Is a VAT Tax Back on the Table?

By Gerard Lameiro

It has been reported that President Obama might consider a VAT (or Value-Added Tax) - essentially a National Sales Tax. Recently, former Federal Reserve chairman Paul Volker brought up the topic of a VAT tax as a potential way to boost taxes. But others thought much differently, including the U.S. Senate that voted overwhelmingly 85-13 last week in a non-binding resolution to state that a VAT "is a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery." After that Senate vote, it sounded like this bad idea would go away. Now, we learn it might be back on the table. What is a VAT tax? What would a VAT tax really do to America and to our struggling economy? A VAT tax is a type of excise tax that works much like a National Sales Tax. However, it’s actually worse than a sales tax. A VAT tax charges a tax on a product at each stage of production, up to and including, the final sale to the consumer. [more...]

Green Jobs vs. Blue Jobs - Which Jobs Are Better for America?

By Gerard Francis Lameiro

An article in The Wall Street Journal this week discusses the fact that despite considerable hype over green jobs and government spending, green jobs are just plain scarce. Indeed, renewable energy rhetoric has run into real world reality! Is anyone surprised?

The President wants to create millions and millions of green jobs, and, in fact, some money from the $787B stimulus spending package specifically targets green job creation. Earlier this year, a new $100M government program was also announced for the purpose of giving out renewable energy job-training grants. Yet, few green jobs have been created. So, where are all these green jobs? What’s the problem?

America does need new jobs. Since the beginning of the Great Recession, we have lost about 11,000,000 jobs. That’s terrible, especially if you or a family member have been impacted. The answer is not government spending and it’s not green jobs. The answer is blue jobs. Blue jobs are the jobs created by the Free Market. (Blue is the color associated with Freedom. It’s the color of blue skies. It’s the color of optimism.) [more...]

Is the Outlook for Jobs Very Bleak?

By Gerard Lameiro

An opinion piece in The Wall Street Journal this week paints a very gloomy picture for jobs in America. According to the article, at least one third of the 162,000 new jobs created in March were temporary census jobs and the actual new jobs created were insufficient to keep up with population growth. In addition, the American Economy has fallen behind by 11 million jobs since the start of this “Great Recession” and if job growth were to take off in the near future, it still might take up to eight years to catch up to where we were in 2007. Finally, Americans with jobs are accepting lower pay and lower benefits just to keep their current jobs. Is the outlook for jobs really this bleak? More importantly, is there anything we can do to fix this situation? [more...]

A Strong Case against Health Care "Reform"

By Gerard Lameiro

It Means Higher Taxes and Additional New Taxes. Yes, a new entitlement program for all Americans will cost lots of money. Higher taxes and totally new taxes will be needed. Already proposed tax increases include the extension of a 2.9% Medicare payroll tax to interest, dividends, capital gains, annuities, royalties, and rents for some tax payers. An additional 0.9% payroll tax has also been proposed. Forcing every American to purchase health care insurance (possibly at a higher cost) is also an implicit tax.

It Means Fewer Jobs. Yes, taxes and jobs are closely correlated. With higher taxes pulling dollars out of the private sector to pay for health care, comes declining investment dollars for new businesses and new jobs. Government spending for health care has a much lower economic multiplier than private sector dollars spent for health care. Overall new job creation will be lower under government-controlled health care. [more...]

Dallas Fed Chief Calls for Breakup of 'Too Big to Fail' Banks

By Tim Connolly

Dallas Federal Reserve Bank President Richard Fisher is calling for the breakup of banks too big to fail; and at Winning Strategies, we believe this is an idea whose time has come.

Federal Reserve Bank of Dallas President Richard Fisher traveled to New York to trumpet a message he's told Texas audiences before: Banks that are too big to fail are too big to exist in the first place. Speaking Wednesday at the Council on Foreign Relations, Fisher said big, systemically important banks should be dismantled before regulators have to deal with another crisis like the one that nearly brought down Wall Street and the rest of the U.S. financial system in late 2008. "The dangers posed by too-big-to-fail banks are too great," he said. Fed Chairman Ben Bernanke and others have said Congress should pass a law giving regulators "resolution authority" to close down failing financial companies. But Fisher, acknowledging that his views might be "slightly radical," called for an international agreement to break giant banks into more manageable pieces. [more…]

Foreign Demand for U.S. Treasury Securities Take $53 Billion Record Fall in December

...is this the Canary in the Gold Mine for U.S. Debt Demand?

By Tim Connolly

CNBC reported that per U.S. Treasury data, foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.

The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits. This could be the leading indicator of a precipitous drop in demand for U.S. debt, and absolutely reinforces the need to FREEZE THE BUDGET NOW!

Per CNBC, The Treasury Department reported that foreign holdings of U.S. Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009. The big drop in China's holdings meant that it lost the top spot in terms of foreign ownership of U.S. Treasuries, dropping to second place behind Japan.

Japan also reduced its holdings of U.S. Treasuries, cutting them by $11.5 billion to $768.8 billion in December, but that amount was still more than China's December total of $755.4 billion. The $53 billion decline in holdings of Treasury securities came primarily from a drop in official government holdings, which fell by $52.3 billion. The holdings of foreign private investors fell by $700 million during the month of December. [more…]

True Health Care "Reform" Requires Free Market Solutions

By Dr. Gerard Francis Lameiro, Ph.D.

Health Care "Reform" continues high in the news this week with President Obama’s upcoming Health Care Summit. What’s important to realize is true health care reform requires free market solutions. More government controls, regulations, mandates, and subsidies will only create more inefficiencies, higher costs for health care, higher costs for health care insurance, lower incentives for medical innovations, lower quality, and eventually, rationing of health care services. Individuals will also find their economic and personal freedom restricted further. It’s true our health care system is broken and needs to be fixed. But, government is the problem, not the solution. Government tax policies as well as regulations and subsidies currently are blocking the health care market from functioning effectively. Giving consumers greater choices through competition (among both medical providers and health care insurers) will spur innovation, encourage price reductions, and improve the quality of health care. [more…]