Wednesday, January 24, 2018

Is This Really An 'Obama Economic Expansion'?

In 2015, Rookie Head Coach Steve Kerr led the Golden State Warriors to
their first NBA Championship in 40 years
(first published in North State Journal, 1/24/18)

Some news media outlets and liberal politicians are claiming that the expanding US economy is 'really due to the wonderful economy and policies President Obama passed on to President Trump!'.


There is only one thing different from an economic standpoint today than before the 2016 election: President Donald Trump is in the White House and President Obama and his preferred successor, Hillary Clinton, are not.

We have the same workers in America now as we did in 2016 before the election. The same level of low interest rates. The same expectations of low inflation amidst international economic competition. The same control of Congress and the Senate.

Yet we now have economic growth projections of up to 4% per year whereas CBO projected 1.9% GDP growth rates for years to come in their 2016 update before the election.

What happened?

President Trump came in and changed economic perceptions and expectations of the US business community right away. He is a businessman; President Obama was not.

He talks about the bright potential of the US economy whereas President Obama only saw the negative side of American businesses. As a result, American businesses and workers have responded to this new freedom from over-regulation and over-taxation in a very positive manner.

Think leadership and freedom don’t make a huge difference?

Consider what happened in San Francisco with the Golden State Warriors. In 2014, Steph Curry was in his 5th year and Klay Thompson was in his 3rd season. They had turned things around modestly from a disastrous string of seasons previously but were not really going anywhere under Coach Mark Jackson who was described as being temperamental, mercurial and ‘heavy-handed’ at times.

The Warriors fired Mark Jackson and brought in Steve Kerr to coach the same players in the same city and in the same stadium with a more up-tempo, free-flowing and from all outside observations, a more fun way of playing basketball at any level.

In 2015, the Warriors won their first NBA title in 40 years. Great talent was unleashed and given the freedom to do what they knew how to do: shoot the ball from everywhere and run the other team ragged.

President Obama's economic policies were 'heavy-handed' as well and government-first centric. Businessmen complained about his use of the heavy coercive hand of the federal government to 'solve' any problem at hand. The over-regulation of Dodd-Frank legislation frustrated financial lending institutions and his $1 trillion in a 'shovel-ready' infrastructure stimulus package didn't stimulate much of anything but more national debt.

And the ACA. If there ever was a poster child for government over-reach, it was Obamacare.

Had any of President Obama’s economic policies worked, we would have seen explosive GDP growth in 2011, 2012, 2013, 2014, 2015 or 2016 up to Election Day, 2016. 8 years of a presidential term is a long time to see if policies work or not.

Nobel Prize winner Paul Krugman said on election night, 2016: 'If the question is when will markets recover (from the Trump election), the answer is NEVER!'

‘DEWEY DEFEATS TRUMAN!’ comes to mind immediately.

Due to the recently-passed tax cuts, 125 million households will start to see up to $200/month more in their paychecks starting in February.

3 million+ employees and counting will receive $1000 bonuses or more from their employers who are passing along the benefits of the lower corporate tax cuts to them this year.

Apple is bringing back $350 billion of profits from overseas to invest in 20,000 new jobs here in America on top of paying $38 billion in corporate taxes from repatriated profits that alone will reduce the federal budget deficit by close to 10% all by itself this year.

We can only hope that this freedom and economic good news continues as long as the Warriors continue winning NBA Championships. It might be awhile.

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Wednesday, January 17, 2018

Ending The Sisyphean Task of Recruiting Car Companies To North Carolina

Senator Lee Overman-NC
1910-1931, Chairman
Senate Appropriations
Committee. Served around
the time there was a
passenger pigeon still alive.
(first published in North State Journal, 1/17/18)

Want to get a major car manufacturing plant to come to North Carolina?

Vote for a US Senator who will get on the Senate Defense Appropriations Subcommittee first. Then a car manufacturing plant may follow sometime in the future.

North Carolina has spent a lot of time, money and effort to get an automobile company to come to North Carolina over the past 25 years with nothing to show for it yet.

North Carolina just lost out to Alabama for the Toyota Mazda plant after losing to South Carolina for the crucial BMW plant long ago and then to Alabama for a Mercedes-Benz operation soon after. Volvo and Volkswagen deals have come and gone to other states along with others over the years.

We might as well save our taxpayer money, time and effort for other projects that have a higher chance of actually coming to North Carolina.

Until we get a US senator on Senate Defense Appropriations, that is.

North Carolina is the only Southern state that does not have a major defense manufacturing facility building military jets, tanks or ships. There is a direct correlation between that fact and the absence of a North Carolina senator sitting on Senate Defense Appropriations.

North Carolina is the only Southern state without a major automobile manufacturing facility such as BMW in South Carolina or VW in Tennessee. There is an indirect but strong correlation between that fact and no defense facilities due to the inconvenient fact that no North Carolina Senator currently is sitting on Senate Defense Appropriations and hasn’t for what seems like an eternity.

It has only been close to a century.

The last time a North Carolina US Senator served on the all-powerful Senate Appropriations Committee for any appreciable length of time was a decade before World War II.  1931. Senator Lee Overman.

He retired 87 years ago.

North Carolina has sent more US Senators to Washington since World War II than perhaps any other state in the South. Perhaps the entire nation, exempting Hawaii and Alaska.

20 North Carolinians have served in the US Senate since WWII. None have served on Senate Defense Appropriations. Not Senators Reynolds, Hoey, Broughton, Graham, Smith, Lennon, Scott, Ervin, Jordan, Helms, Morgan, East, Broyhill, Sanford, Faircloth, Edwards, Dole, Hagan, Burr or Tillis.

Lots of economic and business factors go into the decision-making for any major corporation to move to a new state to set up manufacturing facilities. However, when it comes to defense manufacturing plants and jobs, nothing is more important than having a US Senator on Senate Appropriations to steer investments to their state and support the appropriations necessary to build and sustain the program.

States such as South Carolina, Alabama and Mississippi have elected and kept US senators in office long enough to get on Appropriations and then serve on the Defense Appropriations Subcommittee where all the major defense programs and materiel production are considered every year.

Once a US senator gets on Defense Approps and steers a few defense contracts to their home states, then the level of specialized training for defense workers goes way up in that state and other companies such as automobile companies can come in and poach qualified workers and technicians for their manufacturing facilities.

As one missile defense engineer told me in Senator Dole’s office: ‘Why would we come to North Carolina when we can go to Alabama and throw a rock into Huntsville and hit hundreds of highly-trained and skilled aerospace and metallurgical engineers in their helmets and recruit them to come work for us after the federal government has basically paid for all of their training in these specialized areas?’

Electing a US Senator from North Carolina to serve on the Senate Defense Appropriations Subcommittee would end this Sisyphean effort for good.

(footnote: Cameron Morrison was on the Senate Appropriations Committee for 2 short years from 1931-1933. Lauch Faircloth was the last NC Senator on Senate Appropriations for 2 short years as well from 1997-1999 and served on the District of Columbia subcommittee)

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Thursday, January 11, 2018

#ItsYourMoney #NotTheirs

You 'give' your money to the government to take care of various things.
The government does not 'create wealth' and then give it to you.
(first published in North State Journal 1/10/18)

The Tax Cuts and Jobs Act Bill (TCJA) of 2017 is now law. What next?

The first thing every taxpayer should say out loud is this:

‘It Is My Money First. Not The Government’s!’

Every 30 years or so, the American public gets blinded by the promises of ‘progressive government’ and begin to believe that the government somehow supersedes them when it comes to spending the hard-earned money they earn each and every day.

Before Ronald Reagan routed President Jimmy Carter in 1980, many people had been hoodwinked into believing that the federal government could spend their money better than they could. Many believed their tax refund was a ‘gift’ from the federal government each year for some reason.

The ‘Reagan Revolution’ upset that apple cart for most of the ensuing 30 years. When President Obama took office in 2009, he sought to expand the role of the federal government in virtually every aspect of American life in the aftermath of the Great Crash and Recession and many people believed in the supremacy of government again.

Perhaps things will change now that the average taxpaying family of 4 may save approximately $2400 per year due to the TCJA 2017.

One of the first things any taxpayer should do in January, 2018 is review their expected income for the upcoming year and make the necessary adjustments to their withholding per pay period in their W-4.

If you do not make the necessary adjustments, you may wind up letting the federal government in Washington use it all as an interest-free loan for the entire year before issuing a refund in April 2019.

It would be quite possible that almost all of the tax cuts you expect to receive will not be passed on to you in the form of higher net take-home pay in a regular paycheck.

Instead, your money would be sent to Washington only to be used to spend on other federal programs until a refund is sent back in the spring of 2019, 16 months from now.

On top of making sure you don't preclude yourself from getting immediate monthly tax relief from the TCJA of 2017, every family should take a serious look at their last tax refund from the US government and ask this serious question:

'Why in the world did I give the US government an interest-free loan of $3000 last year?'

The average taxpayer received a refund check from Washington in 2016 for about $3000. 110 million taxpayers received a refund check of about $3000, 2/3rds of all taxpayers who filed returns for the previous taxable year.

None of them received any interest for allowing Washington to use their money all year.

$330 billion in total refunds were sent out by the US government in 2016. That represented a massive $330 billion interest-free loan that funded 97% of the federal share of Medicaid for the entire year.

If the average American taxpaying family adjusted their W-4 exemptions upwards to account for the tax cuts and made sure they would get $1 in a refund check in 2019 instead of $3000, they could expect to see the additional $200/month in tax relief from TCJA 2017 plus another $250 per month from lower withholdings in their monthly take-home pay for a total of $450 more per month in disposable income they could then spend or save as they see fit during the year.

Not the government.

$450 more per month in regular take-home pay for the average American family is $5400 more in their pockets over what was there in 2017. That is $54,000 more in disposable income over 10 years available to spend as you see fit during the year.

Not Washington.

You will be glad you did. Do it for you and your family's sake.

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