"Temporary" Tax Increases Never Are

Does anyone ever believe a democrat when they ask for "temporary" tax increases?  And it's always democrats who promise they are temporary and then ask to "extend" (and extend) or just make permanent.  The three listed here were put in as "temporary" measures by the California legislature

• Extend a 0.25 percent income tax increase by two years (DM: Ha!  Just make it permanent now). The move would raise $1 billion in the next fiscal year.


• Extend the reduced dependent care credit from $309 to $99 for another two years, generating $430 million in the next fiscal year. (DM: Stick it to the parents some more, dems)

• Extend the increase in the vehicle license fee for two more years (DM: Two years is just enough time for the average voter to forget the tax increase was "temporary"), and raise it again (DM: Except for illegals in unregistered vehicles who don't carry insurance), bringing the total to 1.45 percent of a vehicle's value, generating an extra $1.2 billion in the next fiscal year.

I am sure with all these measures California will bring its fiscal house in order...

Uh Oh. Another "Unexpectedly"

U.S. Jobless Claims Surge

In a troubling sign for the U.S. labor market, the number of workers filing new claims for unemployment benefits unexpectedly surged by 25,000 to 471,000 last week to wipe out most of the recent declines

Note to the MSM: all is not well.  Unemployment is still near 10%, mortgage applications are plummeting with the expiration of the tax credit, mortgage delinquencies are rising.  In the mean time the government is on an anti-business crusade demonizing anything and anyone who makes money (and these are the folks who employ people).
 
In the mean time we are watching a realtime melt-down of the Euro, with money outflows from Germany accelerating now with the new trading rules being put in place (which will decrease liquidity). Additional outflows are expected out of the Continent if the rules go pan-European.  Once the Euro crashes and burns, along with some of the European capitals, it might be a good time to take a cheap vacation there later this summer - if anything is functioning.

There's Enough "Money" But Not Enough "Wealth"

The European bailout. TARP. GM. Fannie May. The list goes on and on. The basic premise in all these deals is that something was "too important" to the economic system and had to be bailed out by the government or the central bank.

In all these cases the bottom line was the money was simply created for the bailout. Poof. There was nothing behind these dollars or Euros being created. The U.S. government simply borrowed more, the Fed simply printed more.

So while all this created money did save these various institutions, the question is if there is enough wealth in the world to eventually pay off all these debts. There isn't. The world is not going to "grow" or "tax" or "save" its way out of this problem. And like Greece, countries and states will keep on borrowing and spending beyond their means since they know they will be bailed out in the end.

There is a fixed (but slowly growing) amount of "wealth" in this world that is being represented by a rapidly growing amount of "money". The denominator is growing much more rapidly than the numerator, so this means the value of "money" is simply getting smaller and smaller and smaller.

Inflation is already locked in. Are you smart enough to see it?

Collided Airlines?

With the merger of Continental and United, there is speculation on how the two names could be combined for the new airline.  I think Collided might not pass marketing tests.  Uconned might appeal to consumers who are are starting to pay for carry-on luggage.  And I doubt it will be good enough to be called Contented.

Beware Chinese Easter Eggs

In other words, hidden traps or software in the networking equipment they sell.  India finally figured it out:

The Financial Times reported yesterday that the country’s Telecommunications Department informed the office of Prime Minister Manmohan Singh that requests for importing Chinese manufactured hardware where being turned down on security grounds.

Essentially if you buy Chinese networking equipment, you just invited the Chinese gonvernment into your computer system.  India has figured it out, so it will be interesting to see if anyone else does.