Tuesday, August 16, 2011

Warren Buffett talks with Charlie Rose, America listens


Warren Buffet did an hour long interview last night with Charlie Rose.  You can listen to it here.  As always,  Warren speaks in common sense terms.

Key points:
  1. If the committee of 12 fails in coming up with a credible budget plan,  our country will morph into a pit of hopelessness. We might already be in the pit.
  2. In a very high percentage of cases,  the very rich are paying a smaller percentage of their income in taxes than the people cleaning the offices of the rich.
  3. Since 1992,  the very rich have had almost a 10 fold increase in capital gains,  taxed at the very lowest rate,  and not subject to payroll taxes.
  4. Often lost in the discussion about taxes,  payroll taxes account for almost 1/2 the taxes raised by our government,  yet the rich don't pay payroll taxes on the vast majority of their income.
  5. If you make money with money,  you pay no payroll taxes.  Make money with muscle,  you wind up paying payroll + income taxes.  This is the source of the inequity.
  6. Buffett never had one person decline to invest as a result of the existing tax rate.
  7. People are very upset with how the government works.
  8. Tea party is simply insane - causing the American people to be losers.
  9. The housing bubble is the primary source of our current economic problems.  We won't come back until we work off the excess of housing.
  10. Household formation is the key to our economic revival. Unemployment will fall appreciably when we get back to building 1 M homes a year.  Level now at 500 K.
  11. All Buffett's businesses getting consistently better - except those tied to housing.
  12. Buffett thinks economy will turn faster than Federal Reserve Board currently forecasting.
  13. Changing immigration policy to allow more immigrants into our country could help excess housing situation.
  14. We need to be collecting about 18 - 19% of GDP in taxes.  Currently collecting just shy of 15%.  We need to move spending down to 20 - 21%,  taxes up to 18 - 19%.
  15. Doesn't matter if cut taxes, spend more, each is stimulus.  Government running deficit is stimulus.  Currently,  stimulus is at record 10% of GDP (deficit of $1.4 T on about $14 T annual GDP).
  16. Our nation does not have confidence in our leadership. We no longer believe in what our leaders say or do.
  17. Our free market system has led to extremes.  We are becoming a nation of haves and have nots.
  18. Everybody in this country owes their own good fortune in some way to the rest of the country.
  19. Warren Buffett's tax situation:  $62 M Adjusted Gross Income,  $39.8 M Taxable Income, $6.9 M Federal Tax.   Payroll taxes: $15 K.  Total tax rate 11.1% on Adjusted Gross Income,  17.3% on Taxable Income.   I pay taxes at a significantly higher rate than Warren Buffett.  And I suspect you do as well.  SIGNIFICANTLY HIGHER!  How is this fair?
  20. Republicans are basically communicating ... "the country be damned".
  21. We need to means test Social Security.
  22. 60 million Americans live in households where the income is $21 K or less. If we're going to cut spending on these households,  then everyone should be made to contribute.  A rich society should think about these people every day.
  23. We need drastic downside incentives for corporate executives,  and we have not tackled this issue yet.
  24. Warren's businesses investing a record $7 Billion in capital investments this year,  almost all in the US.  +$1 B more than last year.
Bottom line - This interview confirms and solidifies my anger at my Republican Party.  We ran our economy into a ditch.  We under-taxed the wealthy.  We declared unfunded wars.  We spent money like drunken sailors.  We ignored problems in the costs of education,  health care,  and energy.   And now,  to pay for our incompetence,  we propose to leave the super-wealthy untouched while we kick the middle class in the teeth and then shove them over a cliff.

I deeply deplore the worthlessness of my incompetent North Carolina Republican Senator Richard Burr.   This man was central in making a mess of our country.  And in his steadfast protection of the super-wealthy and his desire to screw middle class America is just reprehensible.

North Carolina deserves better than our worthless Republican Senator Richard Burr.

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