Tag Archives: Michael Bromwich

Oct 29 2021

First Estimate of Third Quarter GDP Reflects Massive Drop in U.S. Economy, Digging Through The Details


Posted originally on the conservative tree house on October 28, 2021 | Sundance | 214 Comments

The Bureau of Economic Analysis (BEA) has released the first estimate of Gross Domestic Product (GDP) for the third quarter (July, Aug, Sept). [DATA HERE]  The top line number of two percent GDP growth is significantly worse than most economists and financial pundits expected.

The second quarter GDP was 6.7%, so a slow down to 2% is very significant considering the economy should be rebounding and reopening after the COVID-19 impacts.  However, when we dig into the details [Table One] you will see how what is happening in your life is actually reflected in the data.   None of this should be a surprise, as the data is simply reflecting what is happening in your personal checkbook economics.

First, here’s the media jaw agape, with false explanations and justifications:

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The drop has nothing to do with the ‘delta variant’, and everything -EVERYTHING- to do with inflation and impacts from Joe Biden’s economic policies.

Let’s take a look at the details, and you will see how the national GDP is simply a reflection on what we are doing to survive the Biden economy.

GDP growth is the measure of what is happening inside the U.S. economy.  GDP reflects the value of goods and services produced in the U.S. minus the value of goods and services we import from outside the U.S.

Consumer spending represents two-thirds of our overall U.S. economy.  When Americans stop buying stuff, our GDP drops.

A few things to remember about the value of goods and services.  Inventories are an asset, increases in the inventories of goods we produce is a positive driver of GDP.  Those inventories become sales, and those sales are also calculated in the value of goods we build, like houses.  Considering how much housing values have increased; and considering how much more value that should add to the GDP overall; when the economy “decelerates”, as housing values increase, that tells you something is profoundly askew.

Consumer spending represents two-thirds of our overall GDP growth.  Now take a look at the data in Table-1

Notice what is highlighted?   Massive drops in consumer purchases of Goods (-9.2%), specifically in consumer spending for ‘Durable goods’ -26.2%

That statistic should not come as a surprise to those CTH readers who have followed along in the past few months.  That statistic is simply a reflection of what we are doing.  We are paying so much more for energy, gasoline, fuel, housing and food (all driven by inflation), that we are not spending on durable goods like cars, trucks, or long term appliances, electronics or other non-essential items.

-26.2% in one quarter is a massive contraction in the purchasing of durable goods.  However, it should not be a surprise.  Overall inflation increased 5.4% in the third quarter as measured within this first estimate analysis of GDP.   However, inflation on food and gasoline was more than four to eight times higher, respectively, than overall inflation.  As a result, disposable income has collapsed:

“Disposable personal income decreased $29.4 billion, or 0.7 percent, in the third quarter”, according to the top line first analysis.  However, again this is a preliminary estimation and reflects a very skewed data point.  With inflation on essential items running much higher than wage growth, the -0.7 percent first estimate for personal income is profoundly generous to  the Biden administration.  We can expect the second estimate in late November -with more complete details-  to be a significant downward revision because disposable incomes have dropped much more than -0.7%.

Purchases for durable goods do not drop by 26% with only 0.7% drops in income.   Look at your own checkbook economics.  All of us blue-collar and working class folks are hunkering down and prioritizing food, fuel and home heating costs.  We are not out buying new stuff.

Private residential sales are down 7.7% in the July, August, Sept, period according to the BEA data.   Remember when CTH said at a macro level housing prices peaked in the last two weeks of May and first two weeks of June?  There’s another supportive data-point.

Yes, there are regional impacts from relocation that are driving home values up in key regions like Florida and some suburban neighborhoods as people flee the crazy.  However, overall home values have peaked, and only institutional investors (not families) are purchasing them now.  Those institutional investors are buying property because they need tangible assets…. because their paper assets are extremely vulnerable.   Vanguard and Blackrock purchasing houses gives them a tangible asset they can then leverage for pennies on the dollar for more low interest loans from the fed.   Those houses are then turned into rental incomes feeding the mothership.

Lastly, exports should be a benefit to GDP, but as you can see in Table-1 exports are -2.5%, we are exporting less value in part because the value of our currency has dropped so dramatically.

The bottom line is this.  The first estimate of Q3 GDP growth is merely a reflection of what you know is happening in your life and around your neighborhood.  The next revision to this data (late November) will be lower than the first estimate because you can see the first estimate has not yet caught up to the current status as it existed in September.

Oct 28 2021

Snap Crackle and Pop


A Prophecy for the Future

The gnomes of Snap Crackle, and Pop have new meaning in the 21st century, a far cry from their inception, but perhaps more momentous.

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By Tabitha Korol

            Who could have imagined in 1933, when The Kellogg Company invented the advertising gnomes, SNAP, CRACKLE, and POP for its Rice Krispies cereal, that the words would be prescient for the early 21st century? Kellogg’s words merely evoked the sounds of the product’s bursting in milk, but today they could be applied to no less a calamity than the demise of Western culture. 

SNAP – The sudden sound of a break

            1933was our worst depression year.  We had prohibition, bootlegging, speakeasies, and people travelling roads and rails in search of work, as in  Steinbeck’s world Of Mice and Men.  The 21st Amendment to our Constitution was ratified to return to the States the power to regulate the sales of alcohol and restore freedom of choice to the public.  By 1938, Winston Churchill was calling upon the US to prepare for armed resistance against Adolph Hitler, although our majority preferred neutrality.  We supported the British Commonwealth and officially entered the war in 1941, following the Japanese attack on Pearl Harbor.  In ‘42, the World War became official.  Our citizens mobilized for the war effort, and we were a nation united in common cause.  In the same year The Declaration of the United Nations was signed by 26 nations.

          Our entry into WW II caused vast changes in every aspect of American life.  Men and women joined our military services and labor force, and by war’s end, we were in better economic condition than any other country in the world.  We became affluent, veterans were attending college on the GI Bill of Rights, and people were marrying and growing families. We were a strong, happy, powerful and culturally-unified country, overwhelmingly good and generous, with a center-right middle class that was proud to have helped win the war against the world’s evil despots.  But, as author David Kupelian explained in his book,  The Snapping of the American Mind, something happened.

            By the time our troops returned home from fighting communism in Vietnam, they discovered that the enemy ideology was entrenched in our own society.  The Marxists of the Frankfurt School were busy making the “long march through our institutions,” establishing their pernicious Critical Theory that has since spawned the Critical Race Theory.  Our children were being taught to rebel against God, the Ten Commandments, the Constitution of the United States, and our Judeo-Christian principles, while also sanctioning murder, theft, adultery, sex outside of marriage, and the equity of social justice.

            They penetrated our society through media, Hollywood, churches, and corporations, to destroy American exceptionalism, our history, progress, and universal moral values that unified us and made us great.  Sixty-nine million Americans were driven to elect a black President Obama, despite his diehard Marxist goals, to prove we were not racist, and communism surreptitiously permeated the next generation.  The lies and accusations used against President Trump were their way of demeaning him in the eyes of the public; the left had no agenda to otherwise woo the voters.   

CRACKLE –  Shatter, to become covered with a network of fine cracks

            We have been cracking apart into conflicting tribes defined by skin color, sexuality, financial success, religion, fear, and envy.  Half our population is deranged with a philosophy that has turned them against our laws, our civilization, how we identify ourselves, and in denial that we had formed for ourselves a great and welcoming nation.  We now have a generation that has no regard for morals or virtue, for truth or our historical memory, for behavioral boundaries or, in fact, for the physical boundaries that define our nation’s sovereignty. 

            The ultimate goal  of Communism is to build a society that owes allegiance to the State above all else – above the love of God and family.  The goal will be achieved when people even forget that a demolition once occurred.

          Our language is under attack because corrupt words produce corrupt thinking.  Some words are outright banned; others redefined, suppressed, and replaced by inconceivable concepts and euphemisms for public acceptance.  Our children are victims of leftist ideologists, immersed in bigotry and sexuality (Critical Race Theory), which are known to cause irreparable emotional damage while our government calls the dedicated parents “extremists,” and allows jihadis and criminals to enter and vanish. 

          People across the globe are driven to worry and submission to the regime.  Gratitude has made way to demands for entitlements, tolerance for demands by the intolerant.  Rights are demanded, responsibilities scorned.  Freedom of speech has been quashed; racism and hate have become respectable.  The fearful and foolish have allowed themselves to be hoodwinked, robbed of their faith and Constitution, and controlled by debilitating dread, depression, addictions and suicide.

          Our people have been threatened and paralyzed by the fear of a viral illness created in Wuhan, China, with significant American collaboration and money.  Young and old were intimidated into self-imprisonment; to wear masks that inhibited their necessary oxygen intake and communication; to accepting injections whose substances and metallic parasites were considered “trade secrets.”   Although physicians and scientists declared Ivermectin and Hydroxychloroquine (HCQ) to be FDA-approved and perfectly safe as prophylaxis and cures, they were denounced and prohibited by the media, pharmacological corporations, and hospitals for reasons of financial profit. Those who resist the procedures are denounced, fired from their jobs, restricted from certain establishments, penalized, treated as pariahs – our modern-day lepers – and our formerly benign society becomes malignant.

POP –  The sound of explosion, the flashpoint, zero hour.  The components for us today:

            The Wuhan virus and the pursuit of control through obligatory international “immunization.”  The innocuous-sounding “gain of function,” which is nothing less than the biological research aimed at increasing the virulence and lethality of pathogens and viruses, and the suppression of  adverse reaction reports.  Students and the military being coerced to accept the vaccinations  – “medical rape.”   

            Repeated lockdowns and restrictions that led to Illness and death, businesses closed and farming communities nearing extinction due to globalization and substantial welfare checks that discourage a returning workforce; political polarization; corporate farming with technology; financial struggles and alarming suicide rates, with the greatest increase being within the 15-24 age bracket, anonymous victims of the Wuhan virus.

            Phasing out our fossil fuels has endangered our oil industry and sent gas prices through the roof.   Biden wants trains to replace automobiles.

            Overt destabilization of our economy and an increase in overall control by the elite for the purpose of permanently destroying our free and thriving capitalist republic for communist and Islamist tyranny.

            Two million migrants  predicted toinvade the US this year alone.

            A stolen electionand representation in government.

            The individual’s dignity and rights guaranteed by the Ten Commandments and our Bill of Rights stolen.

            Leftist propaganda turning minds of children away from family, morality and country, despite parental objection; a severe increase in crime.  Schools to introduce pre-K classes for earlier child control.    

            Minds and bodies attacked as the schools encourage gender dysphoria, homosexuality – even transgenderism – again defying the parents.

de-Pop  – depopulation, reduction or expulsion of inhabitants

            Kellogg’s imps are, of course, coincidental, but the Kellogg Corporation, wittingly or not, is encouraging America’s destruction with its new spiritual warfare against our children.  Their new cereal boxes are promoting and supporting LGBTQs, suggesting children create new pronouns, thereby underscoring the perversions of the leftist classrooms, the waning normalcy of their parents’ and grandparents’ generations, and actual physical harm to children’s privacy and bodies.  The demands for these new human rights of requiring that people accept untruths for reality, lying about what we see, come at the expense of others’ human rights.     

            Consider how our world has been changing and Kellogg’s has entered into the arena, pandering to the woke communities, even at its own expense.  Granted, slipping sales are seen in other packaged food companies as well, but it appears that the company is inflicting harm upon itself.  By devaluing family life and emphasizing the deviations from our moral society, it is destroying our children, its biggest customer base. Kellogg’s joins the insanity of the globalists’ dream of depopulation. 

Please share if you care

By Tabitha Korol

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Oct 28 2021

Fed Chairman Jerome Powell Loses the Trust of the American People


Armstrong Economics Blog/Ethics Re-Posted Oct 28, 2021 by Martin Armstrong

Federal Reserve Chairman Jerome Powell was caught in a lie that may cost him re-election in 2022. The Federal Reserve Chairman, the man with the most insight into future US market policy, sold between $1 million and $5 million from his personal account on October 1, 2020. Not so coincidentally, the Dow decreased by around 6% that month before rebounding, and Wall Street saw its worst month since March 2020. Then, in September 2021, Powell ordered an ethics committee to investigate potential insider trading among central bank members, which he deemed necessary “because the trust of the American people is essential for the Federal Reserve to effectively carry out our important mission.”

However, when we look at these transactions, they do not appear to be inside trading. Had Powell sold ahead of the COVID Crash Jan-Feb 2020, then there would be a question of inside trading, but then again nobody bothers to investigate Bill Gates for his sales ahead of the COVID Crash he was cheering so much. After reviewing the trades, I would not raise any concerns.  BTW, I was asked to review the Cattle trades of Hillary Clinton which were, in my opinion, a pay-off by putting the losses in one account at the REVCO and the wins into hers all when she was in a meeting and never traded futures before.

Boston Fed President Eric Rosengren had traded real estate investment trusts that owned the same mortgage-backed bonds that the central bank was purchasing. Dallas Fed President Robert Kaplan earned over $1 million last year trading individual, COVID-sensitive equities such as Amazon, Chevron, and Delta Air Lines. Both men abruptly stepped down from their positions shortly after the information came to light. They declared innocence, with Rosengren citing an early retirement due to health reasons and Kaplan seeking to avoid conflict. “The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy. Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work,” Kaplan stated at the end of September 2021.

Powell claimed he had no personal knowledge of any insider trader and suggested a revision to the Reserve Bank Code of Conduct. Meanwhile, records show that Powell called Treasury Secretary Steven Mnuchin multiple times on the same day he sold off his equities. Former President Trump met with Mnuchin that day and later tweeted: “Immediately after I win, we will pass a major stimulus bill.” The Dow, which was up 200 points in late-day trading, suddenly dropped 376 points after the tweet was published. Five days later, Powell was urging for additional stimulus and warned of “tragic” consequences. “The expansion is still far from complete … Too little support would lead to a weak recovery, creating unnecessary hardship,” Powell stated. Did he know what was to come in the following weeks?

Fed officials are not permitted to purchase or sell securities during “blackout periods,” which begin the second Saturday of the month before a Federal Open Market Committee (FOMC) meeting and end the following Thursday. Although Powell did not trade during this blackout period, his October 1 sell-off occurred before the Fed’s minutes report was released. “The problem is that the rules and the practices and the disclosure needs to be improved and that’s what we’re working on,” Chairman Powell stated. Are the rules the real problem here? Powell is allegedly worth between $20 million and $55 million. He and other Fed members have every motive to use their inside knowledge for profit. The people in charge of creating future monetary guidelines could alter policies to fit their trading strategies and line their pockets. Most were confident that Biden would reappoint Powell next year, but that option is off the table if he loses the “trust of the American people.”

Oct 28 2021

The Big Picture in 19 Minutes


Posted originally on the conservative house October 28, 2021 | Sundance | 37 Comments

In his lengthy opening on Fox News Wednesday night, Tucker Carlson outlined the big picture in 19 minutes.  Carlson does a good job of weaving the disparate elements into a very visible picture.

This is a good encapsulation of how the Biden administration’s agenda creates a cause and effect cycle that’s completely disconnected from the priorities of the American middle class.  WATCH:

Oct 28 2021

Truckers Wanted


Armstrong Economics Blog/North America Re-Posted Oct 28, 2021 by Martin Armstrong

It seems that the state of Florida is doing more to address the supply chain crisis than the entire Biden Administration. The American Trucking Association reported that their industry now has a record shortage of 80,000 drivers. Truck drivers are essential to maintaining a steady supply chain, and despite the climate change narrative, fewer trucks on the road mean that businesses cannot be supplied with the essentials they need. Distributors in Florida are now offering salaries of up to $110,000 a year with sign-on bonuses as high as $15,000. Even referral bonuses have been going for between $3,000 to $5,000. The plan to attract workers comes shortly after the state announced that their ports are open for business.

Nearly half of America’s small businesses are feeling the effects of the supply chain crisis. Ships have been forced to turn around from ports, rerouting back to Asia, as there have not been enough workers to transport products. The trucking industry has been warning that Biden’s policies would lead to disaster. “I’m pretty discouraged. I don’t know how anybody can think an anti-capitalist agenda can be good for transportation,” David Owen, president of the National Association of Small Trucking Companies (NASTC) told Transportation Nation Network (TNN) in January. The entire trucking industry has been hesitant since Biden stepped into office, and with good reason.

The Democrat-controlled House voted to raise the motor carriers’ liability insurance minimum requirement from $750,000 to $2 million, eliminating competition for larger trucking companies. Biden’s climate change agenda resulted in the Keystone Pipeline XL cancelation. His plans to reduce carbon emissions producers and fracking also resulted in higher prices at the pump. Ending the supply bottlenecks requires the US to put more trucks on the road, and truckers should be treated with dignity rather than criminals who are destroying the climate.

Oct 28 2021

Have Some Democrats Lost their Mind?


Armstrong Economics Blog/Politics Re-Posted Oct 28, 2021 by Martin Armstrong

Reliable sources have for months been warning that the extreme Democrats have been planning to impose mandatory vaccines to screw Independent and Republicans for this has nothing to do with health anymore. The conservative Democrats are worried and they have been standing their ground, thank God, forcing Biden’s $3.5 trillion plan down to $1.5 trillion so far. They are gutting the Biden program for as I have been told, we use to pledge alliance to the flag in grade school, and the words “liberty and justice for all” still ring in the ears of some.

Now I can safely say that the rumors I have been hearing are true. Governor Murphy’s staff in New Jersey has been caught on tape saying that after the election next week, he will wage war on Independents and Republicans making it law that everyone must be MANDATED for a vaccine. That will be down to 5 year-olds following New York. The exact quote he does not want to hear it’s “my rights, my s-t.” The courts have torn up the Constitution for the NY Supreme Court told the cops, no vaccine no pay since they were mandated with no exceptions be it medical or religious. They cannot test cops for weed or drugs, only COVID.

What the rumor is that after the Democrats devastate the Republicans in the 2022 election, then Biden will MANDATE vaccines, but also impose a tax per mile you drive a non-electric car. I really do not understand such hatred and the refusal to simply rule fairly. They are pushing hard and that push is coming from the World Economic Forum with funding from both Big Pharm and Big Tech all pushing to annihilate Republicans and Independents. The United States I grew up in no longer exists. It is being directed from Geneva.

I was really praying these were rumors, but it is clearly a political move. They want good Nazis who just follow orders without question. These are no normal vaccines with a sample of the virus. So they fade quickly requiring boosters for the rest of your life annually or every 8 months.

According to their overlord, Klaus Schwab,  anxiety is building over the world’s social and economic prospects. The solution, Schwab maintains, insists that “the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts, or a great reset of capitalism.” (Source)

Oct 28 2021

BIG SHIFT – Top Two Decepticons Take a Knee to MAGA Power and Endorse Herschel Walker in Georgia Senate Race


Posted originally on the conservative house on October 27, 2021 | Sundance | 79 Comments

This may seem like a small story that skirts under the radar of most; however, the ramifications are quite large.

Senate Minority Leader Mitch McConnell (KY) and Senate Majority Whip John Thune (SD) have endorsed MAGA candidate Herschel Walker for the Georgia Senate Race.

This move ¹could represent a major shift in the political outlook of the upper chamber.

McConnell and Thune are the two top DeceptiCons in the Senate.  McConnell has been grooming Thune to be his replacement if they collectively cannot defeat the MAGA movement Republicans the same way McConnell previously crushed the Tea Party Republicans.   If the larger U.S. awakening returns the Senate to GOP control in 2022, it is very likely John Thune will become Majority Leader.

That is the background to consider this shift: “Herschel is the only one who can unite the party, defeat Senator Warnock, and help us take back the Senate. I look forward to working with Herschel in Washington to get the job done,” McConnell said in a statement to POLITICO.  “On Monday, the retired football player received the backing of South Dakota Sen. John Thune, the No. 2 Senate Republican.”

¹Herschel Walker had met with most of the key DeceptiCons, including McConnell, Thune, Cornyn, Barrasso, and Graham prior to the endorsement.   As a result, the decision to support Walker likely highlights a MAGA inevitability outlook by the corrupt political class.   However, these are DeceptiCons we are discussing, so two additional motives should not easily be dismissed.

(1) McConnell and Thune feel confident in their ability to corrupt Walker giving him the Tim Scott treatment.  Or,

(2) McConnell and Thune have already organized the defense against Walker by giving ground support to Walker’s opponent Democrat Sen. Raphael Warnock.

The number two option would be a version of the DeceptiCon Mississippi election strategy where they make an agreement with Warnock for something in the future; then seed the ground game against Walker by telling Georgia Republican Party operatives what to do; then openly endorse Walker to provide themselves cover.   This type of DeceptiCon operation is familiar to those who remember Lee Atwater or more recently the political strategy of Karl Rove (Atwater’s protege).

Either way, the fact that McConnell and Thune are now on record supporting Herschel Walker means they cannot work (in the open) to shape any campaign effort against him.  I would have liked to be a fly on the wall for the phone call between Mitch McConnell and Kelly Loeffler.

Oct 28 2021

NYP Report Outlines Massive Legislative Gimmicks Being Deployed Within $7.5 Trillion Legislative Package in Biden’s Build Back Better Program


Posted originally on the conservative tree house on October 27, 2021 | Sundance | 103 Comments

The New York Post has an excellent expose’ [See Here] showcasing just how manipulative the legislative tricks are within the mega-trillion dollar human infrastructure and Build Back Better bill.

As anticipated by most political observers, the Democrats are using budgetary tricks to avoid the Congressional Budget Office putting a real price tag on their legislation.  The article is easy to understand even though the legislative tricks are far beyond anything any congress has ever attempted.

(New York Post) – After months of criticizing Sens. Joe Manchin and Kyrsten Sinema for balking at the original $3.5 trillion price tag, congressional Democrats are finally accepting reality and paring President Biden’s social welfare package to between $1.5 trillion and $2 trillion over the decade.

Does this mean they are responsibly removing the bill’s worst provisions and crafting fiscally sustainable legislation? Of course not!

Instead, welcome to the gimmick Olympics, where progressives are using classic accounting tricks to hide the true cost of the bill.

Instead of producing legislation that truly costs $2 trillion over the decade, lawmakers are crafting as much as $4 trillion worth of new initiatives, but simply using fake expiration dates to score only a few years of each proposal. The idea is to create new federal programs, hook the constituencies on new federal benefits, and then assume that future Congresses and presidents will not dare to allow them to expire. Those assumed extensions will then blow up the cost far above today’s $2 trillion sticker price.

For example, the March stimulus law temporarily expanded the child tax credit from $2,000 to $3,000 per child (and $3,600 for children under the age of 6), and expanded eligibility to higher incomes. Democrats have made clear that they want this policy made permanent at a cost of $1.3 trillion over the decade. Yet the initial reconciliation proposal expanded the policy for just four years, and now the White House is calling for just a one-year extension — effectively hiding nearly $1.2 trillion in upcoming costs. Congress already renews a small number of tax cuts each December, and the child credit will simply become another annual extender.

But the gimmick Olympics do not stop at the child credit. The White House has reportedly proposed three- to four-year expiration dates for other initiatives such as paid family leave, Medicaid expansion and new ObamaCare subsidies. A proposed new child care program — which a study by the left-wing People’s Policy Project shows could raise child care prices by $13,000 per year — would reportedly phase in slowly and expire after a few years. On the other side of the gimmick window, a new Medicare dental benefit would be delayed until 2028, and then have its costs jump once outside the 10-year scoring period.

Most cynical of all is the Democrats’ maneuver on the $10,000 cap on the state and local tax (SALT) deduction. The $10,000 cap is set to expire at the end of 2025, but House Democrats want to eliminate it immediately. So to “pay for” that immediate $90 billion-per-year tax cut, Democrats would actually impose a new SALT cap beginning in 2026 — count that future revenue as an offset — and then quickly cancel the tax before it ever goes into effect. In other words, they are creating entirely fake future policies in order to count the fake savings today. (read more)

Oct 28 2021

Beware The Government That Wants to Tax “Unrealized Capital Gains”


Posted originally on the conservative tree house on October 27, 2021 | Sundance | 201 Comments

Taxing “unrealized capital gains” sounds like a catchy and obscure way to make wealthy people pay more in taxes, but it doesn’t work.  A government that moves in this direction ignores the reality that people are not static.  The process also involves “taxing wealth” which then becomes an arbitrary definition.

Unrealized capital gains are not income, they are simply increases in value.

If your home was worth $200,000 last year and $300,000 this year, you have an unrealized capital gain of $100k.   A 15% tax bill on that value increase means the homeowner would have to pay $15,000 to the IRS.

Joe Biden is proposing to pay for his multi-trillion expansion in debt through this type of tax upon billionaires.   Treasury Secretary Janet Yellen admitted this was part of their thinking to help pay for the Biden budget last Sunday.  WATCH:

Proposing a tax on money that does not exist is the peak of government.   Sure the proposal applies only to billionaires who have massive gains in their stock portfolios, but billionaires are not esoteric titles.  Billionaires are people who can, if needed, move their physical location and avoid any U.S. tax on their wealth.

This is the same reason why corporations move the location of their home offices to countries with lower tax rates, a process called corporate inversion.

If Elon Musk, Warren Buffet or any other multi-billionaire wanted to avoid U.S. taxes on their personal wealth they can (relatively easily) change their official residence to Mexico or any other nation where the value of their yet unrealized wealth would not be taxed.  That individual inversion process is an easily predictable unintended consequence.

As noted in The Hill:

[…]  Biden is suggesting that he will pay for the new spending by taxing people not on what they have earned but what they could earn from selling assets. Most people have assets that increase in value over time. Consider a family home. Over the course of many years, it can easily double in value, but you do not “realize” that money unless you sell it. Biden is suggesting that the government should start taxing you based on any increased value of the things you own, even though you have not actually made that money. It doesn’t matter that the home or stock or art could ultimately go down in value after you are taxed on the higher value. Indeed, if you tax some unrealized gains, you could in extreme cases force people to sell assets like a home to pay the tax on income that they did not make.

The administration has started where few would object: billionaires.  (read more)

Additionally, another issue arises if the previously taxed asset goes down in value; an issue where the depreciation or loss becomes a negative tax liability.  Meaning if you already paid taxes on an increase in value for an asset, and the following year that asset drops in value, the federal government would then owe you money to recompensate you for a realized loss.  If you paid $15k on a $100k increase in the value of an asset, and the following year that asset drops in value by $100k, the $15k you paid would be deducted from the current year tax liability.

There are constitutional issues with the federal government taxing wealth or assets; however, the overarching premise behind every proposal is that all wealth belongs to the government.  You hear this ideological perspective when people say “tax expenditures” or spending in the tax code.  The idea is that your income is what the government permits you to keep, NOT what your labor has achieved.

The ideology behind taxing “unrealized capital gains” is the same ideology in the premise of “sharing the wealth.”    It is an ideology that stems from a belief that your dollar earned comes at the cost of my dollar not achieved.

Beware the voices who would advocate for taxing unrealized gains in wealth as a source of government revenue.  Once you start down the path of taxing wealth you set up a process where the U.S. government controls the limits of where that wealth is defined.   It will never stop at billionaires….

Oct 28 2021

Recap of Attorney General Questions During Senate Hearing From Senators Cruz, Grassley, Hawley, Lee, Cornyn


Posted originally on the conservative tree house on October 27, 2021 | Sundance | 320 Comments

Attorney General Merrick Garland appears before the Senate Judiciary Committee to answer questions about his involvement in the drafting of a DOJ memo to the FBI requesting support for investigations of parents who attend school board meetings across the country.

While the topic is downplayed by U.S. corporate media, the specifics of the issue are pertinent in that they highlight the politicization of the Justice Department by DOJ officials throughout main justice and the various offices of U.S. attorneys.

Garland was prompted to write his instructions as an outcome of the White House coordinating with leftist political operatives within the education system, specifically the National School Board Association.

It seems apparent, from the questioning and responses today, that Deputy Attorney General Lisa Monaco was the central DOJ official who coordinated the political intent of the memo.  Monaco was previously President Obama’s homeland security advisor and lawyer in the White House.  Within the main justice structure, Lisa Monaco is now the head of the DOJ National Security Division, the agency given the prosecutorial power within the Garland memo.

The background of the memo involved parents becoming aware of Critical Race Theory (CRT), essentially Marxist lesson plans within various regional school boards.  The parents responded to the information by confronting school boards across the nation.  The left-wing political operatives were caught off guard by the massive assembly and grassroots organization of parents in almost all states.

The CRT and education issue galvanized across party boundaries as Republican, Independent and Democrat voters -who are also parents- united in a common cause against the Marxist indoctrination material that is akin to the same playbook that triggered the Chinese Cultural Revolution.

Quickly awakened parents and concerned citizens were confronting the issue, and their commonality became a political risk to Democrats.  This triggered contacts from various left-wing organizations to the White House.

The Joe Biden White House -filled with Obama ideologues- responded to the threat of intense political damage, by organizing pushback against parent groups through the various educational organizations, teachers unions and community activists.  Their assembled strategy resulted in the letter from the National School Board Association, to the DOJ into the awaiting hands of DAG Lisa Monaco.

Monaco, having previously seeded the discussion within Main Justice about the political threat, then organized and helped draft the memo quickly signed by AG Merrick Garland.  The NSBA letter arrived on Friday, and the AG memo instructing the FBI to target parents was signed the following Monday.  Everything in the background of the issue highlights how the political needs of the White House become the focus of activity by the U.S. Justice Department.

In essence, the Merrick Garland memo highlights how the DOJ is weaponized against the political opposition of the White House; this is the larger issue.

Given the recent examples of the DOJ being weaponized against their political opposition, the Garland memo is seemingly just another data point in an endless assembly of data-points that prove just how corrupt the U.S. system of justice has become.  However, just because corruption is rampant and transparently obvious does not mean we should allow ourselves to become numb with anticipation of that corruption.

Action to address that corruption starts at the local level with a committed and engaged citizenry who actively address and hold accountable their local school board members and educational officials.

The intent of the Garland memo was to frighten parents away from the corruptions within the education system with the threat of the FBI investigating them.   If you allow your behavior and expectations to change based on fear, those who count on fear to manipulate the outcome will win.

Many people view these confrontations by Senators as nothing more than public displays that amount to no accountability.  In part, that is correct; however, it is not the responsibility of a senator, any senator, to confront the school board member where the origin of accountability needs to reside.

The role of a U.S. Senator is to hold the federal arm of the DOJ accountable and put them on notice.  This is what they are doing.  The role of the engaged citizen is to address the educational manipulation on a local level.  You cannot abdicate your responsibility to confront corrupt activity in your neighborhood to Washington DC.  It is the role and responsibility of the parent/citizen to deal with that corruption.

Snarking at Senators for confrontational hearings might feel like a good way to deflect our responsibility.  However, all it does is erode the foundational principle behind our constitutional republic which is built upon individual rights and responsibilities that start at the local level.   Those who believe the federal government should address local school board issues, are, by nature of their argument, asking for a larger system of centralized government.

Ted Cruz:

Josh Hawley:

Mike Lee

John Cornyn:

Chuck Grassley:

Posted in 1st Amendment, Big Government, Big Stupid Government, Cold Anger, Deep State, Dept Of Justice,