Politics, the Stock Market and Debt

Since January 1, 2016, the news from Wall Street has been discouraging.  The Dow Jones Industrial Average is down by something around 7% and the other indices have not performed well either.  Nor have other markets internationally been doing well .  Additionally, Wall Street did not perform well during the last two months of 2015 either.

During the earlier few years, as the stock indices kept pushing relentlessly higher and higher, there weren't too many who were questioning what caused such an unprecedented phenomenon.  However, now, as billions and billions get burned into ashes day after day, many are asking why.

There is one factor, however, which, to some observers at least, has not escaped consideration.  For years following the financial collapse of 2008, the Fed, the Federal Reserve Bank, had been pumping something on the level of $ 70 billion into the financial markets and the stock market, each and every month.  That, under a theory which Mr. Bernanke, the former Chairman of the Fed, called „Quantitative Easing,” whatever that means and something which President George H. W. Bush, the elder President Bush, may have called Vodoo Economics.  Some say the monthly amount by the Fed into the Financial Markets for years and years on end might have been less, some, maybe even more, but all agree that the amount of money pumped into the markets was enormous, beyond anything which one could possibly comprehend.

As we observed here a good while ago, to put this into perspective, $ 70 billion pumped into the financial markets every month would be the equivalent of giving, in cash, more than $ 17,000 each month to every man, woman and child in the United States.  That, most of us agree, is a staggering sum of money for years and years on end and, indeed, $ 17,000 in the hands of every living person in the United States, month after month after month, could have probably done as much, if actually not even much, much more (and more quickly) in pulling the United States out of the financial crisis which has been generously described as the Great Recession, which, we are not sure, is better or worse than a Small Depression.

The total sum of money which the Fed pumped into the markets is technically not part of the Federal Budget and did not have to be approved by Congress.  Technically, it is backed by securities of various sorts which have been purchased by the Fed but, which, if they decrease in value or fail, would create an additional debt incurred by the Federal Government.

It is relatively easy to see that, during this period,  except for the most inept, everyone made money on the Stock Market and other Financial Markets.  Perhaps it is not that much more difficult to see that once this money source dried up, the demand to buy securities, dropped correspondingly.

We all suspect, although no one knows for sure, that this extraordinary „Financial Tool” as former Secretary of the Treasury Paulsen, ex Goldman Sachs described it, ended sometime around November 2015; around that time and shortly before, the blame for the instability in Financial Markets was thrown on the Chinese; surely the Chinese bear some of the blame for what is going on but not all of the blame.

There is, however, a footnote to this which is particularly worrysome.  Currently the United States Treasury carries a national debt of something on the order of $ 19 trillion.  That, of course, is a staggering amount of debt; representing something like 20 years of Wall Street „Quantitative Easing.”   The Fed has been extremely careful in swapping these federal debt obligations for longer and longer terms, for up to 20 years, „locking in” near zero interest rates.  However, as the Fed has been forced to start inching up the interest rates, the new debt coming in from federal deficits (along with any other debt renewals has started inching upwards; this, in effect, accelerates the rate at which the national debt would increase, since none of the debt is being retired; actually, new debt has been piling up which, accordingly, would also have to be financed at the current and coming higher rates.

Mrs. Yellen, the current Fed Chairman has been trying to navigate through these treacherous and, one can even say, with much vigor and wisdom, although, regrettably, she has few allies; the current Federal Budget, not yet even agreed upon is in danger throwing the federal deficits into an even worse quagmire.
 

The Social Security Tax - why it is a Regressive Tax and what Solutions are possible

One of the Tax Increases enacted or, more correctly, reinstated by the ,,Fiscal Cliff’’ Legislation is the additional 2% Social Security Tax.  This Tax was reduced from 6,2% to 4,2% by the Bush Tax Cuts; in one of the more bizarre Offshoots of the ,,Theory of Reaganomics,’’ take in less and pay out more, don't worry, as an old Sales Manager used to say, we'll make it up in Volume.

Of course, it doesn't work that Way but, then again, Economics was not Mr. Bush's Forté.  We don't know what his Forté was, actually, but certainly Economics was not one of them.

As a Result of this Action and previous underlying Actions, the Social Security Fund is facing a Deficit (Loss) of around $ 100 Billion in 2013; nobody knows for sure, really, but this Estimate is as good as any.  Reverting to the 6,2% Rate will alleviate the Problem somewhat but nowhere nearly enough.

Everybody who gets a Wage pays this Tax (matched by an equal Amount in Employer Contributions; the Employer Contributions Rate had not been reduced so it did not have to be revised - interestingly, no ,,Job Creation’’ Argument was made for that by the Bush Administration); however, the more interesting Part is that this Tax applies only to the First $110.000,00 or so of Income that everybody earnes; after that, one is home free; no 6,2% for Employee nor Employer.  This Policy, which interestingly, is not practiced by any other major Country which has a Social Security Type System merely exacerbates one of the most regressive Taxes imaginable.  Doubling the Social Security Tax Ceiling would eliminate 40-50% of the Annual Deficit and eliminating it altogher would allow for financing of Social Security and Medicare without straining any other Part of the Federal Budget.

Raising or eliminating the Ceiling would affect only that Part of Salaries in excess of $ 110.000,00 which would allow the Tax to become less regressive (although it would still be regressive) and bring a slight Modecum of Equity to the Social Security System as well as resolving another Piece of the Federal Budget and Deficit Dilemma.

The one Caveat would be, not to let the Clintons get Wind of this (admittedly, a hard Feat to accomplish) and throw the additional Revenues into the General Fund (as they did before), claim that somehow they ingeniously balanced the Budget and then leave for someone else after them the Task of straightening out the Mess once again.

The $ 1 Billion Presidential Election: One Billion Dollars and 10 Days to go

Way back then, way back when, in the 1960's an American writer by the Name of Theodore H. White came up with a brilliant Idea:  write a Book each four Years entitled ,,The Making of the President."  The Idea met with great Success.  Theodore H. White, who first wrote ,,The Making of the President 1960'' about the historic Kennedy-Nixon Campaign, went on to write Sequels about subsequent Presidential Elections, none as succesful as his First One, but still, all of them succesful enough.  Today, this Tradition seems to have faded.

So, one wonders, what insightful Issue might be noteworthy enough to bring to the Forefront if one were to write a Book titled ,,The Making of the President 2012.''  Several Campaign Issues which have been played up by the two Candidates come to mind.

§  Jobs - this is an Issue that impacts every American.

§  The Economy - again, this is an Issue that also impacts every American as well.

Other Issues, be they in the Area of Foreign Policy, Women's Rights, Homosexual Rights, Minority and Immigration Issues, are all Policy Issues, which, while being important enough and likely to affect the Outcome of the Election in a profound Manner, are still issues which, directly, ipso Facto, do not directly and imminently affect every American in the same Way that Jobs and the Economy (Two Facets of one and the same Issue) do.

However, there is another Aspect which does affect each and every American and, at that, in a profound Way and that is the Deficit.  Currently at $ 16 Trillion (it was 11 Trillion when President George W. Bush left Office) it is projected to rise in the upcoming Four Years, regardless of which Candidate wins the coveted Office.

http://economywatch.nbcnews.com/_news/2012/10/15/14453514-whether-its-obama-or-romney-either-will-face-huge-obstacles-on-economy?lite

And, aside from Generalities which are difficult to pin in Terms of tangible Policies, neither Candidate has a stark, aggressive and palpably effective Plan to deal with this Morass.  Even more worrysome is the Fact that the Federal Debt is held largely in foreign Hands, China, surprisingly, Japan (No. 2), according to several Reports and then followed by other Countries.

More worrysome is the Fact that under Mr. Bernanke's Policies, the Federal Deficit has become more susceptible to short Term Effects, this, because of Mr. Bernanke's Implementation of something he calls ,,Operation Twist'' under which the Fed is retiring as much as possible of the Long Term Debt, in exchange for Short Term Debt at somewhat lower Interest Rates.

This, of course, has the Effect of reducing, in the Short Term, the Federal Deficit which would be worse if the Interest Rates paid by the Federal Government were higher rather than lower, as they would become and are becoming, under the Policy of swapping higher Interest Long Term Debt for (slightly) lower Interest Short Term Debt, sometimes as short as a Month, a Week, or even a Day.

http://bottomline.nbcnews.com/_news/2012/10/11/14370868-washington-must-avoid-fiscal-cliff-goldmans-blankfein-warns?lite

However, there is serious Danger in the Policy being pursued by Mr. Bernanke.  Any Increase in the Interest Rates (on which the Fed has mercilessly kept the Lid on), would be ruinous for the Federal Debt.  Higher Interest Rates would push Interest Expenses into the Stratosphere, worsen the Deficit and Situations like that are ocurring right now not only in Greece, but also in places like Italy and Spain.  Mr. Bernanke does not tell us what Plan he has to deal with these Dangers and, what the Heck?  He wants to retire after his current Term expires.  Let someone else deal with that Problem.

 

But for the Presidential Candidates, there is another Aspect.  The President of the United States, or an Aspirant to that High Office, the Highest Office in the Land can set an Example.  An Example of a Modecum of Fiscal Discipline.  And, Mr. Obama, who has been unable to exercise this and Mr. Romney who claims he has ,,Experience'' in Fiscal Discipline have both set an unglorious Example:  this will be the First Presidental Election which will cost more than $ 1 Billion, which, as everyone else knows, is $ 1000 Million, that is to say, the Equivalent of $ 3,00 being spent for each Man, Woman and Child in the United States; that includes everyone, voting or non voting.

A significant Part of this Expenditure is yet to happen and it is about to happen now:  in the last 10 hectic Days of the Election, on an unprecedented Advertising Blitz by both Candidates.  That means, the Candidates would not be spending the Bulk of this Money on explaining or discussing the Issues which affect the Nation but rather, spending the Money on Advertising of one Sort of another.  Someone even before Theodore H. White said that the campaign for President of the United States is akin to selling a Box of Cereal on Television.

 http://firstread.nbcnews.com/_news/2012/10/17/14511630-ad-spending-tops-800-million-on-pace-to-reach-or-come-close-to-1-billion?lite

What Confidence can this Kind of senseless Spending instill in the Electorate that the succesful Candidate Ten Days from now, is going to have what it takes and it is going to take a Lot, an awful Lot, to bring Sense and Reason to a Financial Mumbo Jumbo built Brick by Brick by President Reagan with his Supply Side Economics Theories, President Clinton with his ,,Take the Money from here, put it there and balance the Budget'' Theories,  President Bush with his we can do two Wars at the same Time and do everything else at the same Time Theories, Mr. Greenspan with his ,,Irrational Exuberence'' Theories,  Mr. Bernanke with his ,,Operation Twist'' Theories and, and...Mr. Obama who, regardless of what one's Opinion might be of him, certainly was faced, for the last Four Years with a nagging Question:  how do we get out of this Mess which took so long to create?

One Way, admittedly four Years later that both he and Mr. Romney could have done was:  don't spend this Kind of ,,Irrational Exuberance'' Money to be elected President.

The Vice Presidential Debate

The one and only Vice Presidential Debate took place on Thursday.  It was at a Level which far superceded the preceding Affair which took place Four Years ago between Vice President (then Senator) Joe Biden and then Governor of Alaska Sarah Palin.  The latter, one could say, was merely a Caricature of a Vice Presidential Candidate, a Choice which Senator John McCain came to regret deeply but, of course, too late for himself.

Vice President Joseph R. Biden

Both Vice President Joe Biden and Congressman Paul Ryan had one Job to do and they both knew it; enhance the Position of their respective Presidential Running Mate and inflict as much Damage on the Opposition as possible, especially in View of the unexpected outcome of the First Presidential Debate only a Week ago.

Congressman Paul D. Ryan

Each of the two Opponents put into sharp Focus the Positions of their respective Ticket although, sadly, the National Audience for the Debate was modest; not too many seemed to care, apparently, what each had to say.  At the same Time, however, this Observer believes, they both revealed, either unwittingly or because they did not know how else to avoid, the Weaknesses in their Views.

Vice President Biden argued eloquently and flawlessly for the Responsibilities of the Federal Government when it comes to Social Security and Medicare among other Things but he was not able to offer a Plan which would show how the Federal Government can sustain over the long Term, or even the short or moderate Term, these Expenditures.  Although the Vice President argued, passionately, for an end to the ,,Tax Cut'' for People making $250.000,00 or more, the Truth of the Matter is, even if that Plan were to materialize despite the fanatical and, some would say, illogical Opposition by the Republican Members of Congress, that, alone, would not come even close to beginning to deal with the horrendous Federal Deficit which threatens to cripple not only Social Security and Medicare, but much, much more.

Congressman Ryan, on the other Hand, made the Argument, with equal Eloquence, for the Management and Control of Social Security and Medicare (but not Defense) Costs.  Certainly, Management and Control of these Costs (whether in the Form proposed by Congressman Ryan, who has been advocating much of what he said long before he became a Vice Presidential Candidate) or another, are necessary.  But, assuming for a Moment, that everything that Congressman Ryan is proposing were to be implemented, that, too, would not come even close to dealing with the - just as horrendous - Federal Deficit.

So, where does that leave us?  Lost in the Equation was the Observation and Warning by IMF Director Christine Lagarde, who warned of dire Consequences if these severe financial Problems are not addressed and, soon.

Mme. Christine (Madeleine Odette) Lagarde, Director of the IMF

One interesting ,,Tidbit'' that came out during the dueling was about Embassy Security Details.  Vice President Biden pointed out, correctly, that Congressman Ryan had voted against increasing the Security Detail Budget for Embassies and Consulates abroad by $300 Million.  One might well wonder just how much Money is being spent on Embassy Security Details in the First Place, if the Increase that was being sought, alone, was $ 300 Million.  One might equally wonder why the U. S. Embassy in Baghdad has nearly 16,000 Individuals working there (Largest U. S. Embassy abroad, according to the last Fact Check).  You could ask, which is the Second largest U. S. Embassy abroad.  Here is the Answer:  Beijing, China and, although just recently opened, it is too small and the Construction of an Addition is under Way.
 

Interesting Argument - Billionaires should be taxed less because taxing them more inhibits their Inclination to make Charitable Donations

An interesting Argument comes from Billionaire Stephen Ross, Chairman of The Related Companies, who is saying, in Effect that a Limitation on the Ability to deduct his Charitable Donations from his Income Tax would influence how much Money he would give to Charities (of his Choice, we might add).

http://bottomline.nbcnews.com/_news/2012/09/23/14016571-tax-hikes-a-threat-to-charitable-giving-say-billionaires?lite


Not all Billionaires agree with this Argument.  However, taking Mr. Ross's Argument ,,ad Absurdum'' would mean that he (and other Billionaires like him), decides on the Distribution of Income, whether it be earned in the Form or Wages or, more likely, through other Sources; how the Part of the Income which is not kept by him (and others like him) is distributed either in Terms of funding Government Expenses or ,,Charities'' of his choosing.

We all are, I think, for reducing of Waste in Government; certainly one Way to accomplish this would have been to keep Congress more Days in Session, more than the 4 Days in August and the 8 Days in September.

However, not all of the 300 Million or so Souls who live in the United States, most likely, not a Majority of them, would agree that 400 or so Billionaires, whose Billions came out of the United States Economy (or elsewhere) but are certainly asseted as Holdings of United States Citizens/Residents, should benefit from lower Tax Rates or unlimited Charitable Deductions, in a Country confronting a catastrophic Budgetary Problem, solely for the Purposes of these Individuals having the Luxury of deciding how to distribute some of their Assets as they please.

Continuing horrific News out of Afghanistan

The Saga of horrific News out of Afghanistan continues.  17 Villagers in the Province of Helmand were beheaded, it is not clear whether before or after having been shot, because they were at a ,,Party'' and listening to Music.

http://worldnews.nbcnews.com/_news/2012/08/27/13499316-seventeen-villagers-beheaded-in-southern-afghanistan-after-music-party?lite

Two American Soldiers were killed (again) by Afghan Troops in Uniform.  President Obama reminded us, Four Years ago, of the horrific Price on ,,Blood and Treasure'' being paid in Iraq.  The War in Iraq has been concluded, not exactly as it was foreseen but the War in Afghanistan remains an Open Wound continuing to extract ,,Blood and Treasure.''

The Administration has a Withdrawal Plan from Afghanistan which may or may not be outgalloped by unfolding Events.  There are Problems with this Plan which are acknowledged by many, not the least of which being, the continuing Casualty Losses which have now taken a particularly sickening Turn with American Soldiers being shot by Afghan Soldiers.  The continuing Costs of Aid to Afghanistan, even after Troop Withdrawal, currently estimated by some to add up to $ 6 Billion annually, present, in View of Budgetary Constraints, a further Problem.

The Republican Presidential Candidate, Mr. Romney, bears, it appears, the Responsibility of presenting in explicit Detail what he intends to do about Afghanistan.  His Position, whatever that may be, will have an Effect both on ,,Blood'' and ,,Treasure.''

Pause for Thought needs to be given by both Candidates to the Fate of the Regime of President Karzai which is, according to general Concensus, not only corrupt but, more worrysome, shaky.

Going into the November Presidential Election requires a refining of the Position going forward on Afghanistan by both Candidates, so that the Conflict does not increasingly become ,,The Forgotten War'' which continues to extract ,,Blood and Treasure.''

The Making of the President 2012: $ 500 Million and counting

Recent News Articles suggest that the two Presidential Campaigns have spent $ 500 Million so far in the Effort.

Numerous other News Articles detail some of the Techniques being used in raising the Money for Presidential Campaigns, not the least, a Report published by The Associated Press today, 24 August 2012:

http://nbcpolitics.nbcnews.com/_news/2012/08/24/13454050-romney-uses-secretive-data-mining-exec-says?lite

One is left to wonder, how the Presidential Campaign would have looked so far and how it is going to go down to the Finish Line if, say, $ 499 Million less would have been spent on it.  One might be further left to ponder just what Kind of Message this sends to the Efforts to reach a Resolution out of the Budget Impasse.

 

A Letter to the Democratic Party Regional Director

Portions of the Letter and several Names have been edited.

...

Now there are many People who are far smarter than I am and I have no Idea how Things have been worked out or are going to be worked out on this Budget Thing.  All I know, as they used to say, is what I read in the Papers.  And what I read is that there is going to be a super bloody Fight over the next Sixth Months about these Cuts, and then something about a Constitutional Amendment and on and on and on.

We, when I say we, President Obama and all of us who voted for him inherited Two Wars from President Bush and they were both funded outside of the Budget by Mr. Cheney and, I suppose, Mr. Bush must have signed off on it.  But these Expenditures are being continued and they are huge and I do not sense any Urgency about the Money being spent, or as one might put it, wasted, on this.  I doubt that The Department of Defense can afford to get three competitive Bids every time they have to airfreight Drinking Water to Afghanistan.  Yet, that Money is coming out of somewhere and somebody is getting rich, very rich out of it.  That is just an Example.  And that is a Lot of Money.

Someone just acquiesced when Mr. Bernanke spent, I am not sure how much, they say, $ 6 or 7 Hundred Billion; that sounds like a Lot of Money to me, on ‘Quantitative Easing’ and for the World of me, I never heard that Phrase when I went to College nor ever since.  I just wonder whether President Wilson is rolling in his Grave when he hears Mr. Bernanke talk like that, wondering what has become of his beloved Princeton University.

Equally, a Lot of People are concerned about the Things that Mr. Geithner is doing in Office, including the Fact that he is spending more Time, the Way one hears it, talking to Wall Street People and Bank People each Day, than talking with Government People and, just intuitively, that doesn’t sound right either.

I am sorry that President Obama appears, some say, manœvered by People like this, after all, these People are not Tea Party Republicans, they work for the President and we all pushed for an Agenda when working to elect the President and overcame nearly astronomical Odds in order to prevail.

Moreover, it is disingenuous for both Mr. and Mrs. Clinton to trumpet that they have balanced the Budget when they took all of the Entitlement Funds, that includes Medicare and Social Security and dumped them in the General Fund.  Even my Cat, had I had one, would have known how to balance the Budget that Way.

One should perhaps lament not having President Bush, not George W. Bush, that other President Bush, to come out and say a few Words today, as he did to President Reagan, when he called this Type of Behaviour that President Reagan wanted to institute and instituted ‘Voodoo Economics.’  But President Reagan succesfully managed to kick the Can forward and now we all have to deal with it.

To this, one should reflect, perhaps, that the Republican Party was the Party of Abraham Lincoln, a Man who towers as a Beacon in the Annals of History throughout the World as someone who stood for Justice and Equality and paid with his Life for it, yes, Abraham Lincoln and not Ronald Reagan, as some of our Republican Friends would have us believe today and that the Democratic Party, the oldest Political Party in America and one of the oldest Political Parties in the World is the Party of Thomas Jefferson, who found his Inspiration in the Jewish Philosopher Baruch Spinoza and his Writings about Ethics, yes, Thomas Jefferson and not Bill Clinton.

The Budget Impasse

While Congress and the White House are struggling with the Debt Ceiling, Taxes and Expenditures, with so many Accusations being thrown in every which Direction, this Writer makes a modest Suggestion for a new Approach:

Under this Approach:

- President Obama would stop by Presidential Decree (no Congressional Approval needed), all Military Expenditures outside of the United States, except those needed to protect Diplomatic Missions and Government Officials travelling Abroad

- President Obama would fire Mr. Bernancke and Mr. Geithner, without appointing any Replacements for them

- By Executive Order, President Obama would direct Attorney General Holder to investigate any Allegations of Fraud and Mismanagement in any Government Expenditure of over $ 1 Billion

- By Executive Order, All Appointed Government Officials who earn in Excess of $ 100.000,00, would be required to study the Writings of Thomas Jefferson and pass a Course Completion Exam, in order to maitain future Job Tenure.  Those wishing to be considered for Promotions, should also be required to take Courses on Kant and Spinoza.

- President Obama would request Mrs. Clinton to return to the Air Force the Jetliner made available exclusively for her Use; however, she would continue to be free to travel anywhere she wishes internationally, via Military or Commercial Flights.

- Mr. Carter, at the frail Age of 86, would be called out of Disgrace and respectfully requested to conduct a Course on Zero Base Budgeting to all Members of Congress who wish  to receive future White House Invitations.  Mr. Carter is without Doubt going to accept this Responsibility.  Which Members of Congress would choose to attend, remains to be seen.  Side Bets on such Things would be allowed.

- The White House may consider reminding both the Republican and Democratic Congressional Leadership, but especially the Republican Leadership, that the Father and Shining Beacon of the Republican Party was Abraham Lincoln and not Ronald Reagan, that Ronald Reagan, who succeeded President Carter was the First to allow the Federal Deficits to explode to this insane Level of Magnitude, in no small Part through Military Expenditures for Things which have never been used and will never be used and that it was a Republican Senator from Pekin, Illinois (not China), to whom the Saying is attributed:  '...a Billion Dollars here, a Billion Dollars there and pretty soon you are talking about real Money!...'*

- Then, President Obama would sit in The White House and await for both Mr. Boehner, Mr. McConnell, Mr. Kantor and whoever else might be on their Side, to fold their Tent.

- A Re-Election Celebration Committee made up entirely of Volunteers should also be set up, should this Strategy be implemented.

Upon the Tent being duly folded, President Obama would request Congress to implement the following Legislation:

- Eliminate Social Security and Medicare Tax Ceilings which, have been drastically lowered while People collect Millions of Dollars in Bonuses, Tax Free, while at the same Time, People earning under $ 100.000,00 have no such Benefit and, the Medicare and Social Security Funds are underfunded.  See, Spinoza, Kant and Jefferson.  This would also be a good Time to ask Mr. Clinton to explain himself, not that it would do any good, why he proposed the intermingling of these Funds with the General Budget, thus showing a Surplus, whereas had this not been done, there would have been no Surplus and possibly, irresponsible Expenditures in subesequent Years could have been avoided.

- Propose a Value Added Tax of a Percentage to be determined, on all Luxury Goods Purchases over $100.000,00. 

- Tax Unearned Income at a Different, higher Rate than Earned Income, as it was done previously and as everyone prospered under the System, did not have to deal with Mortgage Derivatives, Countrywide Bank of America, AIG, Goldman Sachs nor all of the Goldman Sachs Employees who have infiltrated the Government and who do not give a Hoot about Thomas Jefferson, Immanuel Kant or Baruch Spinoza.  As far as they are concerned, who the Hell did Baruch Spinoza think he was, anyway?



____________

* The Quote is attributed to, although disputed as to its exact Form to Senator Everett McKinley Dirksen, Republican, Illinois, 1896 - 1969.

The Fundamentals of Voodoo Economics

The Financial Crisis continues to play out in Wisconsin and other Mid-Western States. The Standoff between Wisconsin Governor Scott Walker and the Teacher's Union continues with no End in Sight. In Ohio, Governor John Kasich is also preparing for Battle with the Public Sector Unions. Iowa and other States appear to be ready to follow suit in not too long a Time. In New Jersey, Governor Chris Christie has already implemented major Financial Changes and Reforms and now has his Hands full denying that he would consider a Presidential Bid. Governor Christie has not yet invoked the Statement made by General William Tecumseh Sherman well over a Century Ago, 'I will not accept if nominated and will not serve if elected,' but we shall see.

It must also be said that with non Higher Education Student Performance Levels in a Dismal State throughout the Nation (see, 'Universities' elsewhere in this Forum) Teacher Salaries and Benefits should come under Scrutiny. Many Surveys indicate that Public Sector Workers are not only paid better but also have infinitely better Job Security when compared to Private Sector Workers. This Fact corrupts the Standing of Public Sector Workers as 'Civil Servants,' i. e., performing out of Dedication rather than Financial Benefits and Gain.

However, the Argument that balancing State Budgets can be done simply by this, without imposing an additional Tax Burden on Higher Income Brackets or, indeed, as done by Governor Walker, cutting Higher Income Taxes, qualifies for what Two Decades earlier President George Herbert W. Bush described as 'Vodoo Economics.'

At the Federal Level, we see a Course not all that different. 'Tea Party-ers' and many Republicans in the House are clamoring for various Cuts, much of it directed at Federal 'Entitlement' Programs and, some, attempting to reduce waste. However, all this cutting, if combined with continued uncontrolled Expenditures in Afghanistan and Iraq is totally useless. The Federal Budget consists of 3 Major Line Items: Social Programs, Military Expenditures and Interest on the Federal Debt, which add up to about 90% of what the Federal Government spends. So, even if everything else were to be eliminated completely, which, realistically it cannot, that would only add up to 10%.

In this Context, the Republican Argument that the Federal Budget can be brought under control, with these enormous Burdens, while reducing Higher Income Personal Tax Levels is, again, nothing less than what President Bush described as 'Voodoo Economics.'

Where the Republican Counter Argument that cutting Higher Income Tax Brackets 'creates Jobs' has germinated from is, to this Writer, a Mystery. There is no Evidence to show that the Billions doled out to Banks and Financial Institutions, or the 'Quantitative Easing' Cash have created any significant Number of Jobs, actually, rather, the Contrary Argument seems to be more persuasive, that they have not. To use a Cliché, the Obscene Bonuses on Wall Street have not created any Jobs.

The Challenges to balancing the Federal Budget (and, by Implication, States need to follow a similar Course in their Affairs) are:

If the War in Afghanistan (or in Iraq, or anywhere else) is necessary, fund first, fight later. Do not do what President George W. Bush did, fight first and let somebody else worry about the Funding by kicking the Can forward.

If the Social Programs have merit, fund and do not divert Funds to other Expenditures, as it was done previously with Social Security.

To cover the Federal Debt Interest Payments, one of the largest Items in the Federal Budget, obtain Funding, not by increasing the Debt Ceiling and cutting Taxes which are Voodoo Economics at its most sublime, but by assuring a Progressive Level of Taxation which covers them and, at the same Time, pray and pray hard, that somehow Mr. Bernancke will be succesful in keeping the Interest Rates low because, if he fails doing that, the Interest Payment Portion of the Federal Budget would explode.

And the Fundamentals of Voodoo Economics would not apply, should that happen.