings. So Trump can snort and rampage through the china shop, because much of the merchandise is still tottering on the shelf. In the Democrats’ case, the shards are already on the floor.
If Trump brings catharsis for the smoldering anger of the base, if the other candidates appropriate some of Trump’s slash-and-burn style but accompany it with a coherent agenda, if Trump gratuitously slurs yet another race/class/gender icon and confirms he is more a bully than a truth-teller, and if Hillary’s legal problems disappear, then Trump may go back to The Apprentice. But for a while longer that still seems a lot of ifs.
— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution and the author, most recently, of The Savior Generals.
The move is viewed as an attempt to force the front-runner’s hand after his refusal to rule out a third-party bid.
The GOP is taking its most aggressive step yet to force Donald Trump’s hand.
The Republican National Committee on Wednesday privately reached out to GOP presidential candidates to ask whether they’d be willing to sign a pledge stating they would not run as an independent candidate in the event they fail to win the Republican nomination in 2016.
The move is an implicit challenge to Trump, who pointedly refused to rule out a third-party run during the first GOP debate. He was the only candidate who declined.
The language of the draft pledge speaks directly to the issue vexing Republicans – the possibility that the billionaire could choose to wage a third party bid if he fails to win the GOP nomination, a prospect that could seriously damage the GOP’s prospects of reclaiming the White House. Tapping into deep anti-establishment animosity among the conservative grassroots, Trump has surged to the lead of the deepest presidential field in recent memory. If Trump were to pull just a fraction of the vote as an independent, write-in or third party candidate, it could be enough to sink the eventual Republican nominee.
“I [name] affirm that if I do not win the 2016 Republican nomination for president of the United States I will endorse the 2016 Republican presidential nominee regardless of who it is,” the pledge reads. “I further pledge that I will not seek to run as an independent or write-in candidate nor will I seek or accept the nomination for president of any other party.”
At least two campaigns reported Wednesday that they received a call from Katie Walsh, RNC chief of staff, asking if they would be willing to sign such a pledge.
An RNC spokeswoman, Allison Moore, declined to comment. The Trump campaign did not respond to a request for comment.
Trump and RNC chairman Reince Priebus are slated to meet in New York City on Thursday, a Trump spokeswoman confirmed. The two are also expected to appear at a press conference.
The relationship between the RNC and Trump has been fraught with tension since Trump joined the race this summer. Trump’s incendiary remarks about Mexicans and immigration have alarmed top Republicans who fear it will further alienate the fast-growing demographic and embarrass the party, leading Priebus to reach out to the billionaire in an attempt to convince him to tone down his rhetoric. But Trump turned the tables on Priebus and gave a contradictory account, insisting that the RNC chairman merely acknowledged that he had “hit a nerve” with the electorate.
Since then, with the billionaire mogul dominating the race for the party’s nomination, Republicans have taken a wary approach. Priebus virtually went dark on Trump following the real estate mogul’s pushback, declining to further fuel the discussion with public remarks. (Scheduled to make a post-debate appearance on CBS Face the Nation, Priebus abruptly pulled out after it became clear that the story of the weekend was Trump’s diatribe against Fox News anchor Megyn Kelly.)
At first, the only candidates willing to confront Trump in a concerted fashion were those who did so out of a desperate need to remain relevant – the class of Trump antagonists largely consisted of the candidates struggling to make it into the Aug. 6 primetime debate. Since then, though, as rival campaigns became more convinced that Trump’s candidacy was more than a passing comet and destined to last through the early-voting states, more candidates have shown a willingness to criticize him.
In recent days, Jeb Bush has tangled frequently with Trump, responding to the businessman’s harsh attacks on him.
Other elements of the Republican Party have reckoned with Trump’s candidacy through ballot access requirements also designed to force Trump to play by party rules. GOP leaders in Virginia and North Carolina discussed implementing a new requirement for candidates to qualify for their primary ballots: that they pledge to support the Republican presidential nominee — and not run as a third-party candidate — in the general election.
Last week, the South Carolina Republican Party announced that candidates who want to qualify for the state’s primary ballot must sign a loyalty oath by Sept. 30. Candidates were asked to state that they “generally believe in and intend to support the nominees and platform of the Republican Party in the November 8, 2016 general election.”
Trump has said that he is still weighing whether to agree to the South Carolina pledge.
Story 1: Billionaires For Bush and Clinton — American People For Anyone Else — Nurse Ratchet Is Back — Money Cannot Buy You Love — It’s My Turn — Videos
Be it or be it not true that Man is shapen in iniquity and conceived in sin, it is unquestionably true that Government is begotten of aggression, and by aggression.
~Herbert Spencer, 1850
This is the gravest danger that today threatens civilization: State intervention, the absorption of all spontaneous social effort by the State; that is to say, of spontaneous historical action, which in the long-run sustains, nourishes and impels human destinies.
~Jose Ortega y Gasset, 1922
It [the State] has taken on a vast mass of new duties and responsibilities; it has spread out its powers until they penetrate to every act of the citizen, however secret; it has begun to throw around its operations the high dignity and impeccability of a State religion; its agents become a separate and superior caste, with authority to bind and loose, and their thumbs in every pot. But it still remains, as it was in the beginning, the common enemy of all well-disposed, industrious and decent men.
For more than 70 years, with few exceptions, more Americans have identified as Democrats than Republicans. But the share of independents, which surpassed the percentages of either Democrats or Republicans several years ago, continues to increase. Currently, 39% Americans identify as independents, 32% as Democrats and 23% as Republicans. This is the highest percentage of independents in more than 75 years of public opinion polling. Report:A Deep Dive Into Party Affiliation
Note: 1939-1989 yearly averages from the Gallup Organization interactive website. 1990-2014 yearly totals from Pew Research Center aggregate files. Based on the general public. Data unavailable for 1941. Independent data unavailable for 1951-1956.
One Flew Over The Cuckoo’s Nest – Randal back in action scene
i want my cigarettes
The Beatles – Can’t Buy Me Love (Live)
Hillary Clinton Announces Her Bid For President. Again.
This Aug. 24, 2012 photo provided by FDR Four Freedoms Park LLC, shows the New York City memorial park, honoring President Franklin D. Roosevelt, that has been completed 40 years after the original design was created. The Franklin D. Roosevelt Four Freedoms Park on the southern tip of 2-mile-long Roosevelt Island – between Manhattan and Queens – is being dedicated Wednesday, Oct. 17, 2012, in a ceremony to be attended by dignitaries including former President Bill Clinton and Mayor Michael Bloomberg. (AP Photo/FDR Four Freedoms Park LLC, Paul Warchol)
Clinton touts shared prosperity in campaign kick-off speech
Hillary Clinton’s 2016 Candidacy Announcement Expected on Sunday
Malzberg | Raffi Williams discusses Hillary Clinton’s Saturday “Re-Launch” of her Campaign
Hillary Clinton Launches Presidential Campaign In Nyc FULL SPEECH
Hillary the Scandals
Exposed: Hillary Clinton’s Sex Scandals
THE CLINTON CONSPIRACY – MUST WATCH
Google “Bill Clinton rape”
The Alex Jones Show (1st HOUR-VIDEO Commercial Free) Sunday June 14 2015: News
CNN Poll Shows Hillary Clinton “Shine Has Tarnished” And She Is Losing Support Of Independents
FNC: Hillary Clinton’s Favorability Down 11 Among Independents
Jeb LET’S-JUST-LEAVE-LAST-NAMES-OUT-OF-THIS Bush 2016 Presidential Campaign Announcement
Immigration Protesters Disrupt Jeb Bush Campaign Announcement – June 15, 2015
Conservative Heads Explode Over Jeb Bush Immigration Comments
Mark Levin comments on Jeb Bush’s statements about legal and illegal immigration
PJTV: No Jeb Bush and No Third Parties
Glenn Beck – “Jeb Bush is Hillary Clinton LITE”
Immigration by the Numbers — Off the Charts
America’s Immigration History
Top 10 Immigrant Countries
Immigration, World Poverty and Gumballs – Updated 2010
How Many Illegal Aliens Are in the US? – Walsh – 1
How Many Illegal Aliens Are in the United States? Presentation by James H. Walsh, Associate General Counsel of the former INS – part 1.
Census Bureau estimates of the number of illegals in the U.S. are suspect and may represent significant undercounts. The studies presented by these authors show that the numbers of illegal aliens in the U.S. could range from 20 to 38 million.
On October 3, 2007, a press conference and panel discussion was hosted by Californians for Population Stabilization (http://www.CAPSweb.org) and The Social Contract (http://www.TheSocialContract.com) to discuss alternative methodologies for estimating the true numbers of illegal aliens residing in the United States.
This is a presentation of five panelists presenting at the National Press Club, Washington, D.C. on October 3, 2007. The presentations are broken into a series of video segments:
How Many Illegal Aliens Are in the US? – Walsh – 2
Jeb Bush Urges ‘Earned Legal Status’ For 11 Million Illegal Aliens
Did Ann Coulter Save USA with funny & brilliant Immigration CPAC Speech?
Laura Ingraham slams Jeb Bush at CPAC
Jeb Bush to officially announce 2016 presidential run
Jeb Bush Finally Announces He Will Run for President
Jeb Bush – Just Another W?
Raw video: Jeb Bush speaks at Politics and Eggs
Diana Ross – Do You Know Where You’re Going To ( Theme From Soundtrack Mahogany )
Diana Ross It’s My Turn
JEB BUSH HAS OPTIMISTIC MESSAGE, FACES CHALLENGES IN ’16 BID
BY STEVE PEOPLES AND BRENDAN FARRINGTON
Jeb Bush is launching a Republican presidential bid months in the making Monday with a vow to get Washington “out of the business of causing problems” and to stay true to his beliefs – easier said than done in a bristling primary contest where his conservative credentials will be sharply challenged.
“I will campaign as I would serve, going everywhere, speaking to everyone, keeping my word, facing the issues without flinching,” Bush said in excerpts of a speech released by his campaign before his afternoon announcement. Bush was opening his campaign at a rally near his south Florida home at Miami Dade College, where the institution’s large and diverse student body symbolizes the nation he seeks to lead.
In an unusual twist for a political speech aimed at a national audience, Bush, who is bilingual, planned to speak partly in Spanish. The former Florida governor has made minority outreach a priority.
“In any language,” his speech said, “my message will be an optimistic one because I am certain that we can make the decades just ahead in America the greatest time ever to be alive in this world.”
In a video for the event, showing women, minorities and a disabled child, Bush says “the most vulnerable in our society should be in the front of the line and not the back.” This calls for “new leadership that takes conservative principles and applies them so that people can rise up.”
Neither his father, former President George H.W. Bush, nor his brother, former President George W. Bush, was expected to attend. The family was to be represented instead by Jeb Bush’s mother and former first lady, Barbara Bush, who once said that the country didn’t need yet another Bush as president, and by his son George P. Bush, recently elected Texas land commissioner.
Before the event, the Bush campaign came out with a new logo – Jeb! – that conspicuously leaves out the Bush surname.
Bush joins the race in progress in some ways in a commanding position. Bush has probably raised a record amount of money to support his candidacy and conceived of a new approach on how to structure his campaign, both aimed at allowing him to make a deep run into the GOP primaries.
But on other measures, early public opinion polls among them, he has yet to break out. While unquestionably one of the top-tier candidates in the GOP race, he is also only one of several in a large and capable Republican field that does not have a true front-runner.
In the past six months, Bush has made clear he will remain committed to his core beliefs in the campaign to come – even if his positions on immigration and education standards are deeply unpopular among the conservative base of the party that plays an outsized role in the GOP primaries.
Tea party leader Mark Meckler on Monday said Bush’s positions on education and immigration are “a nonstarter with many conservatives.”
“There are two political dynasties eyeing 2016,” said Meckler, a co-founder of the Tea Party Patriots, one of the movement’s largest organizations, and now leader of Citizens for Self-Governance. “And before conservatives try to beat Hillary, they first need to beat Bush.”
Yet a defiant Bush has showed little willingness to placate his party’s right wing.
“I’m not going to change who I am,” Bush said as he wrapped up a European trip on the weekend. “I respect people who may not agree with me, but I’m not going to change my views because today someone has a view that’s different.”
Bush is one of 11 major Republicans in the hunt for the nomination. Wisconsin Gov. Scott Walker and Ohio Gov. John Kasich are among those still deciding whether to join a field that could end up just shy of 20.
After touring four early-voting states, Bush quickly launches a private fundraising tour with stops in at least 11 cities before the end of the month. Two events alone – a reception at Union Station in Washington on Friday and a breakfast the following week on Seventh Avenue in New York – will account for almost $2 million in new campaign cash, according to invitations that list more than 75 already committed donors.
Jeb Bush Announces GOP Presidential Campaign
Enters crowded Republican field with the party faithful divided over the GOP’s direction
By BYRON TAU
Former Florida Gov. Jeb Bush announced his candidacy for the Republican presidential nomination on Monday, flipping the switch on an expansive campaign operation he has quietly been building for months.
Former Florida Governor Jeb Bush formally announces his campaign for the 2016 Republican presidential nomination on Monday, June 15, 2015 in Miami.PHOTO:REUTERS
“Here’s what it comes down to. Our country is on a very bad course. And the question is: What are we going to do about it? The question for me is: What am I going to do about it?” he said. “And I have decided. I am a candidate for president of the United States.”
Mr. Bush, who becomes the third member of his family to seek the nation’s highest office, spoke while delivering his official campaign speech at Miami-Dade College.
Earlier, he officially kicked off his candidacy by filing paperwork to run for president with the Federal Election Commission.
The son and brother of two U.S. presidents, Mr. Bush enters a presidential field crowded with young up-and-coming Republican talent and an electorate deeply divided about the future direction of both the Republican Party and the nation.
In laying out the case for his candidacy, Mr. Bush promised an uplifting message about the direction and future of the country.
“In any language, my message will be an optimistic one because I am certain that we can make the decades just ahead in America the greatest time ever to be alive in this world,” Mr. Bush said.
And the former Florida governor boasted about job and economic growth and tax cuts in the state over his tenure.
Jeb Bush is not that far off politically from brother George W., but the two have very different personalities and backgrounds. Photo: AP
Though Mr. Bush has built a sizable campaign war chest and attracted veteran operatives for both his campaign and his independent super PAC—polls show him barely registering above 10% in a crowded primary field.
He’ll also face a Republican primary electorate that has grown more conservative since his brother George W. Bush ran for election in 2000 on a platform of what he called compassionate conservatism.
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On two issues in particular—immigration andeducation—Mr. Bush finds himself on the opposite side from many grassroots activists in the Republican Party. Mr. Bush has long supported changes to the nation’s immigration system that would allow illegal immigrants a path to legal status. He also has expressed support for national education standards opposed by many conservative activists.
Mr. Bush also faces the challenge of distancing himself in the voters’ eyes from his family name and legacy. His brother, George W. Bush, left office with sagging approval ratings due in part to his role as the architect of a divisive and unpopular war in Iraq.
Jeb Bush has spent months planning his entrance into the 2016 presidential campaign and he will enter with the most name recognition and money of his GOP field. WSJ’s Jerry Seib explains. Photo: AP
Mr. Bush unveiled a campaign logo on Monday that downplays his family’s last name. The stylized red logo contains only Mr. Bush’s first name with an exclamation point. His father, George H.W. Bush, and brother, George W. Bush, aren’t expected to attend his campaign kickoff.
Mr. Bush has been traveling the country in the past few months banking campaign cash for an independent group that is expected to support his efforts. With his deep ties to the Republican donor class and the business community, Mr. Bush has built a formidable operation and a major war chest.
Once he becomes an official candidate, he won’t be able to coordinate with the super PAC, which will be run out of Los Angeles. Mr. Bush’s official campaign is based in Florida.
Jeb Bush: I cry, I’m introverted, but I want to be president
Third member of the Bush dynasty finally to announce candidacy for Republican nomination
Jeb Bush, former Florida governor, in Tallinn, Estonia, on SaturdayPhoto: Bloomberg
By Joanna Walters, New York and Raf Sanchez, Miami
Jeb Bush will finally end months of speculation and announce he is running for the American presidency on Monday, in a campaign carefully calibrated to portray himself as a natural heir to the family dynasty and at the same time distance himself from his brother George W.
In a key-note interview, he described his father, the first President George Bush, as the “greatest man alive” and said the mere thought of him might make him cry.
But by contrast he was careful to differentiate himself from his brother. “Jeb is different from George,” he told CNN. “Jeb is who he is and his life story is different.”
Mr Bush plans to announce he is running for the White House in Miami on Monday, after months of unofficial campaigning.
He unveiled his campaign logo via social media site Twitter on Sunday, and immediately ran into teasing from the public that it is almost identical to the logo he used when he ran, successfully, for the governorship of Florida in 1998.
The logo is simply his first name in bright red with an exclamation mark and 2016 underneath. His governor’s campaign logo was also ‘Jeb!’
“It’s something that’s been lacking in the presidency, to have someone who’s been tempered by life, and along the way I will get to share that,” said Mr Bush, who at 62 is eighteen years older than Mr Rubio and eight years older even than the departing president.
Polls show the two men, along with Governor Scott Walker of Wisconsin, as the current front-runners for the Republican nomination.
Mr Bush will make his campaign announcement in his hometown of Miami and will be joined by his wife Columba, a Mexican-born woman who has largely shied away from the public spotlight.
The story of how they met as teenagers featured prominently in a video Mr Bush released shortly before the announcement.
“I need to share my heart to show a little bit about my life experience,” Mr Bush said in the video.
While it has been clear for months that Mr Bush intended to run he has used the time ahead of his formal announcement to raise funds for a superPAC, a nominally independent group that will support his candidacy.
Mr Bush is said to have already amassed a campaign war chest of more than $100 million, according to the website Politico.
But he is among the most moderate of the Republican contenders when it comes to domestic policy. Unlike others in his party he has not lashed out at national education standards and has taken a more measured tone on immigration.
Mr Bush, who speaks fluent Spanish, may be able to attract the votes of Hispanic voters who are an increasingly crucial voting group in US elections.
However, the conservative activists who play a major role in determining the Republican nominee may pressure Mr Bush to take a harsher line on immigration.
He has already backed away from his previous support for a “path to citizenship” for illegal immigrants who have lived and worked in the US for a long time. Mrs Clinton supports such a path, as does President Barack Obama.
Mr Bush has denied he was trying to cut himself off from his famous name, but admitted he had a difficult task to show the man beneath the family.
“I don’t have to dissociate myself from my family, you know, I love them but I know that for me to be successful I’m going to have to share my heart, tell my story,” he added.
“It’s important. It’s something that took a little bit of getting used to for me, personally, to be able to show my heart, because I’m kind of introverted, but it’s important to do,” he said.
He was asked about his father, who turned 91 on June 12 and whether he would be on his mind when he announces his own candidacy to follow in the family footsteps.
“I’m not going to think about that because Bushes are known to cry once in a while. It’s very emotional for me,” he said. “I love my dad. He’s just the greatest man alive,” he said.
Mr Bush said he was looking forward to telling a life story that was “full of warts and full of successes”, where he had had to make “tough decisions”.Most startling is that it completely leaves out the famous family name that has given him a head start in the 2016 presidential race.
Clinton formally launches 2016 campaign with focus on economic equality
Hillary Clinton on Saturday officially launched her 2016 presidential campaign, calling for a return to shared prosperity and asking American workers, students and others to trust her to fight for them.
Clinton made the announcement at an outdoor rally on New York City’s Roosevelt Island, two months after announcing her campaign with an online video.
“You have to wonder: When do I get ahead? I say now,” Clinton told the crowd in a roughly 46-minute speech. “You brought the country back. Now it’s your time to enjoy the prosperity. That is why I’m running for president of the United States.”
The former first lady, U.S. senator from New York and secretary of state is the Democratic frontrunner in the 2016 White House race.
Also in the race are Sen. Bernie Sanders, of Vermont, former Maryland Gov. Martin O’Malley and former Rhode Island Gov. Lincoln Chaffe.
She lost her 2008 bid for the Democratic presidential nomination to then-Sen. Obama.
Clinton, wearing her signature blue pantsuit, walked through the crowd en route to the stage for her speech.
She remarked that Franklin D. Roosevelt’s Four Freedoms are a “testament to our nation’s unmatched aspirations and a reminder of our unfinished work at home and abroad.”
Clinton also drew into focus what will likely be the key themes of her campaign including support for same-sex marriage, wage equality for women and all Americans, affordable college tuition and free child-care and pre-kindergarten.
“The top-25 hedge fund managers make more than all kindergarten teachers combined,” she said. “And they’re paying lower taxes.”
Clinton attempted to portray herself as a fierce advocate for those left behind in the post-recession economy, detailing a lifetime of work on behalf of struggling families. She said her mother’s difficult childhood inspired what she considers a calling.
“I have been called many things by many people,” Clinton said.” Quitter is not one of them.”
She said that attribute came from her late mother, Dorothy Rodham, in whom she would confide after hard days in the Senate and at the State Department.
“I wish my mother could have been with us longer,” Clinton said. “I wish she could have seen the America we are going to build together … where we don’t leave any one out or any one behind.”
Clinton was joined by her husband, former President Bill Clinton, and their daughter, Chelsea.
She also was critical in her speech of Republicans, suggesting they have reserved economic prosperity for the wealthy, in large part by cutting taxes for the country’s highest wage-earners.
She also accused them of trying to “wipe out tough rules on Wall Street,” take away health insurance from more than 16 million Americans without offering any “credible alternative” and turning their backs on “gay people who love each other.”
The Republican National Committee said in response that Clinton’s campaign was full of hypocritical attacks, partisan rhetoric and ideas from the past.
“Next year, Americans will reject the failed policies of the past and elect a Republican president,” RNC Press Secretary Allison Moore said.
Republicans also argued Clinton devoted only about five minutes of her speech to foreign policy.
Clinton now heads to four early-primary states, starting Saturday night in Iowa where she will talk with volunteers and others about grassroots-campaign efforts for the first-in-the-nation caucus state.
The organizational meeting will be simulcast to Clinton camps across the country and serve as a blueprint for them all 435 congressional districts.
She then travels to New Hampshire on June 15, South Carolina on June 17 and in Nevada on June 18.
Clinton vowed Saturday to roll out specific policy proposals in the coming weeks, including ones on rewriting the tax code and sustainable energy.
In what was her first major speech of her campaign, she also cited President Obama, Roosevelt and her husband, saying they embraced the idea that “real and lasting prosperity must be built by all and shared by all.”
Holding the event on an island between Queens and Manhattan raised some criticism about its accessibility by vehicle and public transportation.
The campaign estimated the event crowd, whose members needed a ticket, at 5,500. However, the number appeared smaller, and the overflow section was empty.
Hillary Rodham Clinton, in a speech that was at times sweeping and at times policy laden, delivered on Saturday a pointed repudiation of Republican economic policies and a populist promise to reverse the gaping gulf between the rich and poor at her biggest campaign event to date.
Under sunny skies and surrounded by flag-waving supporters on Roosevelt Island in New York, Mrs. Clinton pledged to run an inclusive campaign and to create a more inclusive economy, saying that even the new voices in the Republican Party continued to push “the top-down economic policies that failed us before.”
“These Republicans trip over themselves promising lower taxes for the wealthy and fewer rules for the biggest corporations without any regard on how that will make income inequality worse,” she said before a crowd estimated at 5,500, according to the campaign.
“I’m not running for some Americans, but for all Americans,” Mrs. Clinton said. “I’m running for all Americans.”
Offering her case for the presidency, she rested heavily on her biography. Her candidacy, she said, was in the name of “everyone who has ever been knocked down but refused to be knocked out.”
Mrs. Clinton portrayed herself as a fighter, sounding a theme her campaign had emphasized in recent days. “I’ve been called many things by many people, quitter is not one of them,” she said.
Standing on a platform set in the middle of a grassy memorial to Franklin D. Roosevelt on the East River island named after him, Mrs. Clinton invoked his legacy. She also praised President Obama and her husband, former President Bill Clinton, but declared that “we face new challenges” in the aftermath of the economic crisis.
While some Republican detractors have tried to make an issue of Mrs. Clinton’s age (if she won she would be 69 when she took office in January 2017), she sought to embrace it and to rebut the notion that she cannot stand for change or modernity. Offering her campaign contact information, she spoke about the lives of gay people, saying Republicans “turn their backs on gay people who love each other.”
In one of the biggest applause lines, she said: “I may not be the youngest candidate in this race, but I will be the youngest woman president in the history of the United States.”
Underscoring the point with a riff on an old Beatles song, Mrs. Clinton said: “There may be some new voices in the presidential Republican choir. But they’re all singing the same old song.”
“It’s a song called ‘Yesterday,’ ” she continued. “They believe in yesterday.”
Allison Moore, a spokeswoman for the Republican National Committee, called the speech “chock-full of hypocritical attacks, partisan rhetoric and ideas from the past that led to a sluggish economy.”
Who Is Running for President (and Who’s Not)?
Mrs. Clinton specified policies she would push for, including universal prekindergarten, paid family leave, equal pay for women, college affordability and incentives for companies that provide profit-sharing to employees. She also spoke of rewriting the tax code “so it rewards hard work at home” rather than corporations “stashing profits overseas.” She did not detail how she would achieve those policies or address their costs.
Mrs. Clinton spoke to the criticism that her wealth makes her out of touch with middle-class Americans, saying her candidacy is for “factory workers and food servers who stand on their feet all day, for the nurses who work the night shift, for the truckers who drive for hours.”
Uncomfortable with the fiery rhetoric of Senator Elizabeth Warren, the Massachusetts Democrat, Mrs. Clinton offered some stark statistics to address the concerns of the Democratic Party’s restless left. “The top 25 hedge fund managers make more than all of America’s kindergarten teachers combined, often paying a lower tax rate,” she said.
Mrs. Clinton said many Americans must be asking, “When does my family get ahead?” She added: “When? I say now.”
In a campaign in which Republicans have emphasized the growing threat of Islamic terrorism and an unstable Middle East, Mrs. Clinton hardly mentioned foreign policy. She did speak of her experience as a senator from New York after the Sept. 11, 2001, attacks.
“As your president, I’ll do whatever it takes to keep Americans safe,” she said, weaving the skyline and a view of the newly built One World Trade Center into her remarks.
For as much as the content of the speech mattered, the theater of it was equally important. For a campaign criticized for lacking passion, the event gave Mrs. Clinton the ability to create a camera-ready tableau of excitement.
The Brooklyn Express Drumline revved up the crowd assembled on a narrow stretch at the southern tip of the island. And Marlon Marshall, the campaign’s director of political engagement, rattled off statistics about the number of volunteers who have signed up and house parties held in the early nominating states. A section with giant screens set up for an overflow crowd stood nearly empty.
But a crowd of supporters and volunteers from the staunchly Democratic New York area does not exactly represent the electorate writ large. The real test for Mrs. Clinton and how the speech was perceived will be in Iowa, where she was to travel on Saturday evening for several events. Iowa, the first nominating state, shunned her the last time she sought the presidency, in 2008.
“I was disappointed she didn’t challenge Obama four years ago,” said Dominique Pettinato, a 24-year-old parole officer who lives in Brooklyn.
For some members of the skeptical liberal wing of the Democratic Party still concerned that Mrs. Clinton will embrace her husband’s centrist approach, the speech went only so far in convincing them otherwise.
“This was mostly a typical Democratic speech — much better than the direction Republicans offer America,” said Adam Green, a co-founder of Progressive Change Campaign Committee, a liberal advocacy group. But he said the speech had not offered “the bold economic vision that most Americans want and need.”
Mrs. Clinton did not broach one issue that liberals are increasingly frustrated by: trade. On Thursday, Senator Bernie Sanders, a socialist from Vermont who is also seeking the Democratic nomination, pointedly criticized Mrs. Clinton for not taking a position on a controversial trade bill Mr. Obama is pushing, as well as other contentious issues like the proposedKeystone XL oil pipeline and the renewal of the Patriot Act. “What is the secretary’s point of view on that?” Mr. Sanders asked of the act, which he voted against.
Mrs. Clinton had hardly stopped speaking Saturday when Bill Hyers, a senior strategist for Martin O’Malley, the former governor of Maryland, who is also seeking the Democratic presidential nomination, criticized her as vague on trade and other issues. Mr. O’Malley, he said, “has been fearless and specific in the progressive agenda we need.”
If there is one demographic Mrs. Clinton’s campaign is hoping to excite it is young women. It is an obvious connection that her 2008 campaign played down as it tried to present the former first lady as a strong commander in chief.
But on Saturday it was clear that Mrs. Clinton will make gender more central to her campaign this time. In her closing remarks, she called for a country “where a father can tell his daughter yes, you can be anything you want to be, even president of the United States.”
Ep. 12: AN ANIMATED FILM ON THE DEBT & THE DEFICIT | Marshall Curry
US Debt Crisis – Perfectly Explained
The Collapse of The American Dream Explained in Animation
George Carlin on the American Dream
The bar chart comes directly from the Monthly Treasury Statement published by the U. S. Treasury Department..The “Debt Total” bar chart is generated from the Treasury Department’s “Debt Report” found on the Treasury Direct web site. It has links to search the debt for any given date range, and access to debt interest information. It is a direct source to government provided budget information.
— “Deficit” vs. “Debt”—Suppose you spend more money this month than your income. This situation is called a “budget deficit”. So you borrow (ie; use your credit card). The amount you borrowed (and now owe) is called your debt. You have to pay interest on your debt. If next month you spend more than your income, another deficit, you must borrow some more, and you’ll still have to pay the interest on your debt (now larger). If you have a deficit every month, you keep borrowing and your debt grows. Soon the interest payment on your loan is bigger than any other item in your budget. Eventually, all you can do is pay the interest payment, and you don’t have any money left over for anything else. This situation is known as bankruptcy.
“Reducing the deficit” is a meaningless soundbite. If theDEFICIT is any amount more than ZERO, we have to borrow more and the DEBT grows.
Each year since 1969, Congress has spent more money than its income. The Treasury Department has to borrow money to meet Congress’s appropriations. Here is a direct link to the Congressional Budget Office web site’s deficit analysis. We have to pay interest* on that huge, growing debt; and it dramatically cuts into our budget.
Sen Rand Paul on Baseline Budgeting
Ending Baseline Budgeting | House GOP Twitter Response
2014 U.S. Federal Budget: Taxes & Revenue
2014 U.S. Federal Budget: Budget Process
2014 U.S. Federal Budget: Social Insurance, Earned Benefits, & Entitlements
2014 U.S. Federal Budget: Debt and Deficit
US Congress has raised the debt ceiling 78 times since 1960
Rep. Louie Gohmert Applauds The Baseline Reform Act
Baseline Budgeting Explained
Underwhelming Spending Cuts from Congress and Obama
Understanding the National Debt and Budget Deficit
FairTax: Fire Up Our Economic Engine (Official HD)
The FairTax: It’s Time
Flat Tax vs. National Sales Tax
Dan Mitchell Discussing Federal Tax Burden on CNBC
Eight Reasons Why Big Government Hurts Economic Growth
Dan Mitchell Explaining How Government Screws Up Everything
What is the FairTax legislation?
Cato Institute Senior Fellow Daniel J. Mitchell
How does the FairTax rate compare to today’s?
What assumptions does the FairTax make about government spending?
How does the FairTax rate compare to today’s?
Is the FairTax truly progressive?
How does the “prebate” work?
Will the prebate create a massive new entitlement system?
Wouldn’t it be more fair to exempt food and medicine from the FairTax?
Is it fair for rich people to get the same prebate as poor people?
If people bring home their whole paychecks how can prices fall?
How does the FairTax impact the middle class?
Why is the FairTax better than a flat income tax?
Is the FairTax rate really 23%?
Is consumption a reliable source of revenue?
How does the FairTax affect compliance costs?
Isn’t it a stretch to say the IRS will go away?
Can I pretend to be a business to avoid the sales tax?
How does the FairTax affect tax preparers and CPAs?
Are any significant economies funded by a sales tax?
How will the FairTax affect state sales tax systems?
Can’t Americans just cross the border to avoid the FairTax
How will Social Security payments be calculated under the FairTax?
Will the FairTax impact tax deferred retirement accounts like 401(k)s?
How will the FairTax® make the tax system fair for everyone?
What’s the difference between the FairTax® and the income tax?
How will the FairTax® help me save money?
Why Should Grandparents support FairTax®?
Congressman Woodall Discusses the FairTax
“The Case for the Fair Tax”
Freedom from the IRS! – FairTax Explained in Detail
John Stossel speaks to the Fair Tax Rally
Sen. Moran Discusses FairTax Legislation on U.S. Senate Floor
Mind blowing speech by Robert Welch in 1958
Robert Welch Speaks: In One Generation (1974)
GOP Taxonomy: The Flat Taxers and the Fair Taxers
by Aman Batheja
During his last run for president, Rick Perry often pulled a postcard out of his jacket pocket. “The best representation of my plan is this postcard, which taxpayers will be able to fill out to file their taxes,” Perry said. While Perry proposed an optional 20 percent flat tax on all income levels, the other Texan running that cycle, Ron Paul, wanted to get rid of the income tax altogether. The former Surfside congressman sometimes suggested replacing it and other federal taxes with a sales tax, a concept often described as the Fair Tax. As the 2016 landscape begins taking shape, potential Republican candidates are suggesting an interest in being both flat and fair, embracing some version of Perry’s 2012 proposal as the first step toward reaching Paul’s ideal. Take U.S. Sen. Ted Cruz, R-Texas, whose talk on taxes has sounded strikingly similar to Perry’s at times. “We should let taxes become so simple that they could be filled out on a postcard,” Cruz wrote in a column for USA Today in October. Yet while Cruz has called for converting the country’s progressive income tax system to a flat tax, his office confirmed that the Fair Tax is his long-term goal. “The senator supports a Fair Tax, ultimately,” spokeswoman Catherine Frazier said. “However, the most immediate, effective way to implement comprehensive tax reform is to pass a simple flat tax — so simple that Americans can file on a postcard. This should be the starting point for reform, and once it’s in place we should pursue a Fair Tax.” Another presidential contender, U.S. Sen. Rand Paul, R-Ky., has also voiced support for a flat tax, but still prefers the vision of his libertarian father, Ron Paul. “I’ve never said I don’t support a sales tax,” Rand Paul told The Texas Tribune recently while in Dallas. He explained that he viewed moving the federal tax system to a flat tax as “an easier concept to get through a legislature because you’re modifying the existing code.” More broadly, Rand Paul said he was interested in stimulating economic growth by reducing the federal taxes overall. “We’ve kind of lost that argument in recent years because many Republicans, including many in Washington, now simply argue for revenue neutral tax reform, which stimulates nothing,” Paul said. For former Arkansas Gov. Mike Huckabee, those talking about the flat tax as a bridge to the Fair Tax are missing the point. “Gov. Huckabee has said many times the Fair Tax is a flat tax, but it’s based on consumption rather than on punishing our productivity,” spokeswoman Alice Stewart said. Another potential presidential contender, former Florida Gov. Jeb Bush, delivered a speech on taxes and income inequality this week in Detroit that reportedly included support for simplifying the tax code, but did not include specific policy proposals. Critics of both flat tax and Fair Tax proposals dismiss them as regressive plans that would amount to tax cuts for higher-income households while increasing the tax burden on middle-class households. But conservatives argue that dramatically simplifying the tax code, or moving to a tax system focused more on consumption than earnings, would be more transparent, simpler and better for the economy in the long run. Cal Jillson, a political science professor at Southern Methodist University, said discussion of flat taxes and consumption taxes works well politically with Republican voters, but described them as “pie-in-the-sky, no-way-in-hell” proposals that won’t ever muster enough support in Congress. “When you talk about tax reform in an environment that is politically polarized as ours, it’s hard to see how you get majority support, let alone a bipartisan package that could be taken to the public by both parties,” Jillson said. “It’s a way of saying, ‘I have no sense of doing anything practical.’ ” While Cruz and Rand Paul have already signaled their positions, Perry, who has been meeting with dozens of policy experts to prepare for a second White House run, may end up tweaking his earlier flat tax plan. “He supports simplifying the tax code, lowering rates for working families, and closing loopholes,” spokeswoman Lucy Nashed said. “Gov. Perry is continuing to work on policy proposals and will announce specific ideas at the appropriate time.” http://www.texastribune.org/2015/02/08/flat-tax-fair-tax/
National Review: The FairTax Makes a Comeback
by: Ryan Lovelace
Republican senator David Perdue of Georgia sounds an awful lot like President Obama when he describes his plan to overhaul the tax code, which would repeal federal taxes and replace them with a consumption tax known as the “FairTax.” “[The FairTax] really levels the playing field in that regardless of who you are, where you are, you’ll pay your fair share, and it will be the same amount,” Perdue tells NRO. “It will be equitable.” Perdue couches his description of the FairTax in rhetorical terms — “levels the playing field,” “pay your fair share,” “equitable” — that could’ve come straight out of Obama’s State of the Union address, and that’s no accident. Whatever the political prospects of the proposal — it has failed over and over again when proposed in the past, and it is expected to meet a similar fate this time around — it could allow the GOP to seize the mantle of economic populism from the Democrats, and, in so doing, to “win” tax reform in the eyes of voters. That’s important, because tax-reform legislation is one of the few big, ostensibly bipartisan efforts the new Congress is expected to undertake, and the scramble to take credit for it ahead of the 2016 presidential election will be fierce. The FairTax legislation put forward in the Senate by Perdue, his fellow Georgia Republican Johnny Isakson, and their colleague Jerry Moran (R., Kan.), was written with 2016 in mind. Perdue says that on Tuesday, before listening to Obama announce his desire to raise taxes once again, he and Isakson discussed the importance of their work in influencing the debate on tax reform. Perdue — the successful manager known for his ability to turn around businesses and revive brands – says he hopes to help move 2016 GOP presidential candidates in the direction of the FairTax. The proposal itself is relatively simple: It would eliminate all federal income, payroll, gift, and estate taxes, and replace them with a 23 percent national sales tax. In addition to making the U.S. economy more competitive on a global scale and putting people back to work, the plan would strip the IRS of its ability to interfere in the lives of ordinary Americans, according to the conservative freshman from Georgia. Other longtime proponents of the idea agree, and argue that by replacing a system that taxes an individual’s earnings with one that exclusively taxes that same individual’s spending, it would allow each citizen the freedom to determine his own tax burden. Perdue’s hopes for 2016 notwithstanding, the FairTax has not been a winning issue in past Republican presidential primaries. A number of GOP primary candidates, from Mike Huckabee in 2008 to Herman Cain in 2012, have failed to win the nomination while championing the proposal. And it will still be a loser come 2016, says Ryan Ellis, the tax-policy director at Grover Norquist’s Americans for Tax Reform. “If this thing [the FairTax] was going to catch on as the next great hot thing, it would have,” Ellis says. “It’s not a practical tax-reform plan for governing, it’s something that people wish, aspirationally, they could put out there.” The tax-reform proposals with the best chance of succeeding in Congress — and helping Republican candidates win in 2016 — are those that move incrementally toward the FairTax’s goals without overhauling the system in one fell swoop, Ellis says. Such proposals would likely combine some of the FairTax’s reforms — such as repealing the death tax and capital-gains taxes — with measures aimed at broadening the tax base of higher-income individuals. The winning formula to achieve fundamental tax reform, according to Ellis, is a plan that is pro-growth, pro-family, and “paid for by, as much as you can, rich guys.” But those who warn that the FairTax lacks political viability only give more motivation to Rob Woodall (R., Ga.), the lead sponsor of FairTax legislation in the House of Representatives. “That’s what I love about this bill: Washington hates this bill,” Woodall says. “There are all sorts of forces in town that discourage this kind of giant reform, but it’s being marketed at a grassroots level.” Woodall’s Georgia district has a history of electing FairTax proponents to Congress. Woodall’s seat was previously occupied by John Linder, a tireless champion who first introduced the FairTax bill in 1999, and reintroduced it in each new Congress until he retired in 2011. He never succeeded in changing the law, but he did quite a bit to build support in his home state. As Americans for Fair Taxation president Steve Hayes tells it, Atlanta-based radio talk-show host Neal Boortz is largely responsible for getting the idea off the ground. Boortz wrote The FairTax Book with Linder and trumpeted his support for the reform to a southeastern audience who readily took to the idea. Hayes’s organization works to garner more support for the idea across the United States. The “power base” of the FairTax proposal has moved out of the Southeast and into the Midwest, Woodall says. Moran’s support as a lead co-sponsor has helped the idea gain traction in Kansas. A top Moran aide who worked on the FairTax bill tells NRO that Moran began laying the groundwork to lead on this issue last year, as former Georgia senator Saxby Chambliss was preparing to retire. Chambliss was a staunch supporter of the FairTax, and the aide says the two offices worked behind the scenes to ensure that the push for tax reform would live on. Woodall thinks the geographical shift in support will help the idea flourish in California and the Northwest. Moreover, he wants to gather supporters in key 2016 Republican-primary states and grow grassroots support in order to influence the GOP’s agenda. But the effort to sell the FairTax primarily to devoted conservatives has left others in the dark as to its possible benefits. Laurence Kotlikoff, an economics professor at Boston University, has studied the FairTax and thinks it is a more progressive proposal than people realize. Kotlikoff says lawmakers’ lack of experience in public finance has led to a misunderstanding of the FairTax. He adds that he thinks Democratic minority leader Nancy Pelosi might even come around to the idea, if she realized that it would help some of the people she purports to care about most: workers. After years toiling under former Senate majority leader Harry Reid (D., Nev.), some conservatives have grown excited by the Senate’s movement on this issue. The Moran staffer thinks a total of 10 or 11 senators may ultimately support the proposal, including new members and others who have changed their minds. The number of original co-sponsors of the FairTax in the House has increased during each of the last three Congresses, peaking this year with 57 total supporters. Barring an unforeseen shift in Congress’s priorities, though, the FairTax appears doomed to fail yet again. Woodall knows the effort is ill-fated, and says he won’t look someone in the eye and tell them that a GOP-led Congress will put the FairTax on the president’s desk — or that the president would ever sign it. For the time being, his goal is more modest: He hopes to harness the relatively small but growing support for the proposal, and to take its message to voters across the country, showing his fellow Republicans that populist economic policies can win back the White House in 2016. “This is a mission to change the way people think about the tax code,” he says. “It’s kind of a crazy idea until you look at it and you say, ‘Golly, why haven’t we done that already?’ Because we know that we can’t win Washington until we win the American voter across the country.” – https://fairtax.org/articles/the-fairtax-makes-a-comeback