Sunday, February 27, 2011

How to cover a $1,500,000,000,000 annual deficit

originally posted 2-22-11

I don’t know how to do this.  In fact, my background is in private business and economics and I have never been in a situation where it is possible to spend nearly 1.8 times your revenue and have people willing to extend you credit for a 10 year term at 3.5%.  I think maybe the people buying these bonds and allowing this entity to spend in this fashion understand that we are a proud people……

And there are certain rights that are inalienable like SSDI, early retirement, food assistance, housing assistance, transportation assistance, job programs, 99 more weeks of unemployment, earned income tax credit for people who don’t pay taxes?
Well, while I can’t answer my first question on what you do about a monster like that, I can tell you something that you don’t do.

Obama budget includes mining royalty

    “I don’t think these will be seriously considered. We’ll just have to see how it works out going forward,” said Carol Raulston, senior vice president of communications for the National Mining Association.ELKO - President Barack Obama’s new budget proposal would add a 5 percent gross royalty to hard-rock mining on public land and go for additional mining revenue, but an industry spokeswoman doubts the proposal will succeed.
The Obama budget proposal includes three separate taxes aimed at the hard-rock mining industry, including a not-less-than 5 percent gross royalty, changing claim fees to leases for federal land, and creating a separate fund for abandoned mines cleanup.
“The three all together would certainly hurt the competitiveness of the U.S.,” Raulston said Tuesday.
The new charges and tax hikes on oil, gas and coal could generate $3 billion over 10 years for the government, according to news reports.
The U.S. Bureau of Land Management states on its website that the proposed budget “assumes a legislative proposal to reform hardrock mining on public and private lands by addressing abandoned mine land hazards and providing a better return to the taxpayer from hardrock production on federal lands.”
Raulston said the leasing system for hard-rock mining would probably require bids and more money up front, and this could affect have an impact on mineral exploration.
Oil and coal already are handled through leasing, but mineral exploration is through claims on public land.
A gross royalty would impact the mining industry, which has been willing to pay a net royalty that allows deductions for such things as equipment and reclamation costs, but opposes any gross royalty.
end article
This will be a disaster if passed.  We are about to enter a phase of “Resource protectionism” in the world.  We are already drastically under mined compared to the rest of the world while we pay and fight for minerals that we have under our feet.  The ROI on the mining business has been mediocre at best for a generation and any tax on it going forward is absolutely insane.

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