Onwards 2012!:

Republicans couldn't win the Senate back in 2010, but they have an enormous edge in the House, which means nothing that Republicans disagree with can be passed from here.  This protects us from Cap and Trade, Amnesty, and the end of the Bush Tax Cuts.  ((Three issues I was extremely worried about starting in 2008.))  The Bush Tax Cuts were originally passed to 'phase out' after Bush's term of office was done, and that sunset has finally arrived.  I can understand why Bush had to pass the tax cuts in this manner, he never had a decisive hold on the House and the Senate and had to negotiate with the party across the aisle.  Even so, I would have liked for Bush to have negotiated perhaps a smaller tax cut, that would actually be permanent, rather than leaving this bombshell of the most massive tax increase in US History to automatically explode on us January 1st.  It is more responsible governing than this game of chicken, and hot potato, Congress and the Presidency is currently playing with our tax cuts.  Hopefully someday we'll be able to escape from the bad policy decisions of Bush, but this tax debate clearly shows how Bush's long arm is still more powerful and influential than even President Obama in today's politics and the current state of the USA.

In the next few days it is likely we will reach a compromise where all the Bush tax cuts are extended temporarily, and some of them will be made permanent.  I'm for overhauling the entire tax code and starting anew, but so long as the political will is lacking, the bush tax cuts are better than nothing.  Democrats need to understand that taxes discourage economic productivity and distort the market (as it tries to dodge taxes by doing unproductive, but legally clever things.)  Any tax is a bad tax, but some taxes are even worse than others.  Taxes on capital gains, for instance, discourage investment.  But investments are the only way to grow the economy and create new jobs.  It is the source of innovation and technology.  Targeting capital gains with taxes is like eating your seed corn.  It's killing the goose that lays the golden eggs.  Estate taxes are also a bad tax, because the amount of legal loopholes makes the entire business a giant payout to lawyers and not to the public purse.  The amount of money it costs to avoid or collect the estate tax dwarfs the amount it actually collects in taxes.  I have even heard that 40% of all laws in the country are related to inheritances.  Just imagine how many lawyers we could put out of a job and how much simpler people's lives could be if the estate tax remained at the 0% it is today.  I understand that Democrats hate the idea of unearned wealth and want to hurt anyone who benefits from it, but this is senseless.

Supposing the inheritor of a vast fortune is a fool, he will quickly lose all his money anyway, because he will make bad business or spending decisions, bad marital decisions, overdose on drugs, or whatever.  This is where the phrase 'from shirtsleeves to shirtsleeves in three generations' comes from.  But supposing the inheritor is not a fool, which would make sense given that IQ is hereditary, the heir to the fortune could well be poised to use his position to grow his business and make it even better than before.  In that case he clearly 'earned' his money, and his right to the money, by being such a good steward of it.  So either the heir of an estate doesn't deserve it, in which case a 'fool and his money is soon parted,' or he does deserve it, in which case he shouldn't be deprived of his fortune.  It is also unreasonable to suppose that rich people shouldn't be allowed to take care of the people they love with their money.  To say that wealth can't have any actual use in life, and that you are not even allowed to benefit your children or grandchildren with it -- that all you can do with wealth is give it away to charity for strangers, or hedonistically buy cruises for yourself, is outrageous.  These people worked hard to produce truly valuable goods and services for others.  Maybe they were doctors who saved your child's life.  But now you're saying they can't in exchange take the money they earned and save their children's lives by giving them all the money they will need for their futures.  That isn't fair.  Money should be allowed to buy genuinely useful things, not just trifles.  If the work they did was genuinely valuable, their recompense for said work should be genuinely valuable too.  And what rich people who give money to others in their will are saying is that this is the most valuable use for the money they earned and worked for they could find.  Forget about the inheritors and whether they did anything to earn the money, the earners of the money earned the money and this is how they wish to spend it.  If they had wished to spend it on a giant pick ostrich statue in their yard, no one would object.  But if they want to protect their children's financial futures then it's evil and must be stopped?  That's insane.

Cutting the income tax encourages people to work harder and earn more, because they know they will be able to keep more of the money they make.  Increasing the income tax will change the cost/benefit analysis.  If taxes are 40% for everything above 100,000, say, many people will just say 'screw it, I'll only make 90,000 and go on vacation after that each year.'  This puts an artificial ceiling on people's productivity that hurts the economy.  Ideally, every single dollar would be taxed at the same rate, so that there are no artificial incentives to decrease productivity in the tax system, no matter how much people are making.  Rich people would still be paying more in taxes because they would be making more dollars, all of which would be taxed at the same rate.  Poor people could be recompensed with the citizen's dividend for the extra burden they are asked to bear.  But in any event, the Bush Tax Cuts were a step in the right direction in the war against the income tax and must not be allowed to perish.

Taxes in general decrease profits which means businesses can't hire new workers, invest in high-capital enterprises, or research new technologies.  Raising taxes in the middle of a depression, then, is about the stupidest act imaginable.  Real unemployment stays at a stubborn 20% or so, according to the more accurate unemployment measurement methods of shadowstats.com.  Raising taxes can only make our unemployment situation worse.  Furthermore, you can't squeeze blood from a stone.  Our economy simply doesn't have any money to tax.  Whether you tax 80% of 0, or 20% of 0, you'll still get 0.  The only way we'll increase our tax revenues again (which have fallen into a pit because no one made any money for the last couple of years) is by growing our economy again.  Republicans understand this but Democrats don't.  1% of a very big pie is more than 90% of a very small one.

One thing Republicans won't be able to prevent is the implementation of Obamacare.  Since Democrats control the Senate and the Presidency, all of this talk about repealing Obamacare is just wishful thinking.  They don't even have to agree to amend a single portion of it.  Obamacare has an almost irresistible momentum, like Social Security and the Bush Prescription Health Care benefits.  Once a new spending program in Washington starts, it never ends.  Suppose Republicans campaign for its repeal in 2012, by asking the American people to give them the Senate, the House, and Presidency, the only body powerful enough to change Obamacare.  Even this wouldn't be enough because Democrats could still filibuster in the Senate against any changes.  This means entirely repealing Obamacare is hopeless.  The best Republicans can do, starting now or even after a victory in 2012, is find compromises between themselves and the Democrats that slightly improve the bill.

I suspect immigration policy will never be dealt with by the federal government.  It will devolve to the states who will each formulate their own policy on illegal immigrants, like California's Proposition 187 and Arizona's SB1070.  Many states elected anti-immigrant bodies who want to mimic Arizona.  The federal government will remain in gridlock, but the States will take decisive action which will create a real change in our situation.  Illegal immigrants, finding the USA more and more inhospitable both in tone and job opportunities, will be forced to go back home and rejoin their families where they belong.  Employers, facing tougher and tougher sanctions if they don't obey the E-Verify system, will give up trying to hire illegals on the sly and start hiring real Americans again.  As border security improves, the cost to be smuggled into the country will skyrocket, pricing out poor minimum wage unskilled laborers from being able to raise the capital necessary to buy their golden ticket into the country.  In the next ten years I suspect the entire illegal immigration problem will be solved.

America has taken positive steps towards a free trade pact with Japan, China, and other vitally important trading partners this last weekend.  Free trade is one of the stupidest topics on Earth because all of the economists, all of them, agree that it benefits all sides, and yet the people remain stubbornly ignorant and irrational about the matter.  They refuse to listen to their betters who understand the situation, as though they can out-plumb plumbers, out play quarterbacks, or out craft carpenters in their areas of expertise.  Common sense should be enough to see that free trade benefits all sides.  After all, if it didn't benefit both sides, they're free to not trade.  So obviously every time they do trade both sides are better off.  It is outrageous that a few special interests within the country can hold the rest of the country hostage by disallowing trade with the outside world.  Why is their economic livelihood more important than ours?  We need the lower prices free trade gives consumers, and we need the export industry jobs providing goods to the outside world provides.  We need money just like they do.  Their needs are no more important than ours.  And yet we are told that the whole country must forgo massive economic benefits so that they can enrich themselves off of us by delivering more expensive, inferior products we are forced to buy at the point of a gun (ie, a government monopoly, ie, a trade barrier.)  If we are so worried about the losers of free trade, we could take the profits made from free trade, and just deliver them the money for free in their mailbox.  We could buy off every single industry affected by the move to free trade with a million dollars.  Anything to free us!  We'd save oodles of money in the long run by cutting off any future generations from monopoly-based parasitism.

Republicans tend to be better on free trade on democrats, but both parties are more responsible on the issue than the electorate at large.  We can only hope that whoever is in charge, they ignore the stupid masses and go ahead and negotiate more free trade pacts for us.  If we want to get out of this recession, we need to join this proposed Pacific Rim free trade group.

But what I really look forward to is the 2012 elections putting in a bunch of Republican budget hawks that genuinely reduce the size of government.  By 2012, we should have finished our wars in Iraq and Afghanistan.  This gives us a great opportunity to cut the military.  Almost the entire military needs to go, but I know that isn't within political reach.  What we can do, however, is agree to cut the military for every cut in social spending.  So for instance, if Republicans want to cut education, Democrats could insist they first cut the military the same amount.  In this way, both Republican and Democratic boondoggles could finally be reduced.  Not only would this allow lower taxes, it would allow America to crawl out of a dangerously enormous debt that is now in the tens of trillions of dollars.  111 trillion dollars to be precise:

http://www.usdebtclock.org/

We must reduce social security benefits to only those poor who really need it.  We cannot afford to give extra money to rich retirees who can live it up just fine on their own.  As for Medicare, we're going to have to ration care.  We can't promise to spend infinite money in an attempt to make every old person immortal.  If there is a surgery that could genuinely save someone's life, fine.  But if all health care can do is prolong someones suffering, with their death still assured, we cannot afford to spend taxpayer dollars on this nonsense.  We have a 111 trillion dollar debt.  The luxury of a few extra months on this Earth is just meaningless in the face of the spending cuts we need to make to free ourselves from debt slavery.

If people want to live long lives, I suggest they live healthy lives.  Living at our expense simply isn't acceptable.  It's their life, they are responsible for how long it is.  We aren't.

If we can get enough of a tea party, Rand Paul, deficit hawk movement before 2012, we could see some truly useful change coming from Washington.  This is the time.  The stars have aligned in our favor, and never will again:

The 2010 census is about to give a giant boost of seats in Republican-leaning states.  But in a decade or two, these states will be thoroughly democratic due to hispanic voting patterns.  This decade is the only one where hispanic immigration actually empowers Republicans, because their population is counted, but their votes still aren't enough to count.

The next Senate election has something like 23 Democratic Senators up for reelection and 10 Republican Senators.  Obama and the Democrats are deeply unpopular, and nothing between now and then is going to reverse that.  White America has soured on a clueless Democratic leadership which is more likely to insult them than listen to them.  This should create a bloodbath in the Senate.  The Republicans should gain something like ten seats in the senate next time.  The six seats they gained this election is just a preview of the true 'wave.'

Between the census and the seats up for reelection in the Senate, Republicans are virtually assured large majorities in the House and Senate.  If they field a reasonable candidate for President, they could beat Obama for that position too.  At this point the presidential election is Republicans' to lose.  So let's assume Republicans win the presidency too.  This is the only chance to see real budget reform in Washington.  A Republican House, Senate, and Presidency, and an electorate thoroughly sick of big spending Democrats, deficits, and the debt.  I hope Republicans realize what a golden opportunity they have to prove they really are the party of small government.  The American people, when polled, have for the last century or so continuously said they wanted smaller government and less spending.  At the same time, the government has continuously grown and spent more.  Something has to give.  I bet the size of government is what gives as America shows up to vote in 2012 for real hope and change.