CHALLENGE
THE PREMISE

Newsmakers

ARCHIVE - APRIL 2015

Issues, News & Views

Who will be the
2016 candidates
for President of
the United States?


Republicans


SCOTT WALKER!

Walker has broad appeal to
GOP constituencies and is a
proven winner. Look for him
to select New Mexico
Governor Susanna Marinez
as his running mate.



Who, from among this
strong, diverse field , will
emerge victorious to return
the GOP to the White
House?

COMPETITORS
The road to the White House
leads past the Governor's
mansion. Marco Rubio, Rand
Paul and Ted Cruz need to
go back to their state capitals
and fill out their resumes.
Among governors, Jeb Bush
and Rick Perry are stale, and
worse, remind people of
GWB 43. John Kasich is
unappealing to the base.
Mike Pence is an intriguing
alternative to Walker; the
other Mike (Huckabee) is
NOT!

Democrats


ANDREW CUOMO!????

Look for Hillary to drop out
and open the way for Bill
Clinton's HUD Secretary.
Cuomo, also Cinton's
neighbor in Westchester
County, finished his 2014
re-election with $8.8 million
in the bank, and would have
no problem raising much,
much more. Look for him to
pick MA Senator Elizabeth
Warren - or even Hillary
Clinton! - as his running
mate.



Is Hillary a foregone
conclusion, or will
someone else swoop in and
steal the show?


COMPETITORS
A Clinton run is a 50/50
proposition at best, given
her failures as First Lady
(HIllaryCare) and SecState
(Reset). In the meantime the
prospect keeps her speaking
fees in the stratosphere, and
keeps a path open for the
Clinton's hand-picked
designee: Cuomo. Warren is
an instant contender if she
jumps in. Everyone else is an
also-ran at this point. Webb
is an interesting Presidential
candidate, but a non-starter
in the Primaries: this is the
extreme left Democratic
Party of Sanders and
Warren.

DOWNTON ABBEY IS A TV SHOW. THIS IS AMERICA

2015/04/24 - Recently there have been rumblings from The Right about eliminating the federal estate tax, a tax they like to disparage as "The Death Tax". This week the House passed H. R. 1105 to repeal that tax, by a score of 240-179, mostly along party lines. But is repealing the "Death Tax" really such a great idea?

Chalprem supports smaller government and lower taxes, and so, on a superficial level, we would support the elimination, or at least reduction, of any tax you might care to mention. But, of course we do need some measure of government, and unless we are willing to take on debt (NO!), then taxes we must have.

So the real question is how to best structure the government's revenue needs. It is foolish to look at a single tax in isolation and ask if we would like to get rid of it: of course we would! But it is necessary to look at the big picture, and make reasoned determinations about what will be cost of the government that we will most likely have - as opposed to the government that we would like to have - and not make impulsive decisions about what's the worst way to not fund it.

If Boehner & Co. are going to dangle a shiny object like a tax elimination in front of us, then the House leadership also needs to explain how they will match that with proportional spending cuts, or counter it with other revenue increases. Otherwise we just add to the national debt.

America is what we at Chalprem like to call "The Earnership Society". We get what we earn. We keep what we earn. Want something? Earn it. Such an ethos builds character in the individual, and builds character in the nation.

Unfortunately too many people on both The Right and The Left seem to think individuals should get a free ride on the hard work of others. For The Left, the freebies come on the hard work of strangers in a different place, and for The Right, the freebies come on the hard work of relatives in a different time. But it's all the same, folks are getting free stuff that they themselves did not earn.

America is not an aristocracy, we are not Downton Abbey. We don't live off of what others have earned. We support economic mobility, but mobility is a two-way street. Every person, from all walks of life, should have the freedom to find their own way, to both prosper and to fail. They should have the freedom to move up, and with it, the freedom to move down. You get what you earn. It is the only public policy position that can endure.

Of course the estate tax should not be confiscatory. The idea is most certainly not to make anyone poor, that does no good to the individual, and is counterproductive to society. There should be generous exemptions at lower levels to ensure people can continue to grow small businesses and enjoy existing lifestyles. But it's annoying to hear the "middle class" card played when businesses grow to 8-digit and 9-digit valuations - shouldn't those businesses have invested in the creation of a succession plan? And why is it the problem of other taxpayers if they chose not to?

Further, the tax code could delay collection of the taxes, eliminate penalties, and charge only interest on the tax at a slow but accelerating rate, to give the heirs time to fund the tax payment in an optimal fashion. For example, unpaid estate taxes could be charged 2% interest the year after death, 4% for the second year, and growing by 2% per year indefinitely. But that's generous, after all, why should other taxpayers bear the cost of the failure of the family to prepare, to plan, and to buy insurance? Why did they not stand up and take responsibility?

And there should be accommodations for real, genuine, revenue-generating, food-producing family farms engaged in legitimate agriculture. But not for fake phony fraud farms like the tax-shelter horse hotels created by scheming malevolent tax lawyers.

Chalprem believes in eliminating corporate income taxes, and lower, flatter individual income taxes. Letting people who earn the money, keep the money. But after they die the bill comes due. We feel no guilt about We The People claiming our share from the aristocracy once every generation. And we preserve freedom for the heirs, the next generation, to begin the cycle anew.

Government needs to get its revenue from somewhere. No tax is of itself desirable, but the Estate Tax is less worse than most others. It could use a few fixes, but is conceptually sound. Sorry, we are with the Democrats on this one. John Boehner gets a thumbs-down. Again.



PUBLIC POLICY PRIORITY: EMPOWER PARENTS

2015/04/10 - Americans are inundated with statistics every day. Some are amusing, others are at least a bit disconcerting. But among the statistics that are the most troublesome, one stands out among the most disturbing of all: illegitimacy, the out-of-wedlock, or extra-marital, child birth (XMCB) rate.

We are not judging, we are not casting stones; rather, we are trying to raise awareness of a serious societal issue, and the public policy implications. The fact is that there is a distinct causal relationship between illegitimacy and poverty, and this has negative implications beginning with the individuals but reverberating throughout society. Single-parent households trend toward raising children who fail to meet educational testing standards, and this leads to non-employability, despair, violence, crime, and ultimately incarceration.

Worse, extra-marital child birth instigates a downward spiral that feeds upon itself and perpetuates from generation to generation. Children from single-parent households themselves tend to have children out-of-wedlock, children who are born into the same circumstances that their parents came from - a culture of poverty and reliance, rather than efficacy and self-sufficiency.

The implications for society are immense. When people are furnished with the ability to work their way out of poverty, they become contributors to their community - we gain a person paying taxes, plus, it's one less person requiring assistance, so it is a double win. Employed people trend away from violence thus reducing our costs of police, courts and prisons. Crimes that are not committed, do not have victims, and our communities become safer.

It would seem axiomatic that public policy should be aimed at strengthening the traditional family structure, and more fundamentally, at strengthening the parental bond to ensure children are raised in stable, dual-parent households.

Unfortunately public policy has not had the objective of reinforcing the dual-parent family structure, with the result that we have achieved retrograde outcomes. Since President Johnson launched the War on Poverty in 1965 - yes, this is the 50th anniversary - the illegitimacy rate in African American households has tripled! from 24% to 72%.

You might think that the 1965 African-American illegitimacy rate of 24% might be higher than desirable, but even among whites today the corresponding figure is 29%, and among Asians it is 17%. If we had implemented better policies 50 years ago that bolstered the African-American family, blacks might have employment, income and education outcomes today that match whites and Asians; instead, Johnson's policies have decimated the very communities he intended to help.

We have little but damage - real human hurt - to show for the trillions of dollars wasted on Johnson's well-intended but ill-conceived ideas. Is it time for something new, or are we stuck on stupid? Is fifty years of waste and failure enough, or do we desire to waste and fail even more?

A year or so ago Senators Mike Lee and Marco Rubio released a tax reform proposal that we generally approved of, but we also had a some reservations. One of those reservations requires additional consideration in a context broader than just tax reform.

The Lee-Rubio proposal includes proposals with the laudable goal of strengthening America's families. In some ways the plan goes too far, and in other ways not far enough. It is true that strong families are the foundation of a strong America, but at the core of a strong family is a married cohabitating couple. We believe that the focus should be on the couple, not the children.

The tax code contains a "marriage penalty" which Lee-Rubio eliminates, but we believe their plan does not go far enough. It should go further, to not merely eliminate the marriage penalty, but to reverse it and create a "marriage premium", one that helps most those who need it most, the poor. Instead of the material inducement that presently exists to keep parents apart, we must institute a material inducement for parents to unite both legally and practically. That inducement would be in the form of a substantial refundable tax credit available to those who married or remained married in a year but not if they separated or divorced.

Where we believe Lee-Rubio goes too far is with respect to the various child tax credits. The current system has several schemes already, and Lee-Rubio runs against the spirit of tax reform - smaller and simpler - by adding yet another. We generally believe that family assistance should be directed at the parents rather than at the children. The tax code should put the parents in the best position possible, and then should stand back and stay out of such family-planning decisions. Simplifying, reducing and consolidating the child tax credits would help.

Financial problems are at the root of many marriage failures, and a marriage premium could alleviate some of those problems. Better yet a marriage premium attacks the vicious cycle of poverty at multiple pressure points. If single-parenting leads to poverty and further breakdowns, then the Marriage Premium that we propose does the opposite: it would address both the illegitimacy and the poverty nodes of societal breakdown simultaneously.

Unfortunately the rate of children being born out of wedlock continues to rise, with negative consequences for individuals, families, communities and America. We don't pretend that the Marriage Premium is a panacea for all societal ills, but it is a step in the right direction. Let's start with the Lee-Rubio tax reform plan to get rid of the Marriage Penalty, modify Lee-Rubio to add a Marriage Premium, and continue to focus public policy priorities on parental power. Strong parents yield strong families that build personal self-sufficiency and reduce government-dependency. That is what we want, right?



Analysis


April 30, 2015 - Reflections on Baltimore. And Ferguson. And 50 years of the War on Poverty.

Unemployment: Caused by two factors: lack of jobs, and lack of employability. Not much a person can do about the former, but the latter...?

Employability: Why would an employer want to hire someone who dropped out of school, and is not proficient in reading, writing, arithmetic, or even speaking?

Education: School choice. Competition always delivers better outcomes for lower costs. Kids might be less inclined to drop out of school if their schools were better. School choice => improved employability.

Violence: How does committing acts of malevolence improve one's employability? Why would a Mayor give "space" for such destruction?

Why would someone invest in job creation in Baltimore? Hand-outs to keep people alive, and hand-outs to convince businesses to create jobs. Hand-out city. Epic fail.

Why are liberals demanding even more of the approach that is failing so miserably? Have we set the bar so low we can't recognize failure when we see it?




April 23, 2015 - Say what you want about Obama, but no one on the right accuses him or any of his people of trying to make personal financial gain out of their power position. It's not their schtick. Obama and his minions have plenty of flaws, deep flaws, but greed does not seem to among them.

And then there is Clinton Inc. - greed is definitely a Clinton flaw. We have previously
commented on their lu$t for money. Now the left is piling on because there is so much "there" there. The Clintons are unavoidably, undeniably corrupt. They just are. Monetizing public office is exactly their schtick. It's what they do. They're good at it. They cannot help themselves.

The New York Times (not noted as a member of "the vast right-wing conspiracy") accuses The Clintons of selling out America's strategic uranium reserves in exchange for contributions (read, "bribes") to their family foundation. Read the story, the facts will make you ill.

The Clintons are an offence to the American sense of decency. You should be offended by The Clintons; if not, please ask yourself why not.



April 13, 2015 - Well, she did it. Hillary Clinton has announced her campaign for the White House. Ho hum... website, YouTube video, and a Facebook page - excited yet?

How different it was back in 2004. Barack Obama seemed like a man of destiny from the moment he lit up the DNC convention. But Hillary's campaign has no such buzz, no magic. It's flat, no one cares. She is a product of the beltway, a "Made-In-DC" candidate the rest of the country will not get excited about.

Democrats will rue this day - this time they will get bit by their identity politics. Just because Hillary Clinton is a woman does not make her a compelling candidate. By this time next year, Democrat insiders will realize she just isn't very good, that they no longer have any feasible alternatives, and that they are headed straight for electoral disaster.



April 09, 2015 - What's up over at the Treasury Department?

We all know the debt is skyrocketing - everyone, that is, except Treasury - they have had the number stuck at $18.152 T for three weeks now.

Doesn't Treasury realize that when they play games with the debt number, it forces us to continuously reset our
debt clock?

But let's not kid ourselves - debt can and does crush nations. Our federal debt is larger than our GDP, never mind the debt piled on at the state and municipal level. When will we get serious about cutting the size and cost of government?

A nuclear Mideast, and $8 Trillion of additional federal debt, will be Obama's legacy. Enemies foreign and domestic.



April 02, 2015 - Happy Passover and Easter.

We hope you enjoy your Good Friday as you digest the devastating news that the Obama Administration has capitulated to a nuclear cave-in to the extreme terrorist regime running Iran.

Of course Iran's neighbors, many of them wealthy and dutifully hostile to the world's #1 exporter of terror, will respond by pouring resources into an all-out regional nuclear arms race.

There is no way this can end well, and it will be Obama's legacy.


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