Nanny state mentality vs economic realities

Australia had a meeting of the health minds... and left to their own devices, they concocted a plan for their utopian future for Australians' future generations...

i.e...

1: anyone born after 2008 would be banned from buying cigarettes

2: junk food would be taxed

3: everyone in the nation would be mandated to take a fitness test by 2020

Health Minister Nicola Roxon said one idea put forward in a submission was an annual national fitness test where citizens would receive a financial incentive if they pass.

Health stream participants in the 2020 summit also discussed increasing public education about how death can be a "positive experience" to avoid patients panicking when they reach hospital emergency departments.

Health participant, Meredith Sheil, a former Westmead Children's Hospital pediatrician, said many participants had suggested a ban on cigarette sales by 2020.

"A lot of the health submissions suggested a ban on smoking by 2020," she said.

"You would say, 'OK, from now on everybody born after 2008, you are not allowed to sell cigarettes (to)'."

The brillant minds figured that they can make healthy food cheaper by taxing junk food. Might I point out that increasing one food substance over another with higher taxes is NOT not reducing prices of "healthy" food. It's just makes one yet more expensive. It's all relative by comparison.

But right when you think it can't get worse for intrustive Aussie government legislation, it does. They also talked of "sharing patient medical records nationally, to allow a hospital in a regional area to effectively treat an inner-city patient."

Uh... has anyone noted the increased hackers' abilities of late?? That's what we'd all like... putting a database of health records online to invite hackers. Uh huh...

So why would we care about what some nanny wackos in Australia think? Well, there's few socialists that have a lick of originality in their blood. So if one nation goes that route, another nation - most especially a generation of Obamabots - might also eye the same path. Needless to say, the American smoker has been a national pariah for some time now. And we're in the midst of an election where the leading DNC candidates are jumping all over themselves to promise universal health care. That funding has to come from somewhere.

But what about the economic realities of this utopian world of non-smokers?

In a simple word... disasterous. But only until they can find another group of Americans to transfer the tax loss to.

Let's start with just how much individual states rake in from those they so love to demonize. A quick glance at this Jan 2008 chart with the amount of tax cents PER PACK of cigarettes gives you a sober reality check. Mind you... this doesn't include the local county or city taxes that can also be added.

The 51st lowest (they count DC as an add'l district/state in the stats) is South Carolina at 7 cents per pack. They are followed by the lowest tax rate by Missouri and Mississippi at 17 and 18 cents per pack respectively. Kentucky and Virginia are tied at 30 cents a pack. Followed by Florida at 33.9 cents per pack. Seven states in all with 34 cents per pack or under in state taxes.

By contrast, the big three are New Jersey (257.5 cents per pack), Rhode island at 246 cents per pack, and Washington State with 202.5 cents per pack.

In all 51 state/DC districts, 25 have at least $1 per pack tax rates. Six more range between 80 to 99 cents per pack.

When you combine the highest state/local tax combination, look no further than Obama's home town, Chicago... a whopping $3.66 per pack total.

Facts are, according to Campaign for Tobacco Free Kids: via CNS News:

43 states and the District of Columbia have increased cigarette taxes since January 1, 2002, more than doubling the average state cigarette tax from 43.4 cents to $1.073 a pack

Yes folks... targeting the despicable smoker in the nation is big and easy business. No one cares if they raise taxes on smokers, save those low life smokers themselves. Afterall, they're subhumans that care little for their bodies.

The point? There's unbelievably big bucks in each state's budget that's absconded only from smokers. And if you eliminate them, just what do you think the state legislators are going to do? Cut back on their budgets?

If you do, there's most definitely a bridge to nowhere that's just awaiting your offer to purchase.

Fact is there's a rush by many states to fund socialized health care using tobacco funds. They increase the taxes per packs (even more than now), and put the extra cash against the state funds for the program. There's a similar analogy to high gas prices and taxes. But let's not confuse the issue on just who is actually raking in the cash on high fuel prices...

But back to tobacco. The devil in the details behind SCHIPs legislation had much to do with tobacco tax revenue. And according to the Heritage Foundation, states were facing a budget loss of at least $1 million annually, with 17 states facing over $10 mil in tax revenue. It was worse under the Senate version... $1.4 mil annually, with half the states losing over $10 mil annually. California, Ohio and Pennsylvania would lose over $50 mil.

Increasing the tax to support new and ever more expensive programs, combined with the peer pressure to stop smoking, is a recipe for economic disaster. One increases demands for revenue while the other results in less smokers to provide that newly needed revenue. So much for that socialized health program funding. Now where do they turn? DOH! There's no hiding from the money grubbing elected official.

But it doesn't end there. What about that dreaded "big tobacco" industry itself - almost as much a demon as "big oil" in today's society? Those tobacco companies not only employ 100s of thousands of Americans, but they also are frequently backers for state bonds. What happens to all those newly unemployed for a non-smoking world? Let's not forget the farmers now out of a marketable crop. Thus you will notice most of the low tax per pack states tend to be states that have vast tobacco farms.

Last but not least, what happens to the bonds when the sources backing them are no longer in business?

But let's not just stop there. How about our trade deficit? A real "hot button" in today's 2008 prez campaign.

According to a 1997 report from the Friends of Tobacco... a name I'm sure most will find not so endearing:

The output of cigarettes from U.S. factories was 725.6 billion. Of the total, 11.5 billion cigarettes were shipped to overseas forces, including Puerto Rico and other U.S. possessions and 220 billion to other countries.

From 1993 to the 1997 report, there was a $2.9 billion decline in tobacco purchases. We're already losing cash from the smoking subhuman.... how much more can we do without it affecting all the healthy denizens in their wallets?

Yet the US is only #2 in the tobacco producing world. The first? China, of course... producing 2.3 times more than the US. I doubt they will be prodded into feel good health legislation anytime soon.

Too few think of the repercussions of legislation on economics. And that includes those entrusted with writing and passing that legislation - Congress. They won't be reducing their spending any time soon - regardless of which side of the aisle they occupy. So when the money dries up, they merely look for new and more inventive ways to make up the difference on everyone.

The lesson to be learned is... love your fellow neighbor smoker. And don't forget to say thank you! He/she is keeping the US economic merry-go-round fueled, and keeping the taxes of the non-smoker low. The day you force them to adhere to your health standards is a day your pocketbook will rue forever.

Barney Frank on home ownership

Rep Barney Frank holds true to the general liberal mentality of "it ain't *my* fault". Rather than blame buyers who deliberately lie on loan applications, predatory lenders, lenders who practice mortgage fraud with deliberately deceptive loan practices, Frank believes that Wall Street and secondary mortgagors should assume some of the liability.

Not only that, those poor homeowners who defaulted were also "victims", per Frank.

Homeownership is a good thing and we should promote it when it makes sense,' Frank said. 'But not everybody can own a home ... One of the reasons we have the subprime crisis is because we pushed some people into homes.'

"Pushed" people into homes?? uh... try again, Barney.

It gets even better... in Subprime Lending Takes Center Stage on Wall Street appearing today on the Mortgage News Daily website, Frank clearly demonstrates what he knows about legal lending practices and the loan application process wouldn't fill a thimble.

In the regulatory area, House Financial Services Committee Chairman Barney Frank, D-Massachusetts, speaking before an international banking conference on Monday said that there should be a national law regarding subprime lending. Frank said the law should ensure that banks, "don't lend people more money than they can pay back."

Perhaps Mr. Frank should be educated to a few facts. The application process for loans is already filled with legal mandates and penalties for applicants who lie, and lending professionals who abet those lies. These mandates carry over to others in the process, including but not limited to real estate agents, and appraisers who help misrepresent not only the financial status of the applicants, but also the value of the property they are attempting to purchase.

Loan fraud has been on the rise for quite a while, and there are already laws in place to deal with such. However enforcement of loan fraud has been slower to step up to the plate.

The borrowers, of course, are not completely blameless. It is hard to believe that anyone in America today has not heard the old cliche about free lunches and you also have to know that greed played as large a role as naivete. But could the lenders pay better attention.

Bottom line, borrowers take the first line of responsibility for assuming payments on home loans. Purchasing a home is the quintessential American act of responsibility. And it does not take a rocket scientist to figure out if one can afford the monthly payment, property taxes, mortgage insurance and homeowners insurance. That data is all laid out in black and white before anyone signs on the dotted line.

Add to irresponsible (or mortgage scam artists) buyers the influx of inexperienced loan officers who flooded the industry during the boom over the last few years. Most of these positions are "commission only". No loan deals, no paycheck. Yet they, processors and underwriters are all also held liable for loan fraud.

Wall Street and secondary mortgage market purchasers should not be assuming the liability of deliberate mal'intent or inefficiently of the buyers and lenders original application errors.

To Market, to market..

For the past year, Democrats and the MSM Alliance have worked hard to shape-shift the facts of our stellar economy in the U.S.. Also, for the past year, GoldBugs have been out in force aligning with the shapeshifters. As a point of note, Ron Paul is for returning the economy to the gold standard. A major folly, IMHO.

That, aside. two recent events have occurred domestically:

1. Former FedChair Greenspan's assertion on Monday that "
a recession in the U.S. - a huge export market for Asian companies - was "possible" later this year, ...

2. coupled with a Snafu at Wallstreet's computers, all contributed to the hugest drop in the Dow since 2001.

Of more importance, are several other matters:

1. The ascendency of anti-business, American Democrats and the luddite wing of the economists and activists - the isolationists, the anti-free traders.

Seeking Cover to Cut-and-Run

If Biden wants a true comparison to Vietnam, it would not be terrorists overrunning the Green Zone but an Iranian tank brigade, after American troops have been withdrawn and Congress has placed a ban on air support for Baghdad's defenders. That seems to be where the left-wing of the Democratic Party is heading, embracing defeat on a grand scale in the Middle east as an earlier generation of Democrats had done in Southeast Asia.

Anyone recall what happened to the American economy during the angst-driven "withdrawal" from Vietnam? Yes, we do remember long gas lines.

2. Hugo Chavez' (Venezuela) orchestrated threats to bring down the American economy.

3. Yesterday, Prime Minister of China made this assertion:

China promises socialism for 100 years

China's prime minister promised to maintain "socialism for 100 years" yesterday as the Communist Party tried to play down media discussion of political reform.

"We must keep a firm grasp on the basic principles of the Party in the initial stage of socialism, without wavering, for 100 years," Wen Jiabao, said in an article reproduced in the People's Daily newspaper and other centrally-controlled state media.

Dampening hopes both of Chinese dissidents and of governments abroad that have called for faster political change, he said that while democracy was necessary it could only come about on the party's terms and when the socialist system was "mature".

Asian, European Markets Drop for Second Day

TOKYO -- Chinese stocks bounced back Wednesday after their biggest decline in a decade, but stock markets elsewhere in Asia and Europe fell for a second day amid investor jitters about possible slowdowns in the Chinese and U.S. economies

Looks like a dark, dark day, no? It isn't. There are many other markets around the world appreciating the devaluing of the American dollar which makes U.S. Exports far more affordable. :)

Stocks Poised to Open Higher After GDP Data; China Rebounds

Adding to a positive mood was a recovery by stocks in China where a sell-off had prompted a global rout in equity markets on Tuesday. The Shanghai Composite Index rose 4% on Wednesday, erasing nearly half of the previous day's losses.

"I think you have the first round of bottom fishing going on, and people will view this as an opportunity to buy some value stocks here," said Bill Schultz, who oversees $725 million in assets at McQueen Ball and Associates in Bethlehem, Pennsylvania.

"We've come from a period where there was a little complacency and not much volatility, then all of a sudden you had this news coming from China....It was a shock to the system and now we have to decide how to go forward."

Federal Reserve Board Chairman Ben Bernanke is testifying before Congress today. Bernanke, whose comments will come after his predecessor, Alan Greenspan, warned of the possibility of a recession in 2007, will be watched closely for any indication that the Fed may change its stance on interest rates. Bernanke is due to speak at 10 am New York time.

Some days, it just doesn't get better than this. :)

Economics can be persuaded and effected by emotionalism, but ultimately, reality sears through the clammy fog.