V.A.T.- What’s That?
A value added tax has recently been proposed by Paul Volker. Volker is a former head of the Federal Reserve and is currently Chairman of President Obama’s Ecomomic Advisory Board. He has said that”if there is a need to raise taxes we should raise taxes”.
Volker is a economic Guru with a long history of advising all kinds of financial institutions. He was appointed as Chairman of the Federal Reserve by President Carter and immediately raised interest rates which reached 20 % in a very short period of time. The highest unemployment since the depression was the result of Volker’s actions in the Carter years. I remember this period well since I was forced to close my company operations and lay off hundreds of employees and contractors as a direct result of Volker’s policy. Volker and Carter never knew the pain they created in the life of those great people who were an important part of my business family.
Volker is now speaking about a value added tax system being a benefit to the fiscal solvency of the Federal Government. Volker was born in Cape May N.J. and it is now time for him to return to it’s beach and contemplate the waves and littoral drift rather than dealing with financial matters. He has moved past sense by talking about more taxes and a value added tax system which will burden business with additional overhead. In addition the value added tax is thought by many to be a drag on consumption. New government overhead on business and a system of taxation the inhibits public consumption is not what anyone needs.
The Obama minions are starting the drum beat for change that will move us a few steps farther down the road to the Statist intentions of this administration.
Don Elmendorf is head of the Congressional Budget Office. He recently stated that the current fiscal path is unsustainable. (Duh-really Don?)
Ben Bernanke Chairman of the Federal Reserve said: That the choices faced are higher taxes and/or modifications to entitlement programs. ( Social Security-Medicare-Medicade etc) Duh-really Ben?)
Where did we get such insightful geniuses filling critical financial functions. It doesn’t take an actuarial skill set to see that the Obama government is using the financial wizardry of Greece in implementing their vision for America’s future.
In the Obama YEAR:
Unemployment benefits are up 30 billion
Medicade costs are up 17 billion
Social security Costs are up 23 billion
Medicare cost are up 12 billion
Interest on Public Debt is up 26 billion (31%)
With typical Obama Administration mentality, taxes are once again the answer about to be promoted with a VAT being the new line in the tax list. That list never seems to reach the bottom of the page.
Value Added Tax is explained extensively in Wikipedia. Spend a few minutes looking over the description, but only a few minutes. More will give you a headache needing more than aspirin to ease.
The Value added Tax originated as a concept in Europe after WW1. It was first implemented by France in the middle 1950s. You would have to be French to embrace this system. The French are great at complex engineering solutions but I have never thought of them as economic leaders. Capitalism has not been their strong point or interest. Maybe the Obama gang will feel better with V.A.T. as another step in their, European Socialist leaning, answer book.
Get ready. The next Volker step will be a giant one. It may however be a useful one. Gary Hubbell in a recent article feels that the unchecked Liberalism of the Obama Administration will stimulate America to send them into the dark recesses of political relevance.
There is hope in November.
