It’s pretty much impossible not to like Herman Cain. He is the antithesis of a standard politician. Straight talker. Gets to the point. Speaks in specifics rather than generalities. Seems like the kind of guy you’d sit on your front porch having a beer with and listening to the ballgame. Yet he’s the CEO of a major corporation and is being taken more seriously each day as a legit contender for the GOP nomination.
Clearly, this has become the anybody-but-Romney campaign. Bachmann and Perry have had their moments in the sun and fallen back. Ron Paul wins straw poll after straw poll, yet never garners serious consideration. Heck, even Trump got his fifteen minutes. Now it is Cain who has benefited from a favorable Florida poll and some good debate performances to take over the headlines. This brings up the obligatory “is Herman Cain the true conservative the GOP has been searching for?” questions. The answer in a word? No.
Everyone knows by now that Cain was a former Kansas City Fed Chairman. He supported TARP and he is against an audit of the Fed. That’s enough for me right there to reject him. The Federal Reserve has played the CENTRAL role in the destruction of our monetary system since its creation in 1913. Their policies have enabled our boom-bust cycles. Clearly they have failed in their mandate to achieve full employment. They have certainly provided endless liquidity to the credit markets for the other half of their dual mandate.
Credit market liquidity has been an abject failure. Everything the Fed does is geared toward rewarding the big banks, including foreign central banks. Crony bailout-ism if you will. They have essentially ignored small business. Is it any wonder than why we still have 9% unemployment and a stalled economy? Rather than getting into a diatribe exposing the Fed, I merely wish to highlight the extreme need for America as a whole to see the pivotal role the Fed has played in the run-up to our current dilemma. An audit is absolutely crucial and Herman Cain doesn’t want one because he is one of them.
How about his 9-9-9 plan? It’s that last 9 that is a killer. A 9% national sales tax. The FAIR tax. Theoretically designed to replace the income tax. Not in Herman Cain’s plan. It will supplement the 9% income tax along with the 9% business tax. Not to say nothing in his plan is without merit. Abolishing the IRS? Hell yes! Providing another avenue of taxation for Congress to manipulate? Hell no!
To have any merit at all, a VAT tax or FAIR tax or national sales tax or whatever you wish to call it would have to be superseded by a repeal of the 16th Amendment. Dream on. Congress voting to voluntarily give up control of the purse strings? Not gonna happen. But let’s say they did pull it off and repeal the income tax amendment and abolish the IRS to boot. What could be wrong with that?
History, that’s what. History shows us what happens when a nation institutes a national sales tax. It only proceeds in one direction, up and up. Europe is the poster child of what can go bad when you institute this type of policy. Only the very naive would buy into the notion of insanity and think the same thing wouldn’t happen here. The 9-9-9 plan merely succeeds in providing government with an alternative set of tools to accomplish the same thing they are already doing. Taxing and spending us into oblivion.
Some economists such as Laffer and Hauser have developed models to illustrate the effects of taxation on government revenue. The Laffer curve shows that increasing rates too high results in lower overall revenue. Hauser shows that the Federal Government averages roughly 19.5% of GDP in revenue no matter what the tax rates are. A national sales tax throws out the Hauser Law. Just look at the percentage of personal income the Europeans confiscate and it’s easy to see why we don’t want to go down this road. The Feds confiscate about one out of every five dollars we earn now, why would we want to give them the tool they need to get past the built-in roadblock of 19.5% that exists now? Increasing revenue and subsequently the power that comes along with it is the goal of these big government, establishment politicians.
As I said, not all of the 9-9-9 plan is without merit. Eliminating the payroll tax is wise as it simply eliminates an accounting gimmick used by the government to uphold the myth of the social security trust fund. Social security benefits are already paid directly from the general fund, so it may help shed light on this tax scheme as well.
So, for me, I’ll stick to having that beer with Herman Cain on the front porch rather than electing another big government, establishment candidate into the White House. We really need to elect a candidate that we can support without qualifications or preconditions. Without reservations. Without compromises. Herman Cain is not the one.