China is the single biggest debt-holder of the United States Government. Over the last several weeks, China (not to mention several prominent members of the largely socialist European Union) has expressed growing concern over Obama’s handling of the current economic crisis and his administration’s push for increased economic globalization. Their concern, not surprisingly, is not altruistic but is at root a concern for its own economic welfare. Since China has vast holdings of U.S. government bonds and is hugely dependent on product sales to the U.S. economy, they are rightly concerned when something threatens the economic viability of our country. In other words, if our economy is sufficiently damaged, the U.S. will default on its debt and reduce trade, which will damage the already precarious Chinese economy.
 
Speaking from this position of concern, and likely trying to strengthen its role in global economic matters, China recently proposed the creation of a new global currency to replace the U.S. dollar. Russia is of like mind and has not only called for an international currency to replace the dollar, but is taking the next step of convening an international conference to discuss the creation of that currency.
 
For the last several decades, the dollar has been the most widely used currency in the world, largely because the U.S. has the biggest and strongest economy in the world, and the U.S. political system is one of the most stable around the globe. However, as the Obama administration has taken bold steps to dramatically change the U.S. economy, many abroad have seen such action as reckless and threatening to the overall global marketplace. Premier Wen Jiabao of China recently appealed to Washington to avoid taking any action that would weaken the dollar or threaten the ability of the U.S. to repay its debt.
 
This concern is not being expressed only by communist China. Many governments around the world hold a large portion of their financial reserves in U.S. dollars and rely on them as stabilizing factors in their fiscal planning. Additionally, nearly all countries are reliant on the dollar for numerous commodities and international business transactions. These countries are also at risk should the dollar or the U.S. economy falter or fail. Knowing their welfare is dependent in large part upon our welfare, leaders of many nations have warned the U.S. about its plan for the federal government to spend its way out of the recession. France, Germany, and the United Kingdom have all joined the chorus in expressing their doubts and concerns about Obama’s spending plans.
 
Normally, I’m not one to give much ear to socialists and communists who try to tell the U.S. how to run its business. But when voices of socialists and communists around the world speak in harmony with each other, together with American conservatism, such harmonics do catch my attention. This is especially true when the choir members have already traversed the road Obama is now embarking on. These nations boldly marched the socialist road to the brink of economic collapse and are deliberately backing away from socialism. (Russia excepted here. The Soviet Union drove off that economic cliff and ceased to exist as an empire.) These nations know the terrain and the landmarks and they are saying, “Stop!  There is a cliff ahead!”
 
As Obama moves the U.S. economy squarely into the realm of socialism (in some ways further left than where most of socialist Europe and communist China are today) we need to ask ourselves:

• Has a socialist economy ever succeeded in consistently raising the standard of living for its people?
• Does socialism inspire innovation and foster efficiencies?
• Does socialism preserve individual liberties?
• Has government ownership of business improved profits, products, choice, availability, or fostered healthy competition?

To date, the world has yet to witness affirmative answers to any of these questions.
 
As for replacing the U.S. dollar with another currency as the currency of trade and national reserves I am rather agnostic. There are pros and cons either way. Personally, I’m inclined to focus on the health of the dollar rather than the national ego of printing the international currency of choice. Of much more importance, however, is that nations around the globe are expressing strong concern about the U.S. government’s handling of the economic crisis and the likely outcome. Add to those voices the 60% of Americans who doubt the efficacy of Obama’s plans and a rational person must ask why Obama et al are running at full steam without pausing to listen to reasoned and experienced voices of caution?
 
Well, maybe it is the audacity of arrogance or the audacity of ignorance. Most likely, though, it is the audacity or power-mongering and the audacity of Marxist ideology.
 
Let us each bolster our hope for America’s welfare with the resolve to play a role in changing the direction our nation is currently headed.

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As a point of clarification, we can always have a different global currency (the Euro, the Sterling Pound, etc.) and retain our dollar for mainly domestic use. This is what the rest of the world does today. It is a quite different matter to surrender autonomy by adopting a new national currency as Europe did via the Euro. This is not what is discussed above.

This year, my family is anticipating a tax return and I was motivated (partly intrinsically and partly by the prodding of my better half) to get our federal tax return completed and submitted early. Maybe it was the festive nature of getting money back from the government or maybe it was my feisty Irish blood that takes delight in defying the government, but I chose Saint Paddy’s day for the delightful experience of spending a couple of hours with TurboTax.
 
Upon completion, the software asked whether I would be interested in seeing how my finance and tax situation compares with the national average. I admit there was some pleasure in seeing that comparison, but I also admit that I could have handled a lot more pleasure! All this time working on taxes spurred my thinking on the subject.
 
I am quick to claim that I (actually we all) pay way too much in taxes and that I don’t ever feel like I get my money’s worth from the federal, state, or local tax authorities. Almost without exception, government continually reaffirms that it is inefficient, corrupt, and incompetent, and I resent the way elected officials waste the money I worked hard to earn. And, if surveys are to be believed, I stand with the majority of Americans in these sentiments.
 
The typical American worker is committed to 260 work days per year. He is excused from 10 of these in observance of national holidays and takes another 10 days for vacation. Inc Magazine reports that another 7 days are taken as sick days. So, while we are paid for 260 days, we actually work 233 days on average. As a percentage of the 365 day year, 233 days does not sound too bad. It is definitely more than most Europeans work, but far less than our forefathers did. What is truly disturbing, though, is how many of those 233 days we are working to just pay our taxes to the government.
 
Where Our Earnings Go
Before I get to a breakdown of the various taxes we pay, it is interesting to see where our hard-earned income goes. As you can see, an alarming 31% of our income goes to funding government (20% for federal taxes and 11% for state and local taxes).

What Taxes We Pay
Of the 31% of our income that we pay in taxes, the lion’s share is taken in the form of individual income taxes by the federal government. The next biggest chunk is taken for social insurance programs, Social Security and Medicare. The depressing thing about these taxes is that the social nets they are designed to fund will be long bankrupt by the time most of us need to start collecting. The biggest surprise to most of us, though, is that we are actually paying corporate income taxes on top of all the other taxes we pay. This hidden tax is paid every time we purchase a product or service; the corporations we patronize pass on the taxes they pay in the form of higher prices to us. In reality, corporate taxes are actually consumer taxes paid in a different way. It might be noted that the U.S. corporate tax rate is one of the highest in the world.

Implications
As you work on your taxes, and each time you get a check stub, it is advisable to think about how much money the government is taking from you. Ask yourself what you would do if you were allowed to keep most of that money; how would it help you, and how would it help the economy if you spent it? Also, remember that the funding of numerous stimulus and bailout plans will add to the amount you pay in taxes (pundits are suggesting we can expect an annual increase of $3,000 per household in federal taxes). Don’t forget the dramatic increase in the money supply to help fund these plans is stoking the flames of inflation, which is simply an especially well hidden form of taxation. The government reported yesterday that we are seeing the highest inflation rates in a couple of decades - tracking at about 5% per year – and we are just now beginning to see that rate begin to rise.
 
When you have reflected on all of this, pause and ask yourself: “Am I getting my money’s worth?” Then consider a basic tenet of conservatism, small government. Given that government is inefficient, corrupt, and incompetent, wouldn’t it be better if the free market were unshackled and allowed to address most of the needs of society, while government focused on the few things that only it can do?  This approach keeps systems and programs efficient and cost effective and ensures vital needs are met. If things get too costly or needs fail to be satisfied, competition will spur a better, less expensive alternative. When the government runs the show however, where can the competitive alternative develop?
 
Let these reflections spur you to action. Join a local tea party, pound your elected officials with input on the subject, and vote your pocketbook on your next ballot.

Following on the heels of massive stimulus and bailout plans, Congress has voted to give the government an 8.7% spending increase. Last fall, the Democratic Leadership in Congress approved a government budget for only half of the year (the government’s fiscal year runs from October through September), hoping that Barack Obama would be elected and that he would be more open to increasing annual government spending. For the Congressional Democrats, this bet paid off.

With only a half-year’s budget approved, the federal government is set to run out of money this month unless a budget for the remainder of the year is passed by Congress (which just happened) and subsequently approved by the president (which he will sign soon). Given the tax and spend history of the Democratic Party, it is no surprise that government spending is increasing much more than inflation and much more than can be justified in an economic environment where everyone else is tightening their belt.

Conservatives, by definition, advocate for less government, because the cost of bureaucracy is a heavy burden on the people and this burden directly limits their prosperity. So, it is no surprise that conservatives find such spending increases both unwarranted and harmful to the people of this country.

By its very nature, taxation is coercive: the government demands money from its constituents under the threat of force – you don’t pay and you are fined and sent to jail. Few would argue that this is an abuse of government power. In fact, it is a necessary evil for any functioning nation. That said, those wielding this power have a moral obligation to be wise and prudent stewards of government revenues (money taken from the pockets of fellow citizens). Unfortunately, too many elected officials have come to believe that all money belongs to the government and that the government should decide how much the citizenry really needs.

To be fair though, not all the blame can be laid at the feet of the Democrats. Under President Bush, spending also increased imprudently. Many pundits gave Congressional Republicans a bye, assuming they had voted for the spending out of a political obligation to support the leader of their party. Theoretically then, the shameful increases in government spending could be blamed on Bush – until this week anyway. Republicans offered little resistance to the spending increases and, more offensively, joined whole hog in pork spending (pun intended).

Included in the Omnibus Spending Bill (the official name for the government budget), were 9,287 pork projects at a cost of nearly $13 billion. As a reminder, pork (also known as earmarks) is a congressional tool used to fund pet programs and projects while protecting funding allocations for serious scrutiny. Most of the time, earmarks are used to reward supporters and improve an official’s odds of reelection. However, knowing how offensive the citizenry finds this practice, both Obama and McCain campaigned on eliminating such practices.

While the nature of earmarks limit scrutiny, reports indicate that 60% of the earmarks in this half-year budget are attributable to democrats and 40% are attributable to republicans. Indeed, 6 of the top 10 pork spenders are Republicans. Given the ratio of Democrats to Republicans in Congress, both parties appear to be equally guilty in fleecing the American People. Once again, Congress demonstrates that preservation of power and privilege trumps their concern for their country.

Following is a very brief sample of this bill’s pork spending:

• $332,500 to build a school sidewalk in Franklin, Texas
• $225,000 for Everybody Wins!
• $200,000 for a tattoo removal program in Mission Hills, California
• $190,000 for the Buffalo Bill Historical Center in Cody, Wyoming
• $237,500 for theater renovation in Merced, California
• $1,049,000 to combat Mormon Crickets in Utah
• $238,000 for the Polynesian Voyaging Society in Hawaii

For a larger sampling, please visit Heritage.org.

For me, the most important lesson is that there are far fewer authentic conservatives among congressional Republicans than many people thought. Increasingly, it seems that the “Republicrats” run Congress. Whether Republican or Democrat, members of Congress are all about what is in it for them and have precious few principles that they both espouse and adhere to. The silver lining, though, is that we have a much better idea about which self-proclaimed conservative Republicans are imposters. For these, their constituencies deserve better and should elect truly conservative candidates during the next round of congressional primaries.