DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
IN FOCUS: NEW CONCERNS "FISCAL CLIFF" DEBATE IS HURTING ECONOMY
STEVE FORBES: They want us to imitate France-raising taxes, David, except in wartime, is always a bad idea, but especially when you have a weak economy. It hurts productive investment, it hurts risk taking, it hurts success, so it slows the economy down. In the name of helping us, they're hurting us. It happens every time.
RICK UNGAR: I wonder how Americans are going to react when they actually understand the data. Fascinating thing available this week from the tax foundation, you can find it at their website, it's a calculator that shows you how much in taxes you'll be paying. It's fascinating. Let me tell you what we discovered because it's remarkable. The actual increase in taxes for those earning $200,000 to $300,000, those we're told are the job creators, is $199 more a year; $16 a month. It won't even cost you one mocha java latte every week. This is according to the tax foundation, go look it up.
ELIZABETH MacDONALD: The numbers that Rick is talking about are the people who sell Chochis on Ebay. The real job creators are the million plus class and that's about $689 billion that's going to be subject to higher taxes. Look, the idea that taxes create jobs is an issue Margaret Thatcher's aid has it right. How do you make the poor richer by taxing the rich and taking the money away from the small business job creators in this country. They did not cause the financial crisis, the entrepreneurial class did not cause the financial crisis. To give the government more tax revenue, you're not going to get magic beans that are going to sew jobs somehow.
MORGAN BRENNAN: I think the bigger thing is tax cuts being extended out or taxes being raised, what ever the case may be, we just need to get to some sort of agreement. I think a lot of companies are holding back on hiring simply because they don't know what the end of the year is bringing. That's the bigger issue. But, going back to EMac's point, I actually agree. I think small businesses could get hurt by taxes being raised, which is why I think the very wealthy can afford to pay more taxes, but I think we need to redefine wealth. I think the cap of $250,000, I think that needs to be raised up and I think a tax hike is possible for the wealthiest, but maybe not as extreme as it is right now.
MIKE OZANIAN: David, all we have to do is go to George Bush's presidency. Facing headwinds of the crash of the Internet bubble and the 9/11 terrorist attacks, he implemented a series of tax cuts, the last of which was signed into law in May 2003. From that point, from the end of January 2009, the end of his presidency, his administration created 3.7 million new jobs. Seven times more than have been created under President Obama's reign of tax terror.
VICTORIA BARRET: I think that if we hike taxes on the so-called "rich," you end up just hitting small business owners. Lawyers and doctors who are making above that threshold, which probably don't feel very rich, especially if they live in the costal cities like San Francisco, $250,000 if you have a family of four, does not make you feel very rich, unfortunately. What you'll have is the super-mega millionaires are going to figure out ways to evade those taxes. They've got clever people who are going to help them do it. And, you're going to see just an overall compression in entrepreneurial activity and also, therefore, in job growth. The problem here is that entitlement spending and interest expense in this country is set to exceed revenue within the next 15 years. We need to focus on the spending part of this, rather than try to take money out of the private sector to fund entitlement spending that has just spiraled out of control over decades.
UNION PUSH FOR NEW "BILL OF RIGHTS" RAISING COST CONCERNS
STEVE FORBES: The original Bill of Rights is to protect us from an over-weaning and over-powerful government. This Bill of Rights guarantees more government and we've seen what that's done in Europe. We need freedom. That's how you enable people to get ahead and improve your lot in life. Not having the government guarantee things that they can't deliver on, except at the expense of especially young people. Look at the youth unemployment in France and Spain-over 25 percent. They have wonderful guarantees, but they wrecked the economy in doing so.
RICK UNGAR: It's an intellectual exercise it will never happen because you need constitutional amendments to make it so. However, there's one thing he did say that I liked. I would love to see health care become a right, not a privilege. We are the only industrialized country where owing a gun remains a right and health care a privilege. I'd like to see that change.
VICTORIA BARRET: If you look at France as a wonderful experiment when you guarantee rights the outcome you see very high unemployment, you don't see job growth, you don't see entrepreneurialism and that's what makes America so unique. We should be doing things to guarantee more of that instead of doing things to protect jobs even though it doesn't protect anything except maybe lawyers who will enjoy lawsuits out of this.
MORGAN BRENNAN: No, but that's what I like about this second bill of rights. This is more of an intellectual exercise than a push to add amendments to the constitution. I think this is interesting because the way it's worded is so ambiguous. You can take them many different ways which is why I think-it's not about the unions it's about trying to get both democrats and republicans to think about the issues in a different way instead of all their grandstand bipartisan nonsense.
ELIZABETH MACDONALD: It's all about the unions; by the way Trumka doesn't mention his own right to use for his member dues to go on junkets but that aside the issue is who enforces these rights? This whole attitude that it takes a government village to provide you cradle to grave protection is so wrong. The middle class wants opportunities, they want jobs they don't want a life line. They don't want this kind of mucking around between the unions and the government.
MIKE OZANIAN: The entire Obama administration is an intellectual exercise where it sounds good in theory but it failed in the real world. The Federal Reserve has two mandates, one of which is maximum employment; it hasn't been able to get the unemployment rate under 8%. If they can't succeed, how is this piece of paper supposed to do that?
FLIPSIDE: JUMP IN NEW HOME CONSTRUCTION IS BAD FOR HOUSING MARKET
ELIZABETH MACDONALD: About 11-12 million homes are in negative equity meaning that's 25% of mortgages out there that are tipping. There is a big fat inventory of homes that are going to be defaulting or delinquent. I propose a new green job program- rehab and refurbish dilapidated old homes. That's how you're going to get job creating in this country because we have a problem of suburban poverty right now from these derelict homes that are not being taken care of.
MORGAN BRENNAN: Going back to Emac's point, good news that's actually already happening. The private sector has been the one fueling that. We need to put these construction numbers into perspective even though they have come up and are the highest we have seen since 2008. They are still 70% off their 2006 peak and they are 60% down from healthy levels that we saw in the early 2000s and the late 1990s. I'd say we have a long way to go before construction starts become an overbuilding issue.
MIKE OZANIAN: Existing home sales are at a 2 year low we learned this week. I agree with EMAC, I think the reason why home builders are building new homes is because the housing market is subsidized by taxpayers. Over the past 3 years, Fannie Mae and Freddie Mac have burnt over $80 million of tax payer money. The homebuilders know that these homes will be sold. The question is who foots the bill? Many times private investors come in and make profit on them by buying them on the cheap. Cut the big subsidy and you'll cut the big inventory on homes.
VICTORIA BARRET: Ideally yes that would be the case but we aren't going to see it. You're going to see demand for homes in new areas where those old foreclosed homes don't exist. This is soft demand, it's not some dramatic up swell of demand and its healthy demand. Yes the government is still heavily involved in the mortgage market. But it's not the funny money we were seeing back in 2006-2007. I think that this is moderately good news.
STEVE FORBES: Overall this is slightly bullish, but remember this is from very depressed levels. If the government hadn't intervened too much and let the government clear 2 years ago we would be having a robust housing revival across the board government hurt did not help on this one.
INFORMER: "FEEL BETTER" STOCKS
MORGAN BRENNAN: Pitney Bowes Inc (PBI)
52-WEEK HIGH: $22.63
52-WEEK LOW: $12.81
ELIZABETH MACDONALD: Flowserve (FLS)
52-WEEK HIGH: $122.45
52-WEEK LOW: $66.84