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PRESIDENT SIGNALING NO DEBT DEAL WITHOUT TAX HIKES
Tobin Smith: Look at what's happened in every state that has tried to raise marginal tax rates for the "rich." 18 out of 18 times, it didn't raise tax revenues; it suppressed revenues and suppressed the GDP of those states. Now, we're trying to do that nationally and that hurts the economy. You grow the pie bigger. That's how you get more tax revenue. We're just missing the boat.
Caroline Heldman: What's happening at the state level is not necessarily what would happen at the federal level because they are able to coin their own money. With President Obama wanting to tax the top two percent, he would be restoring those prior rates. From what we know under President George W. Bush, we had the slowest job growth in 70 years even though he gave two tax breaks to the wealthy. President Obama extended the tax breaks and the last two years we've seen stagnant job growth as well. So the relationship between those two is somewhat mythical. Trickle down doesn't work so I'm glad that President Obama is going after the top two percent.
Eric Bolling: The top two percent pays 44 percent of all tax revenue collectively. Meanwhile, 43 percent of Americans don't pay a dime in federal income tax. If Mr. Obama wanted to create jobs, he should clarify the tax structure, drop the corporate tax rates because when you drop the rate, you grow the economy. When you grow the economy, you grow tax revenue.
Jonas Max Ferris: President Obama could be talking about spending cuts, but he doesn't want to talk about that as much as he wants to talk about the tax hikes. Economically, either one, if done at a large level, which is what is going to be required to balance the budget, is going to cause job losses. The states have cut a lot of people in effort to cut costs and not raise taxes as much as they could have raised them. That leads to higher unemployment rates. So, I think it is going to be a blend of both. Both, whether you close the gap with higher taxes or cutting spending, are going to lead to job losses. That's what is going to happen. People are going to be spending less and you're going to be taking money out of their pocket one way or the other.
Gary B. Smith: Tax hikes will absolutely lead to higher unemployment. In 1990 the government imposed a luxury tax on high-end items-luxury cars, yachts, etc.-and the economic report that came out in the yacht building industry alone was a loss of 7,600 jobs. That's what you get. If you put higher taxes on the rich, which are already paying almost 60 percent of the taxes in this country, the limb is going to break at some point. These millionaires and billionaires who are making all this money, who President Obama wants to demagogue, are going to stop paying. They're going to suck in income; they're going to hide the income as best they can, and there will be job losses.
FOOD PRICES STILL RISING WITH MORE COMPANIES WARNING THE PRICES WILL CONTINUE TO GO UP; HOW BAD WILL IT GET?
Eric Bolling: It's going to get a lot worse. We have three ways out of this. We can print more money. If you print money you could do a QE3 to pay off some of the debt and prices are going to continue to go up because you devalue the dollar. If you borrow money from China, or somewhere else to pay off the debt, prices are going to go up. If you tax people more, prices are going to go up because people are going to be chasing after the same amount of goods that they're paying more for. Any way you slice this, there is only one way to bring prices down. Government has to get smaller and it has to cut spending.
Caroline Heldman: The bumper crop of corn, which is in just about every food product we consume and it is a fact that we have a bumper crop... so prices should be coming down. It's interesting, General Mills is anticipating about a 10 percent increase in their costs, as they did this past year, but they saw a 51 percent increase in their profits. So, what we really see are major corporations taking advantage of minor increases to exploit consumers.
Gary B. Smith: We have a lot more options than we did five or ten years ago. You could go from the General Mills brand to the Safeway brand and now even Safeway has a brand below their store brand. I agree with smaller government and the government should stop printing money, but I disagree with the numbers. You said all those things-housing, gasoline, food-have gone up. They did go up, but food had its lowest increase of the year. This is from the most recent CPR report: housing, for example, is only up year to year a little over one percent. The inflation overall, at about 3.6 percent, is mild. It's been that way for the last few months.
Tobin Smith: There's inflation and then there's government interference. The number that got me this week was, for the first time ever, we used more corn to create ethanol than we did to create food. The ethanol mandate that our government put in this system is a perfect example of how prices because there's not enough corn to feed everybody because we've mandated this crazy scheme of ethanol. We have a situation now where we'll probably get some price lessening. It's about a six month lag in food and corn. But, as long as the dollar is worth less and it is more expensive to trade and buy commodities, we're going to have high commodity prices because the dollar is going out of value.
Jonas Max Ferris: It is not going to get much worse because when they raise taxes, which is ultimately going to happen, and/or cut spending, commodities are going to go lower. When the government takes more of your money, you're going to buy less stuff. You have less money after every month, you're not going to buy more of these products, you're going to buy less of these products. Lower demand. I have never heard in economics that prices are going to go up when we raise taxes, that's just the craziest notion I've ever heard.
CRITICS SAYING PRESIDENT USES SOCIAL SECURITY AS A "SCARE TACTIC" IN DEBT TALKS; FACT OR FEAR?
Gary B Smith: Let's check the facts to see what makes sense. We take in as a government 200 billion a month. Social Security is about $50 billion that we spend. The interest on the debt is about 29 billion. Medicare and Medicaid are another 50 billion. Throw in what we spend on the military, that's about another 6 billion. That leaves 39 billion. Those are the facts. I have trouble figuring out where President Obama's coming from.
Jonas Max Ferris: Social Security is the number one cost. The only thing we can't not pay is the interest. That's the only thing you can't touch. Everything else is up for grabs. It's the number one thing we spend money on. To avoid the number one cost of government when running debts is silly. We should probably cut it back a little. People will get mad. This is the program that needs trimming to balance the budget. Let's be honest about it. It's not going to come out of the NASA budget. They already closed that.
Eric Bolling: There's no chance for seniors to get their checks. There's $2.6 trillion in the Social Security trust fund that's supposed to be there. If Obama has raided the fund, it's not our fault. That means it's got to come from someone else. These people have a right to be paid. They should be paid second, right after the military and the debt and the rest is up for grabs.
Caroline Heldman: It is an overstatement to say it couldn't happen because we're talking about a 44 percent cut in remaining programs if we don't raise the ceiling. That could include social security and Medicare. I'm sure the President is very specifically focusing on that because elderly people turn out to vote. What's more likely is that unemployment will get cut, housing will get cut, food stamps will get cut so that those who need it the most will see their programs gutted.
Tobin Smith: I'm so fed up with this that I say cut it. Give people the visceral sense of what it is to have forty percent of our spending coming from real money and borrowing 60 percent of it. Cut it, let the chips fall where they may, and then we'll find out what's really important in this country.
Gary B Smith: Hot summer means more beer! "SAM" brews a 30 percent gain in 1 year
Tobin Smith: $250K flying car not a bargain! "SAVE" lands 40 percent profits by January
Eric Bolling: Help cities clean-up debt mess; "MUB" shows a 10 percent gain in 1 year
Jonas Max Ferris: Styrofoam ban push outrage pushes "HUN" up 20 percent in 1 year