© 2016 Jim Spence - You have to wonder how committed to economic stupidity top
Democrats are these days. Earlier this week Apple Computer announced that it
was going to bring home $350 billion in overseas profits to invest in American
facilities etc. The move will yield…….get this……$38 billion in federal income
taxes. The money Apple is bringing home would never have been taxed prior to recently
passed tax reform. It would have remained overseas. Many other large companies
will be doing the same thing. The total assist to government coffers will be
gigantic.
You would think this is good news unless you put credence into what
Nancy Pelosi had to say about tax reform. When Pelosi and NO OTHER DEMOCRAT in
the House or the Senate voted for the incredible tax revenue windfall she said:
"I would hope that with their big advantage of bringing
money home at a very low rate that they would invest in infrastructure and
things, but our experience has been that they will do dividends, do stock
buybacks, and things like that. I think it's insignificant."
In December Pelosi characterized the tax reform legislation that will produce
the huge windfall as: “Armageddon.”
Democrats either refuse to connect the dots or are too
stupid to do so. The smart money suggests it is a little of both. It is as if every
Democrat must take a vow to be oblivious to the value of dividends and stock
buybacks.
The ironies are astonishing. Earlier this month for the
first time California Governor Jerry Brown raised the prospect of pension cuts.
Brown who is desperate to save California’s sinking pension ship said legal
rulings may clear the way for making cuts to public pension benefits which are
smothering both local and the state’s economy.
Um…..Democrats…….there are three ways to provide financial
relief to the state and local governments in California.
- One way to do it is to see more tax revenues like those being generated by Apple’s move thanks to tax reform.
- A second way is to see more dividends and higher stock prices in the Calper’s pension accounts so pensions can be sustained.
- The third way, which will only occur if the first two options are not available, is to CUT PENSIONS for public retirees.
The Brown administration, which refuses to support business
prosperity, has sunk so low it is hoping the courts will modify the so-called
California rule, which says benefits promised to public employees can’t be
rolled back. The California Supreme Court is set to hear a case in which lower
courts ruled that reductions to pensions are permissible if the payments remain
“reasonable” for workers.
As of today only 68% of California’s pension promises are
funded. This is a daunting shortfall that can be assisted mightily by higher
dividends and more stock buybacks……the things Nancy Pelosi has said are “insignificant.”
The best guess is retired workers don’t think so……if they are thinking.
California is not alone. Many states and local governments
have not set aside enough money to keep promises made to retired bureaucrats.
Estimates are the total shortfall is around $1.7 trillion. Of course the powerful
rally in the stock market has reduced this amount over the last fifteen months.
Jerry Brown told reporters in the next downturn, when things
look pretty dire, public pensions would be one of the items on the chopping
block. Democrats like Brown say these things while screaming bloody murder about
tax reform. They are ardently against policies that would provide a huge assist
to avoiding such a calamity as cutting retirees pensions.
Some people ask is every Democrat in California and in the U.S.
House and U.S. Senate too stupid to connect the dots or are they ignorant?
My question is does it matter?
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