- Obama has reinstated a missile defense system that Bush supported and Obama scrapped.
- CPAC winds down, and all the media can say is that the GOP is tearing itself apart... of course. Why would they say anything else.
But on top of all that, I wanted to highlight this article: http://money.cnn.com/2013/03/18/news/economy/europe-cyprus-bailout/index.html
In case you haven't heard, here is the quick rundown: The country of Cyprus, in an effort to save itself from a crippling debt crisis and secure new "bailout" financing from the EU, had proposed a tax on band deposits. If a deposit held in a Cypriot held more than 100,000 Euros, it would be subject to a one-time 9.9% tax. If a deposit held less than 100,000 Euros, it would be subject to a one time 6.75% tax. As expected, hundreds of Cypriots fled to ATMs to make withdrawals, and, as expected, this created bank runs.
The outrage has mounted, however, and it looks like a parliamentary move is in place to either reduce the tax rate being implemented or scrap it altogether.
To me, there are three things to take from this:
1. Debt is bad. End of story. It's okay to run up and manage some debt, in a temporary fashion, especially if you will soon have the funds to replay that debt, but crippling debt is just that... crippling. The definition of what is "crippling" is subject to debate, but it's hard to debate away the fact that if a country continues to rack up debt without maintaining the production needed to pay this off (often, as it is done here in the US, the debt is used to pay for social programs that yield NO production in return, further exacerbating the debt problem), eventually the debt will consume the country, and lenders will no longer supply the country with the money it needs to run itself.
2. Imagine if this was proposed here. Could you envision the outrage?! The government seizing the assets (assets that have already been taxed, mind you) of its citizens to run itself - crazy! Wouldn't that be a case of the government usurping the power from the people to simply maintain that power? Holy cow, this would be disgusting. I seriously hope this is never implemented in Cyprus, let alone the US or any other place.
3. People dislike taxes. Period. If you impose more taxes on the citizens, they will react. Rarely is there a time in our modern history where the citizens of a country say, "yes, please, tax me more... I'll just sit back and take it." Look at France in the last 8 months.
What do you think? Please share your thoughts below.
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