Saturday, January 28, 2012

What's the Buffett Rule on Spending and Investing? | All American ...

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President Obama, always on the campaign trail, is now on the road trying to explain why his class warfare strategy is not class warfare. In his State of the Union address, he once again invoked the ?Buffett Rule?, which is little more than a fig leaf to allow Obama to raise taxes. But what about some other ?Buffett Rules??

Spending

What is the Buffett Rule on spending? Does Warren Buffett agree with President Obama that we should spend 150% of what we take in? Did Warren Buffett become one of the richest men on the planet by spending 150% of what he takes in and borrowing the shortfall? I think Buffett?s counsel would be to live within our means; don?t spend more than you take in, but I didn?t hear President Obama invoke the ?Oracle of Omaha? when he submitted his budget to the Senate that was voted down 97-0. I didn?t hear Obama mention spending at all other than to say some nonsense about cutting spending by $2 trillion over ten years. At the rate we are going that level of spending ?cuts? will mean we are $8 trillion deeper in debt ten years from now rather than $10 trillion. We need to cut $1 trillion in spending next year. So let?s hear what Buffett has to tell Obama about spending.

Investing

Warren Buffett is regarded as a masterful investor. What?s the Buffett Rule on investing? President Obama took credit for saving the auto industry. Really? If that is his idea of a good investment why does the price of GM stock have to rise to $52 before the American people?s investment to break even? GM stock is currently trading around $25. How many people are expecting GM?s stock to double in the near future? Or is it more likely that union contracts will once again, drag GM beneath the waves? My research indicates that Warren Buffett does not hold any GM stock. I wonder why? I do know that Warren Buffett made a very tidy profit by investing in Goldman Sachs. Meanwhile American taxpayers, you know, the ones who are under taxed, bailed out that company and many others. How much did Buffett invest in Solyndra? How much money is Warren Buffett investing in high-speed rail in California? Why should the American people believe that someone who has never held a job in private industry (Obama) is suddenly the smartest venture capitalist in America? How big of a portfolio do the real venture capital firms put in the hands of new hire fresh out of college? But this president takes billions of our tax dollars and squanders them on his pet projects and then lectures us how we need to invest in our future when they go belly up. When is Warren Buffett going to tell him to stop?

The Buffett Rule on Taxes

At the State of the Union address we were introduced to the famous secretary of Warren Buffett. She?s the poor woman who pays a higher tax rate than Mr. Buffett on her income. It is estimated that the poor dear makes between $200,000 and $500,000, otherwise she would not be paying double the tax rate of Buffett. That could put her solidly in the top 1% of earners in the country, if she is at the high-end of that range (the top 1% is earnings above $343,000). So Barack Obama actually lamenting that the top 1% is over taxed? Of course not. It is not about who is paying too much, it is about who is not paying enough.

The problem is spending, plain and simple. There are not enough rich people in America, even if taxed at 100% to close the budget gap. What Obama is doing is class warfare. Let?s get people angry enough at the wealthy so that Obama can then link the wealthy to the Republicans and sneak back into a second term.

If Obama thinks he is playing by the rules, Buffett?s rules, then he should at least play by all of them.

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Originally posted at Liberty?s Lifeline.

Bill O?Connell lives in New York and is the author of the blog at http://libertyslifeline.com and the new book Liberty?s Lifeline.? Feel free to follow him on Twitter and at the book?s fan page at www.facebook.com/libertyslifeline

Source: http://www.allamericanblogger.com/19567/whats-the-buffett-rule-on-spending-and-investing/

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