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Economy
See other Economy Articles

Title: The Money Hole
Source: HE
URL Source: http://www.humanevents.com/article.php?id=44188
Published: Jun 18, 2011
Author: John Stossel
Post Date: 2011-06-18 09:17:52 by CZ82
Keywords: None
Views: 124944
Comments: 157

The Money Hole

by John Stossel, 06/15/2011

America is falling deeper into debt. We're long past the point where drastic action is needed. We're near Greek levels of debt. What's going to happen?

Maybe riots -- like we've seen in Greece?

We need to make cuts now.

Some governors have shown the way. You know about Chris Christie, Scott Walker, Rick Scott, John Kasich, etc. But you probably don't know about Luis Fortuno.

Fortuno is governor of Puerto Rico. Two years ago, he fired 17,000 government workers. No state governor did anything like that. He cut spending much more than Walker did in Wisconsin. In return, thousands of union members demonstrated against Fortuno for days. They clashed with police. They called him a fascist

Fortuno said he had to make the cuts because Puerto Rico's economy was a mess.

"Not just a mess. We didn't have enough money to meet our first payroll."

Fortuno's predecessors had grown Puerto Rico's government to the point that the state employed one out of every three workers. By the time he was elected, Puerto Rico was broke. So the new conservative majority, the first in Puerto Rico in 40 years, shrank the government.

What was cut?

"Everything. I started with my own salary."

The protesters said he should raise taxes instead of cutting spending.

"Our taxes were as high as they could be, actually much higher than most of the country. So what we've done is the opposite." Fortuno reduced corporate taxes from 35 percent to 25 percent. He reduced individual income taxes. He privatized entire government agencies.

"Bring in the private sector," Fortuno said. "They will do a better job. They will do it cheaper."

Fortuno's advice for leaders who want to shrink the state: "Do what you need to do quickly, swiftly, like when you take off a Band-Aid. Just do it. And move on to better things."

Canada did that years ago.

When I think Canada, I think big government. I'm embarrassed that I didn't know that in the mid-'90s, Canada shrank its government. It had to. Its debt level was as bad as ours is today, almost 70 percent of the economy. Canada's finance minister said: "We are in debt up to our eyeballs. That can't be sustained."

Economist David Henderson, a Canadian who left Canada for the United States, remembers when The Wall Street Journal called the Canadian dollar "the peso of the north." It was worth just 72 American cents. "Moody's put the Canadian federal debt on a credit watch," Henderson said.

The problem, he added, was that Canada had a government safety net that was more like a hammock.

"When I was growing up in Canada, people who went on unemployment insurance were said to go in the 'pogie.' You could work as little as eight weeks, taking the rest of the year off."

So in 1995 Canadian leaders cut unemployment benefits and other programs. It happened quietly because it was a liberal government, and liberals didn't want to criticize their own. The result was that Canada's debt stopped increasing. As the government ran budget surpluses, the debt went down.

"The economy boomed," Henderson said. "Think about what government does. Government wastes most of what it spends, and so just cutting government and having that money in the hands of people means it's going to be used more valuably."

Canada fired government workers, but unemployment didn't increase. In fact, it fell from 12 percent to 6 percent. Canadian unemployment is still well below ours. And the Canadian dollar rose from just 72 American cents to $1.02 today.

Canada also raised some taxes. But the spending cuts were much bigger, six to one: agriculture was cut 22 percent; fisheries, 27 percent; natural resources, almost 50 percent.

"We should learn from Canada's experience that you can cut government substantially," Henderson said. "It is so wasteful. There's so much to cut, without causing much real pain -- not causing pain, but helping your economy grow, helping people become better off."

Henderson added, "We need to move more quickly than the Canadians did. Unfortunately, we're moving more slowly than the Canadians did."

If we're moving at all.

While Canada thrives, we pour more money down the hole.


Poster Comment:

Now we know why Obozo went to Puerto Rico, can't have an American "territory" doing just the exact opposite of what the Great Leader is doing.....

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#3. To: A K A Stone (#1)

There should be no federal income tax. It isn't needed. Cut unconstitutional spending and the budget will have a surplus.

The rich will never allow that to happen.

mininggold  posted on  2011-06-18   11:15:08 ET  Reply   Trace   Private Reply  


#4. To: mininggold (#3)

The lazy class would actually have to work for a living instead of hand outs from the government.

The rich aren't all of the same opinion.

What is your definition of rich?

I would bet most would love to get rid of federal taxes.

Why do you doubt me. Haven't you learned anything about me yet?

A K A Stone  posted on  2011-06-18   11:18:21 ET  Reply   Trace   Private Reply  


#5. To: A K A Stone (#4)

Haven't you learned anything about me yet?

Yes; being a bible-thumping bigot is no way to go through life.

Fred Mertz  posted on  2011-06-18   11:20:54 ET  Reply   Trace   Private Reply  


#6. To: Fred Mertz (#5)

Why do you hate God Fred?

A K A Stone  posted on  2011-06-18   11:21:36 ET  Reply   Trace   Private Reply  


#7. To: A K A Stone (#6)

Why do you hate Mexicans? Oops, that's on the FEMA tornado thread.

Fred Mertz  posted on  2011-06-18   11:22:57 ET  Reply   Trace   Private Reply  


#8. To: Fred Mertz (#7)

Who said I hate Mexicans?

A K A Stone  posted on  2011-06-18   11:24:25 ET  Reply   Trace   Private Reply  


#9. To: A K A Stone (#4) (Edited)

What is your definition of rich?

I would bet most would love to get rid of federal taxes.

Since you only argue by what your feelings tell you, I still and will always have plenty of healthy doubt.

They only want the top tax brackets lowered as they want the middle class and poor to pay for it all.

mininggold  posted on  2011-06-18   11:26:56 ET  Reply   Trace   Private Reply  


#10. To: mininggold (#9)

You mean they are tired of paying taxes and lazy people getting the benefits of their work? Who would have guessed.

A K A Stone  posted on  2011-06-18   11:29:34 ET  Reply   Trace   Private Reply  


#11. To: A K A Stone (#1)

Some morons were on here complaining the Rich don't pay enough taxes. What a load of shit. Especially when half don't pay anything.

Umm - yeah - that's what happens when wealth is concentrated at the top.

Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).

sociology.ucsc.edu/whorulesamerica/power/wealth.html

If you want more people to pay income taxes, then spread the wealth around so more people have income that rises to taxable levels.

Of course if you're talking about all taxes and not just income taxes then your statement is false.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:30:20 ET  Reply   Trace   Private Reply  


#12. To: lucysmom (#11)

There are no poor people in America. Or let me put it this way. There are no unwilling poor people in America.

The poorest people here have far more then "rich" people in any other age or nation.

If someone gets government money. Would you be ok with going in their house and seeing if they have big screen TV. Xbox, pS3 and a cell phone. And confiscating it to pay back society?

A K A Stone  posted on  2011-06-18   11:33:10 ET  Reply   Trace   Private Reply  


#13. To: A K A Stone (#10) (Edited)

You mean they are tired of paying taxes and lazy people getting the benefits of their work? Who would have guessed.

I think it's just the opposite since the middle class and the poor make up the vast majority of the soldiers who put their lives on the line in the military, to protect the corporate business interests.

mininggold  posted on  2011-06-18   11:33:58 ET  Reply   Trace   Private Reply  


#14. To: mininggold (#9)

They only want the top tax brackets lowered as they want the middle class and poor to pay for it all.

No doubt they'd like to duplicate the French system, pre-revolution, the middle and lower classes paid all taxes while the upper crust spent the money.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:34:14 ET  Reply   Trace   Private Reply  


#15. To: mininggold (#13)

How does the military protect their business interests?

A K A Stone  posted on  2011-06-18   11:34:47 ET  Reply   Trace   Private Reply  


#16. To: lucysmom (#14)

There should be a 10 percent flat tax. That is fair and more then enough money for the government to provide legitimate functions.

A K A Stone  posted on  2011-06-18   11:35:39 ET  Reply   Trace   Private Reply  


#17. To: lucysmom (#14)

No doubt they'd like to duplicate the French system, pre-revolution, the middle and lower classes paid all taxes while the upper crust spent the money.

These types think they will be leading the revolution not realizing that when it comes they will be the ones revolted against.

mininggold  posted on  2011-06-18   11:37:44 ET  Reply   Trace   Private Reply  


#18. To: A K A Stone (#12)

The poorest people here have far more then "rich" people in any other age or nation.

Like servants, land, food, political power...

If someone gets government money. Would you be ok with going in their house and seeing if they have big screen TV. Xbox, pS3 and a cell phone. And confiscating it to pay back society?

Not many big screen TVs among the homeless.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:39:04 ET  Reply   Trace   Private Reply  


#19. To: A K A Stone (#15) (Edited)

How does the military protect their business interests?

Really, you don't even know what's happening overseas? Vietnam was fought over the right for you to have rubber for your tires.

mininggold  posted on  2011-06-18   11:39:14 ET  Reply   Trace   Private Reply  


#20. To: lucysmom (#18)

Not many big screen TVs among the homeless.

How many welfare deadbeats have those items? Answer most.

A K A Stone  posted on  2011-06-18   11:41:00 ET  Reply   Trace   Private Reply  


#21. To: mininggold (#19)

How does the military protect their business interests?

Really, you don't even know what's happening overseas?

Yeah Obama is ruining our reputation. China is making lots of deals.

A K A Stone  posted on  2011-06-18   11:41:39 ET  Reply   Trace   Private Reply  


#22. To: A K A Stone (#21)

Yeah Obama is ruining our reputation. China is making lots of deals.

You trust the Chinese after they put melamine in your food? You will never learn will you?

mininggold  posted on  2011-06-18   11:43:10 ET  Reply   Trace   Private Reply  


#23. To: A K A Stone (#21)

I see the two sweethearts are in rare form today!

Tag line: I wuz HACKED, cuz I SAY so!

Wood_Chopper  posted on  2011-06-18   11:44:36 ET  Reply   Trace   Private Reply  


#24. To: mininggold (#22)

I am curious to how your brain malfunctions. How do you get that I trust the Chinese after that statement? China is our enemy. We should put 1000 percent tariffs on all of their goods. That is for starters.

A K A Stone  posted on  2011-06-18   11:44:44 ET  Reply   Trace   Private Reply  


#25. To: Wood_Chopper (#23)

You talking about Fred and Buck or mining and mom?

A K A Stone  posted on  2011-06-18   11:45:20 ET  Reply   Trace   Private Reply  


#26. To: A K A Stone (#24)

I am curious to how your brain malfunctions. How do you get that I trust the Chinese after that statement? China is our enemy. We should put 1000 percent tariffs on all of their goods. That is for starters.

It's not my fault your statement was so obtuse.

mininggold  posted on  2011-06-18   11:45:56 ET  Reply   Trace   Private Reply  


#27. To: mininggold (#26)

You said our military makes it good for business.

I simply pointed out that they are breaking things and other nations don't like that.

China is playing chess and getting lots of mineral deals.

It isn't my fault that you can't back up your rhetoric.

A K A Stone  posted on  2011-06-18   11:47:31 ET  Reply   Trace   Private Reply  


#28. To: mininggold (#17)

These types think they will be leading the revolution not realizing that when it comes they will be the ones revolted against.

Be careful what you pray for...

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:47:56 ET  Reply   Trace   Private Reply  


#29. To: A K A Stone (#20)

How many welfare deadbeats have those items? Answer most.

Of course you can back that up with actual facts.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:49:43 ET  Reply   Trace   Private Reply  


#30. To: CZ82 (#0) (Edited)

According to the Organization for Economic Cooperation and Development, America has the most progressive tax system in the world. The top 10% of income earners in the U.S. pay a larger share of their income than in any other developed country. The U.S. soaks the rich like no other country does.

Country 1. Tax Share of taxes of richest decile 2. Share of market income of richest decile 3. Ratio of tax to income shares for richest decile (1/2)
United States 45.1 33.5 1.35
Australia 36.8 28.6 1.29
Netherlands 35.2 27.5 1.28
Ireland 39.1 30.9 1.26
Canada 35.8 29.3 1.22
Finland 32.3 26.9 1.2
United Kingdom 38.6 32.3 1.2
New Zealand 35.9 30.3 1.19
Italy 42.2 35.8 1.18
Czech Republic 34.3 29.4 1.17
Korea 27.4 23.4 1.17
Luxembourg 30.3 26.4 1.15
Slovak Republic 32 28 1.14
OECD-24 31.6 28.4 1.11
Austria 28.5 26.1 1.1
France 28 25.5 1.1
Germany 31.2 29.2 1.07
Denmark 26.2 25.7 1.02
Japan 28.5 28.1 1.01
Sweden 26.7 26.6 1
Norway 27.4 28.9 0.95
Belgium 25.4 27.1 0.94
Iceland 21.6 24 0.9
Switzerland 20.9 23.5 0.89
Poland 28.3 33.9 0.84


"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899

jwpegler  posted on  2011-06-18   11:50:06 ET  Reply   Trace   Private Reply  


#31. To: lucysmom (#11)

If you want more people to pay income taxes, then spread the wealth around so more people have income that rises to taxable levels.

Wouldn't creating jobs for those people be a better solution????

Give them the opportunity to be responsible for themselves and their families!!!! That might even create a little more honesty and integrity in this country, what a novel idea.....

"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning

CZ82  posted on  2011-06-18   11:51:52 ET  Reply   Trace   Private Reply  


#32. To: A K A Stone (#27)

You said our military makes it good for business.

I simply pointed out that they are breaking things and other nations don't like that.

After we have destroyed most of their cultural history do we not pay our buisinesses to rebuild these countries in our own image afterward?

We are in Afghanistan and Iraq to make sure that oil gets to your local refinery. Saddam setting the wells on fire after the Gulf War was the clincher, not all that malarkey about human rights.

mininggold  posted on  2011-06-18   11:53:49 ET  Reply   Trace   Private Reply  


#33. To: CZ82 (#31)

Lucysmom thinks that the government should tell you what you get and how much. It shouldn't be a result of your hard work and planning.

Kind of like star trek. Where everyone has a replicator and there is no money.

A K A Stone  posted on  2011-06-18   11:54:04 ET  Reply   Trace   Private Reply  


#34. To: jwpegler (#30)

That is meaningless without discussing income distribution.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:54:41 ET  Reply   Trace   Private Reply  


#35. To: CZ82 (#31)

Wouldn't creating jobs for those people be a better solution????

Give them the opportunity to be responsible for themselves and their families!!!! That might even create a little more honesty and integrity in this country, what a novel idea.....

Their jobs are being created in China.

mininggold  posted on  2011-06-18   11:54:57 ET  Reply   Trace   Private Reply  


#36. To: CZ82 (#31)

Give them the opportunity to be responsible for themselves and their families!!!! That might even create a little more honesty and integrity in this country, what a novel idea.....

This current crisis is due to the lack of integrity at the top, not the bottom.

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   11:56:08 ET  Reply   Trace   Private Reply  


#37. To: lucysmom (#34)

That is meaningless without discussing income distribution.

So income shouldn't be earned. It should be distributed.

Should it be evenly distributed?

A K A Stone  posted on  2011-06-18   11:56:28 ET  Reply   Trace   Private Reply  


#38. To: lucysmom (#34)

That is meaningless without discussing income distribution.

Do you know how to read? Apparently not. So let me explain it to you.

The first column shows the percentage of taxes the top 10% pays.

The second column shows the percentage of income the top 10% earns.

The third column shows the ratio of taxes to income that the top 10% pays.

These are called facts, and they are very relevant. What's not relevant is a bitter old coot blaming others for her own failures in life.


"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899

jwpegler  posted on  2011-06-18   11:59:55 ET  Reply   Trace   Private Reply  


#39. To: jwpegler (#38)

These are called facts

You might need to get the dictionary out for them and define facts.

A K A Stone  posted on  2011-06-18   12:04:14 ET  Reply   Trace   Private Reply  


#40. To: mininggold (#32)

After we have destroyed most of their cultural history do we not pay our buisinesses to rebuild these countries in our own image afterward?

Remember when Iraq was declared to be open for business? Turned out there was a little flaw in the plan:

When Paul Bremer shredded Iraq's Baathist constitution and replaced it with what The Economist greeted approvingly as “the wish list of foreign investors,” there was one small detail he failed to mention: It was all completely illegal. The CPA derived its legal authority from United Nations Security Council Resolution 1483, passed in May 2003, which recognized the United States and Britain as Iraq's legitimate occupiers. It was this resolution that empowered Bremer to unilaterally make laws in Iraq. But the resolution also stated that the U.S. and Britain must “comply fully with their obligations under international law including in particular the Geneva Conventions of 1949 and the Hague Regulations of 1907.” Both conventions were born as an attempt to curtail the unfortunate historical tendency among occupying powers to rewrite the rules so that they can economically strip the nations they control. With this in mind, the conventions stipulate that an occupier must abide by a country's existing laws unless “absolutely prevented” from doing so. They also state that an occupier does not own the “public buildings, real estate, forests and agricultural assets” of the country it is occupying but is rather their “administrator” and custodian, keeping them secure until sovereignty is reestablished. This was the true threat to the Year Zero plan: since America didn't own Iraq's assets, it could not legally sell them, which meant that after the occupation ended, an Iraqi government could come to power and decide that it wanted to keep the state companies in public hands, or, as is the norm in the Gulf region, to bar foreign firms from owning 100 percent of national assets.

Best article I've ever read on the subject.

www.harpers.org/archive/2004/09/0080197

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   12:06:42 ET  Reply   Trace   Private Reply  


#41. To: A K A Stone (#39)

You might need to get the dictionary out for them and define facts.

LOL. I would rather run over my foot with a lawnmower than try to explain anything else to these resentful, envious, dimwits. There's no point.


"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899

jwpegler  posted on  2011-06-18   12:08:26 ET  Reply   Trace   Private Reply  


#42. To: A K A Stone (#33)

Lucysmom thinks that the government should tell you what you get and how much. It shouldn't be a result of your hard work and planning.

How many people have seen the fruits of their hard work and planning wiped out in the collapse the ponzi scheme orchestrated by the banksters?

It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte

lucysmom  posted on  2011-06-18   12:12:19 ET  Reply   Trace   Private Reply  



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