Monday, July 2, 2012

Consumers, Congress, Constitution and Courts ... The 4 Cs


The 4 Cs of Consumers, Congress, Constitution and Courts doesn't include the P, aka the Presidency, and that's very much intentional on my part. Herein we'll stay with the really important stuff instead of today's headlines and talking points.

(1) Consumers aren't buying much these days. My guess is that they won't be buying much for some time to come either.

(2) Congress seems to be getting a pass in the discussion on ObamaCare, debt and deficits. What's a tax or penalty is the question du jour. Why don't we talk about how much Congress spends instead?

(3) The Constitution lays out the pecking order of our limited federal government's powers clearly: of the three branches, the legislative branch, aka Congress, is by far the most powerful. The other two branches aren't even close. Congress makes the laws, approves the taxes, allows spending, creates debts and deficits and so forth. We the People elect our congressional representatives directly, and frequently. The House originates the tax bills and laws, and we get a shot at them every 24 months.

The executive branch, aka the Presidency, is not nearly as powerful as the legislative branch, other than in defending the nation's security.

Meanwhile, the judicial branch, aka the Supreme Court, is in essence the passive branch. It makes no laws and spends no money, nor does it raise or lower taxes on consumers.

Yet all the discussion lately is about why the Supreme Court did or did not save us from disaster with last week's ruling on ObamaCare's constitutionality. We need to save ourselves by electing the right people to represent us in Congress. To repeat, they are the ones who make the laws and authorize the spending. When they spend our money, we have left remaining to spend or save for ourselves. We can't spend the same dollar twice.


Europe released unemployment number today. They're at 11.1% and rising. They're also in recession.

Here in the U.S., consumers are reluctant to spend and borrow. Too much debt, too few jobs and too much uncertainty about the future. Thus, economic growth is slow and unemployment is high. A vicious circle leading us back to weak consumer spending. And so on.

But that doesn't slow down Congress and government spending. In fact, Congress passed ObamaCare in the midst of an awful worldwide recession. And contrary to what you may hear, it won't pay for itself. That simply never happens. But even if it did, it would do so by extracting money from consumers to do so. And that means a weaker economy as consumers can't spend what they don't have.

If government spends more on programs like ObamaCare, which it will, Congress will have to tax consumers more, at least someday. In the interim, government will either have to borrow more from China or inflate, aka debase, the U.S. currency instead. Both will weaken consumer spending.

Government programs that spend more and don't pay for themselves, whether they're called taxes, penalties or whatever, take more money away from consumers. Thus, government spending creates more burdens for consumers, either in the form of present or future taxes.

No wonder consumers aren't spending freely these days. We're either paying off debt or worrying about the economy and the value of the house we bought with a mortgage which is now "under water."


This is the stuff we'll be writing about in coming days and posts. We won't be spending time trying to dissect Chief Justice Roberts' opinion or what will happen in the upcoming presidential election.

Besides, the big stuff will concern who wins what seats in Congress, and what, if anything, We the People will choose to have them do about our weak consumer spending and extremely strong and ever growing tendency toward big and getting bigger government.

Hint: It's all about Consumers and the Congress. The Consumer, aka free
American citizen, is the 1 C that matters most.

What Congress does comes in a distant 2d, of course, but that depends very much on what #1 instructs or doesn't instruct its elected representatives to do.

If we lead, they will follow.

If we let them lead, we're in for more of the same, and that's a shame.

At least that's my view.

Thanks. Bob.

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