Swine Flu - Don't Believe the Hype

Flu kills massive numbers of people every year. This flu is a bad one but probably not as bad as the authorities would like us to believe.

Here's a clear head - Ron Paul US congressman on the Swine Flu

Brings a Global Warming to the Heart

Does it get any better than seeing Al Gore getting his bottie slapped in a house committee hearing? FINALLY some politicians are waking up to the real reason behind the Global Warming hysteria - another bubble economy not unlike the one that's just popped - derivatives and credit default swaps. Cap-and-trade is just MORE TAX resulting in more jobs exported to low wage countries all based on junk science and stupid movies swallowed whole by a celebrity-worshiping public.


Gore is exposed trying the usual "guilt by association" techniques (moon landings) and scare tactics (Bernie Madoff). What a shame it has taken these politicians so long to wake up to what this has been all about. At least they're way ahead of the me-too-cheer-squad in Australia they call the Labor Party.

For the good oil on Gore's real motivation check here

Here's the YouTube of the hearings. Enjoy.
Fmr. Vice President Al Gore denies that Ken Lay and other CEOs developed carbon scheme: "I didn’t know him well enough to call him ‘Kenny-boy’."

One can hear what is presumably former Vice President Gore breathing heavily into the microphone in a subtle but immature protest over being questioned about the scientific conclusions he has reached about global warming.

Soon people will realise they were hyped about Global Warming by a compliant media and junk science supported by what appear to be respected international organisations like the UN/IPCC. This might cause them to look further into other tragedies in our recent history where the exact same techniques have been used to fool to the world's population and to silence descent.

The Numbers Don't Lie

I see that Labor is “leaking” that the budget deficit could be as high as $50 Billion. This is about right when you look at the numbers.

Here’s the ABS report on tax revenues for the last few years. It features never ending increases in taxation income from all sectors – not one tax area declining – wouldn’t we all love a revenue side like that! The Howard government benefited from ever increasing taxation revenues as the economy boomed.

Look at the Commonwealth’s profit and loss for the last two quarters:

$m
	Sep Qtr 2008	Dec Qtr 2008
GFS Revenue
Taxation revenue (a)	60,829	73,736
Sales of goods and services	1,578	1,557
Interest income	1,651	1,386
Dividend income	1,996	366
Other	1,245	1,958
Total	67,298	79,003
less
GFS Expenses
Gross operating expenses
Depreciation	680	712
Employee expenses	5,648	5,729
Other operating expenses	13,741	15,161
Total	20,070	21,602
Nominal superannuation interest expenses	1,519	1,629
Other interest expenses	1,105	1,072
Other property expenses	0	0
Current transfers
Grant expenses	21,527	22,541
Subsidy expenses	1,883	2,018
Other current transfers	22,004	30,968
Total	45,414	55,527
Capital transfers	1,960	1,435
Total	70,067	81,265
equals
GFS Net Operating Balance	-2,769	-2,263
less
Net acquisition of non-financial assets
Gross fixed capital formation	1,143	498
less Depreciation	680	712
plus Change in inventories	25	123
plus Other transactions in non-financial assets	30	34
Total	517	-58
equals
GFS Net Lending(+)/Borrowing(-)	-3,286	-2,205

We see here that before the last two payments to bludgers which has added to government debt rather than going through these books, that they are already running a $2-3Bil per quarter deficit. Let’s assume that expenditure will not decrease or increase. Or, any extra payments for increased unemployed will be offset by some minor cuts in services or increases in taxes.

Cost blow out is not the problem – it’s the revenue side. It gets a great deal scarier here. Revenues from everything simply have to decline.

For the full year 2007-8, government revenue was made up of the following:

	2007-08
	$m
Taxes on income
Income taxes levied on individuals
Personal income tax	124,212
Prescribed payments by individuals	0
Fringe benefits tax	3,796
Other income tax levied on individuals	0
Total	128,008
Income taxes levied on enterprises
Company income tax	66,661
Income tax paid by superannuation funds	11,916
Prescribed payments by enterprises	0
Total	78,577
Income levied on non-residents
Dividend withholding tax	408
Interest withholding tax	1,179
Other income taxes levied on non-residents	409
Total	1,996
Total	208,580
Employers payroll taxes
Other employers labour force taxes
Superannuation guarantee charge	381
Total	381
Taxes on property
Taxes on financial and capital transactions
Government borrowing guarantee levies	15
Total	15
Taxes on the provision of goods and services
General taxes (sales taxes)	1,105
Goods and services tax (GST)	44,381
Excises and levies
Crude oil and LPG	15,085
Other excises	8,441
Agricultural production taxes	600
Levies on statutory corporations	170
Total	24,297
Taxes on international trade	6,081
Total	75,863
Other	832
Total	285,672

Let’s say the current run rate of revenue per quarter is $67B. Revenue is therefore $268Bil – already down on last year by $17B.

Now let’s look at how the revenues are likely to deteriorate further:

Company tax – this must be at least halved and quite possibly worse if you take into account the accelerate depreciation provisions the government is pushing ($33B)

Superannuation tax – contributions will still be taxed but there will be less of them, however, the 15% tax on capital gains is GONE. Let’s assume that half the income from this tax is the gain part and we end up with a net loss ($6B)

Other Income stuff ($1B)

The next biggie is the GST and here we see the benefit of the government’s largesse coming back to them because all that money they have borrowed and put into the economy as payments to bludgers will come back in part as GST revenue…does it get any better? Given retail sales declines expected, unless they keep borrowing and stimulating, then we should see a marginal decline in GST revenue. I’m picking 5% decline or ($2B)

Fuel excise is determined by the overseas price of oil and the pump price and also reflects the power of the economy. Oil prices have dropped and so has petrol (but not by as much of course) and we're consuming less. I reckon take 20% off or ($3B).

Total lost revenue: $45B

I would expect that the government will raise a whole host of indirect taxes as well as prattle on about how they are going to target the rich to stop them avoiding tax (but not trust funds of course). It will be the usual claptrap.

Add the current run rate of, say, a $10B deficit to the new lost revenue of $45B and we get to around the “leaked” expected deficit figures.

What I am most interested in hearing is the government’s forward estimates which will tell us about what the balance sheet will look like after 4 years – about the end of this recession – so we can see what this whole thing will end up costing the kids.

We have some serious increases in taxes coming that I am sure of!