© 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.
  1. One way to do it is to see more tax revenues like those being generated by Apple’s move thanks to tax reform.
  2. A second way is to see more dividends and higher stock prices in the Calper’s pension accounts so pensions can be sustained.
  3. 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?