Rick Perry has come out with his own tax plan proposal.  He wants to have a 20% flat income tax with deductions.  Deductions would include $12,500 for each individual in the family.  That would mean that a family of four would pay no income tax on the first $50,000 of earnings.

Perry has also said that you can stick with the current tax plan in place and pay taxes that way if it is more beneficial to you.  As a libertarian, I like choice.  I would rather the choices be much better, but I suppose that two choices are better than one.  Without knowing the details, because you would have a choice of the current tax system and his flat tax proposal, I would vote “yes” on this plan if I were in Congress, although not with a lot of excitement.

Now let’s get to Rick Perry’s plan to drastically cut spending.  Oh wait, there is none?  Like so many politicians, he wants to balance the budget in about 10 years.  Except Perry wants to do it by 2020, which would make it 9 years.  I guess that might make him 10% better than the average politician.  Or maybe he is lying 10% more than the average politician, if that is possible.

That is the problem here.  We can shuffle around the tax code all day long here with a 20% flat tax or some 9-9-9 plan that raises taxes on the middle class.  But our situation will not be vastly improved until something is done about spending.

The federal government is spending nearly $4 trillion per year.  About 40% of this spending is from borrowed money, whether it is from the Fed, China, Japan, or individual investors.

If we are going to have a healthy economy that has sustainable growth, the government has to drastically cut spending.  Aside from Gary Johnson who is polling at 1% or less, Ron Paul is the only Republican presidential candidate who has a plan to cut spending significantly.  He is proposing a cut of $1 trillion in the first year.

As long as the government keeps spending nearly $4 trillion a year, it won’t matter much what the tax code looks like.  If the government were to cut spending to less than $2.5 trillion to equal tax collections, the economy would benefit quite significantly.  That would mean that the government would not have to borrow any further money (not counting debt rollovers).  That would mean an additional $1.5 trillion in the free market economy.  That would mean a great deal for businesses and individuals trying to save and invest.

It is easy for these candidates to propose tax plans.  I could propose a plan to eliminate all taxes and we could just borrow $4 trillion a year.  The hard part is to identify real spending cuts.  These candidates are trying to play both sides.  They don’t want to upset anyone with real proposed spending cuts.  I have heard Michele Bachmann say in the past that she would like to get rid of the Department of Education.  That is a small start, but it isn’t all that significant with the overall budget.  Plus, I’m not really sure if she means it.

Except for Ron Paul, none of the major candidates can get anywhere close to a balanced budget.  So they will keep proposing their tax plans that take your money out of a different pocket.

It is not the way the government is taxing me that disturbs me.  It is how much they are taking and how much they are spending.

I am a huge advocate of investing in the permanent portfolio plan as outlined by Harry Browne in his small book called Fail Safe Investing.  While I would encourage people to pick up a copy of the book if you haven’t read it, I’ll give a quick summary of the portfolio.

The permanent portfolio is an investment strategy where you allocate your funds as follows:
25% in stocks
25% in long-term government bonds
25% in gold
25% in cash or cash equivalents

The allocation does not have to be exactly 25% each, but it should stay fairly close.  If one of the investments goes up or down quite a bit and starts to get away from the 25% target, then the portfolio should be rebalanced.  For instance, if stocks go up quite a bit and the stock portion of your permanent portfolio is now 35%, you should sell some off to get back to the 25% allocation.  The 10% you have from selling off the stocks should be used to buy the other assets that fell below 25%.

This strategy is designed to perform well (or at least not too badly) in any economic environment.  During a time of prosperity, stocks should do well.  During an inflationary environment, gold should do well (and perhaps stocks to a lesser extent).  During deflation, bonds should do well (along with cash).  In a recession, it is possible that nothing does well except for cash.  However, recessions are usually short-lived and will turn into inflation, deflation, or prosperity.

I recommend putting at least half of your investment money into a setup like the permanent portfolio.  It really should be much more than half unless you are a big risk taker.  While the permanent portfolio is far from perfect, I really don’t know of any other buy and hold strategy that is as safe.  Even holding cash is not safe because of the risk of inflation and a depreciating currency.

There is an alternative to setting up your own permanent portfolio.  There is a mutual fund that somewhat mimics it.  The symbol is PRPFX.

I still prefer Harry Browne’s permanent portfolio to PRPFX.  The mutual fund takes some extra chances, in my view unnecessarily.  There is a small portion in silver, which is more volatile than gold.  The fund also invests in individual stocks.  Even though the stocks make up a very small percentage, I think it should just buy a broad market index fund and stop picking stocks.

The other thing I don’t like about PRPFX is that it invests approximately 10% in Swiss francs.  This makes no sense for someone not living in Switzerland.  The Swiss franc has been thought of as a strong currency, but to me it is playing unnecessary games.

The permanent portfolio invests in 25% gold to protect against a falling dollar.  If you are an American, living in the U.S., then this 25% gold allocation is there to protect you against dollar devaluation.  You don’t need another currency, particularly a fiat currency.

In early September of this year, the Swiss central bank announced a cap on their currency in relation to the euro.  It has essentially pegged the franc to the euro.  On that day, the Swiss franc fell almost 10%.  That means that PRPFX would have lost 1% on that day alone, just from the Swiss franc portion of its holdings.

I still think that PRPFX is the best mutual fund you can buy for safety and growth.  If you can set up your own permanent portfolio, do it.  However, some people have limitations.  If you have a 401k, you may be able to get a brokerage link account that allows you to invest in mutual funds.  If you can do this, I would suggest you use it and put most of your money in PRPFX.  While I have my criticisms of the fund, it beats the alternatives in most cases.

I attended a seminar today called Nullify Now.  There were a lot of great speakers.  The last two and most notable speakers were Jack Hunter (the Southern Avenger) and Tom Woods.  They are both relatively young and very accomplished.

One thing that stood out to me was their incredible ability to speak, along with some of the other speakers.  Like so many things in life, I think the ability to speak in front of a crowd is a combination of natural talent, training, and practicing.  It helps that both Hunter and Woods are brilliant and well-versed in what they speak about.

There were many different issues discussed, but the main theme of the day was state nullification.  The tenth amendment (part of the Bill of Rights) states that those powers not specifically delegated to the federal government in the Constitution are to be left to the states or the people.  Instead of relying on the Supreme Court and other courts which are a part of the federal government (why would they rule against themselves?), state nullification consists of the states telling the federal government that their law is unconstitutional and thus null and void.  This could be for anything from Obamacare to medical marijuana.

There was a significant crowd there and it was made up of mostly libertarians and conservatives with libertarian leanings.  While there were certainly some radical libertarians in the crowd, I would say overall that the speakers tended to be more radical than many in their audience.  However, most of them were still well received.

One of the things that Tom Woods brought up was about preaching to the choir.  He noted that preaching to the choir is important.  There were a lot of people in that room that needed to hear the message.  If we can get all of the people who call themselves libertarians or claim to have libertarian leanings to actually educate themselves enough to be highly principled libertarians, then the government would be at least half the size as it is now.  These are all people who talk to friends and families about politics.  They tend to be on the right track, but they don’t have the complete package and they don’t always have the most principled answers.

While there was a lot of pessimism in the room (one-world government, collapse of the dollar, etc.), I have reason to be optimistic.  Just the fact that there were well over 100 people attending an all-day seminar on a Saturday about state nullification is enough to be optimistic.

While I think America would be many times better off if the federal government followed the Constitution, I am not one who goes around boasting about the Constitution.  I am more of an Articles of Confederation guy, but that is a topic for another day.  With that said, I like the idea of state nullification. I like decentralization.  We need to use different tactics to gain liberty and reduce government, and state nullification is one of those methods.

If you ever get the chance to see Tom Woods or Jack Hunter speak, don’t miss it.

I have previously written about the benefits of buying a house right now, if you are in the right situation.  One of the reasons I give is that you can take a fixed rate loan for 30 years and pay it back with depreciating money.  Your last payment in 30 years might be the equivalent of a nice dinner (if we are lucky).

With that said, I don’t want anyone to take that as a green light to run up debt.  First, the future is very uncertain and, while I am predicting that we will see some high price inflation (10% or more), this is no guarantee.  It is impossible to predict exactly how the Fed will operate and how the politicians in DC will operate.  It is also impossible to predict how over 300 million Americans will act.

Even if we do get somewhat significant price inflation, this does not justify running up debt, particularly if it doesn’t involve a house or a reasonable investment/ business.

Student loan debt and credit card debt are the worst.  You can not clear away student loan debt with bankruptcy.  Some might consider this an investment, but that is a big leap of faith right now, especially with college graduates having difficulty finding good jobs.

Credit card debt is horrible debt to have, unless you got there because of an emergency situation.  Sometimes you can get low teaser rates, but the rates end up being high.  If we end up with 10% price inflation and you have credit card debt with an interest rate of 18%, tell me how that is beneficial.

Cars are a little tougher.  Most people need a car, particularly to get to work.  Unless you live somewhere like Manhattan, then a car is probably a necessity.  In this case, it is obviously important to have one, even if it means taking out a loan.  However, if you have to take out a loan, it should be based on need and not want.  You don’t need a $40,000 Acura to get to your job.

Debt is usually a horrible burden on people.  It does not give you financial freedom.  Instead, it puts you in financial handcuffs.  Even if we end up getting high price inflation, it is unlikely to end up in hyperinflation.  This means there will eventually be a severe correction.  This will mean deleveraging.  It means that anyone with a big debt burden will be in trouble.

Even as far as houses go, whether it is your primary residence or an investment property, it should be a goal to pay it off.  You can take advantage of the low interest rates now, but it doesn’t mean you should always have a loan.

Stay out of as much debt as possible.  You will be happier for it.

Both the price of gold and stocks have been trading in a fairly narrow range lately.  Gold has been in the $1,600  to $1,700 range since its big fall from the all-time highs above $1,900.  Meanwhile, just as it looks like stocks are headed way up or way down, they reverse and go the other way.

The Dow has been between 10,000 and 12,000 for a while now.  But the remarkable thing is that this range has been maintained with huge volatility.  That is a big range for sure, but it isn’t when you consider that a 300 or 400 point move in one day is not really considered big news anymore because it is happening so frequently.

The other interesting thing right now is the relationship between gold and stocks.  They seem to be somewhat correlated right now.  We have seen this in the past, but then the correlation broke off for a while.  The correlation will probably break again, but it is hard to say if it will be in weeks or in months.

The biggest threat to the gold price right now is the fear of another recession.  I am still bullish on gold in the longer term because of the economic mess that DC has created, but the near term is very hard to predict at this time.

I am in safety mode and I suggest the same to everyone else.  You should have at least half, but probably most, of your investments in a setup like the permanent portfolio as described by Harry Browne.  For speculation, I would add a little bit in the way of gold related investments and a very small short position in stocks.  Also, it wouldn’t hurt to increase your cash position slightly above the recommended 25%.

Again, we should be in safety mode.  We just need to protect the money we have right now and wait for the opportunities.  If you feel your position in gold and gold related investments is low right now, this is a good time to buy.  The price may go lower, but why wait?  You would be better off buying now in the $1,600 range than you would have been buying a month ago above $1,900.

The Republican debate in Las Vegas just wrapped up.  It was held at the Venetian hotel.  As a side note, for anyone visiting Vegas, the Venetian is a great place to stay.

This debate was hosted by CNN.  The moderator was Anderson Cooper.  I never thought I’d say this, but watching CNN was great compared to the disaster that Bloomberg did last week.  At least Cooper made an attempt to be somewhat fair with the time and he did not show his bias like the questioners at the last debate.

The audience seemed to favor Mitt Romney and disliked Rick Perry.  I don’t know if this was rigged at all, but it almost seemed that way.  When the two were battling it out and talking over each other, the crowd clearly favored Romney and even booed Perry a few times.

The issue of illegal immigration came up and there is this strong opinion by most of the candidates that illegal immigration is such a horrible thing.  They characterize these people as criminals (as if every law is just), when a lot of these immigrants are just trying to find work and provide for their families.

Perry attacked Romney for hiring illegal immigrants.  This is absolutely ridiculous.  Romney paid a lawn service company to work on his lawn and that company had illegal immigrants.  Does this mean we are now responsible for knowing who the employees are for every company we do business with, according to Perry?  If I go and buy an iPod at Best Buy, do I have to make sure the person selling it to me is here legally?  If we find out that Perry did business with a firm that hired a child molester, then I guess we can say that Perry hires child molesters.

There was one funny thing in that exchange though.  Romney had a slip of the tongue where he accidentally told the truth.  He said he went to the lawn company and said they can’t have illegal immigrants because he was planning on running for political office.  So, in other words, he was taking what he saw as the morally correct stand because he was running for political office.  If he hadn’t been running for office, I guess he wouldn’t have cared.

I enjoyed Rick Santorum again tonight.  He is horrendous on foreign policy, civil liberties, social issues, and even some economic issues.  However, he attacked some of the other candidates right where it hurt. He attacked Romney for Romneycare.  He attacked Romney, Cain, and Perry for the bank bailouts.  He was effective in taking them down a notch.

Michele Bachmann was ok in some areas and weak in others.  Hey Michele, most people don’t really care about you wanting to make English the official language.  I am getting along just fine with others in my communications without a government law.  I wonder if anybody out there thinks, “oh, if Michele Bachmann would only make English the official language in this country, then maybe more people would read my blog.”

Perhaps I am biased here, but I thought Ron Paul did an excellent job tonight.  He was quite effective on all of the questions and he is starting to hammer away on the fact that the other candidates do not have specific plans to significantly cut the federal budget.  Romney made an attempt to offer a few specifics.  I only wish that Paul had said that even if Romney’s proposed cuts were enacted, it would not amount to much.

Overall, I think Rick Perry was the big loser tonight.  I am still not counting him out because he has a lot of money.  I think one of his problems is that he reminds people of George W. Bush with his Texas accent and his mannerisms.

Ron Paul keeps chipping away with his pro-liberty message.  He isn’t going to have a dramatic rise in the polls like Cain did.  But he will gain a few more converts each day.  We will see if he can get his national poll numbers up to about 15% in the next few weeks.  Paul has a lot of money and there may be a lot more coming on October 19 (hours away as I write this) as there is a big money bomb happening.

I usually wouldn’t spend half as much time focusing on the presidential election, but having a candidate like Ron Paul makes it far more interesting for libertarians to watch.

A few months ago, I was predicting that the Republican nomination was down to 4 players: Romney, Perry, Bachmann, and Paul.  With that said, I must have sensed that Herman Cain still had some hope because I was attacking him before he became the talk of the town.  I have also attacked his 9-9-9 plan more recently.

While Cain’s chances have certainly improved, I still don’t see a high probability of Cain being the Republican nominee, despite his current status as a front runner.

Ever since Michele Bachmann barely beat out Ron Paul in the Iowa straw poll, she has taken a beating in the polls.  She is in the single digits in most national polls now.  She is down, but I am not counting her out yet.  She seems to be a bit better than most of the other candidates on economics, but she still does not offer much in the way of specifics.  My biggest fear about Bachmann is that she turns out to be like Reagan where she speaks libertarian rhetoric on economic issues, but her policies don’t reflect it.

Newt Gingrich has had a bump in the polls.  He is certainly a good performer in the debates and a lot of conservatives like him, even though they should know better after his record as Speaker of the House.  I still think it is highly unlikely that Gingrich will get the nomination because most people, even Republicans, sense that he could not beat Obama in the general election.  I think this is one thing where most everyone is right in that he wouldn’t beat Obama.

I don’t see Huntsman, Santorum, or Gary Johnson being major players at this point.

That leaves us with Romney, Perry, and Paul.  Romney is the establishment’s choice.  He is pro big government across the board, but he will say what he needs to in order to appease the conservative base, or at least not anger them too much.  Romney is the founder of Obamacare.  If there is one thing that virtually all Republicans agree on, it is their hatred of Obamacare.  And yet the nominee for the party is going to be the inventor of Obamacare?

I am not saying that Romney can’t get the nomination.  He is not being attacked by Sean Hannity or any of the other popular conservatives with big influence.  These people might be afraid to attack him in case he does get the nomination.  Another good possibility is that they really don’t mind his message too much.  Regardless, most Tea Party people are not Romney supporters.  They see this as a fight for the Republican Party and a Romney nomination would mean a loss for the Tea Party.

A lot of people are starting to write off Rick Perry.  I am not.  The fundraising numbers are coming out for the third quarter and Romney and Perry have the biggest numbers by far.  Ron Paul is in a distant third.  While Romney is the choice of the establishment, Perry is probably the next choice (not counting Herman Cain).  Perry has some big backers and I would not be surprised to see him make another surge in the polls.  Regardless, don’t count him out.  I actually would put him as the favorite to win the nomination right now, despite his poor showings in the last month.

If there is one thing to say about Ron Paul, it is that he does not lose many supporters.  His support stays steady.  Nationally, he is polling in the low double digits.  It varies from poll to poll, but I would put him at about 12% right now.  Remember that you don’t have to win over a majority.

I still put Paul’s chances fairly low at getting the nomination, only because the Republicans are too in love with war.  Paul has definitely changed some minds on this issue and others, but it is hard to say if it is enough at this point.  The educational outreach from his campaign has been phenomenal and it will make a major difference in years to come.

I think the only way for Ron Paul to get the Republican nomination is for a major event to happen in the near future.  If there is another major economic crisis (which isn’t far fetched at this point), then perhaps we could see a change in the tides.  Again, the good news is that he will continue to have a solid 10% that will back him no matter what.  This means he can really only go up in the polls.

There are more debates coming and the primaries are moving up.  There should be a lot of action in the next few months.  Libertarians should enjoy the moment, regardless of the outcome.  Did you ever think you would hear Austrian economics mentioned so much on national television?

One thing that Austrian economics can teach us is that the future is uncertain.  In order to understand economics at all, you have to understand the importance of human action.  Human beings have free will.  They will act according to their personality, their needs and wants, and their environment.  It is impossible to predict exactly how billions of people on this planet will act.

Based on economics, history, and our understanding of what generally motivates people, we can take some good guesses at what the future will look like, at least in an approximate way.

The future of the American economy will depend on the actions of Obama, Bernanke, their advisors, and the federal government in general.  It will also depend on foreign governments.  It will also depend on the American people and popular opinion.

With all of that said, let’s look at some of the possibilities that America is facing economically.

The Federal Reserve has tripled the money supply in the last 3 years.  Most of this new money is with commercial banks, most of which is parked at the Fed as excess reserves earning the banks .25% interest.  The government is involved in military conflicts all over the place.  The national debt is about as high as the yearly GDP and the annual deficits are well over one trillion dollars.  There was a big correction that showed up in 2008, but the government has prevented this correction from fully taking place.

The previous artificial boom led to a misallocation of resources.  For example, there were too many resources (labor and material) going towards new housing.  This became obvious in the last few years and this is why unemployment tends to be higher in the housing and construction business.

I see only two ways of returning to real and significant growth.  One way is that the government could get out of the way and we could allow the correction to happen.  The second way is that we could see great technological advances, even in the face of massive government spending and regulations.

While I am optimistic for the future in the long run, I am less optimistic that the government will shrink in the next few years.  The government will eventually be forced to cut back when it faces the threat of hyperinflation or bankruptcy.

I think one likely scenario is that we keep bouncing in and out of recessions.  It is looking likely that the economy is turning down again.  If this happens, we could see another round of “stimulus” from the government and/or the Fed.  It would not surprise me to see high price inflation at some point, although, as I have said before, I don’t expect hyperinflation.  Eventually, the Fed would have to pull back as it did in the late 1970’s and early 1980’s.  This would cause a huge correction.

I think another scenario that is possible and even more likely than I originally thought, is that the economy muddles along in stagnant mode.  Due to the internet and the Ron Paul revolution, the Fed cannot get away with things like they did in the past.  This makes severe price inflation a little less likely.  Perhaps we will see something in America that resembles Japan of the last 20 years.  This would be a scenario where the government will not allow the correction to happen all at once.  It is the equivalent of pulling a band-aid off slowly.

Another possible scenario, but one that I see as unlikely right now, is that we have another recession (or a continuation of the recession, depending on your point of view) and the government actually does little to stop it.  The only problem I see with this is that the politicians in DC are still spending massive amounts of money.  Most of the spending is on the military and entitlements.  I just don’t see this spending coming under control unless the politicians are forced to, either by voter opinion or by the laws of economics.

There is one thing we can be certain about.  As long as the government keeps running huge deficits and keeps interfering with the economy, then a genuine recovery will be difficult.  The government is sucking up resources from the free market economy and it is misallocating these resources at best or destroying these resources at worst.

Barring any revolutionary technology that bursts on to the scene, the government is going to have to loosen its grip for the American economy to get back to significant growth.  People are feeling squeezed right now and it all comes down to government spending and regulation.

Monetary inflation causes several things to happen.  First, it redistributes wealth.  The government benefits at the expense of the average citizen.  Debtors benefit at the expense of the savers.  The list could go on, but it rearranges the wealth based on debts and based on who receives the new money early on.

Second, monetary inflation can cause a boom/bust cycle, particularly when the interest rates are distorted.  There is a misallocation of resources and times seem especially good during the boom phase.  When the misallocations are revealed and the lack of real savings is revealed, then the boom turns to a bust.

One thing monetary inflation doesn’t do is change the amount of wealth.  However, it does cause future wealth to be less than it would have been due to the misallocation of resources.

Monetary inflation eventually translates into higher prices.  This does not happen immediately.  The Fed could create a trillion dollars out of thin air and release it into the economy tomorrow morning.  This is not to say that your lunch will be more expensive than the day before, particularly if the Fed move were not publicly announced.  It would take a little time for the money to circulate through and increase prices.

There are other factors in prices.  There is the demand for money (or velocity).  This is how quickly money changes hands.  If there is a high demand for money (lower spending), then the lower velocity will keep prices lower than they would have been.  In addition, even in an environment with a stable money supply, individual prices will always fluctuate based on the supply and demand of the good.

One thing that is not well understood by many is that price inflation is not uniform.  If the central bank inflates the money supply and the overall price level goes up, certain prices will go up more than others.  The false boom that occurs from monetary inflation will find hot spots and drive some prices up higher than others.  We can see this by looking at past bubbles, such as the tech stock bubble and the housing bubble.

When we talk about price inflation, we often talk about consumer goods such as food and clothing.  But it is actually asset prices that tend to go up higher in an inflationary environment.  For the sake of this discussion, when I say assets, I am referring to things that are commonly bought and sold and are often sold for a higher price.  For example, asset prices that go up might be stocks, real estate, or gold.

We can see this in China now.  Consumer prices are up.  However, real estate prices are flying high.  Real estate prices have gone up more than food and clothing.  Real estate is a bubble in China and it will pop like all other bubbles in history.

So while I am bearish on the American stock market in many respects, I also see the potential for higher stock prices.  There has been a lot of monetary inflation in the last 3 years and it has not shown up much in consumer prices.  Real estate is not looking like a hot spot right now.  There is definitely potential for stocks to make a run if there is not a recession in the near future.  There is also a lot of potential for gold and oil.

While I expect food prices to go up, I expect some other prices to rise at a greater rate.

One thing I don’t expect to rise any time soon is wages.

I can’t get away from this political stuff for now, but I promise I will comment on any major news in the economic/ investment world if and when it comes.

I heard a small part of Rush Limbaugh’s radio show today.  I don’t usually listen.  He mostly drives me nuts.  He is wrong on many topics including foreign policy, civil liberties, and Ron Paul.  However, he has usually seemed to be decent on economic issues.

Well, today, all of that went out the window.  I didn’t realize he was so ignorant on economic issues as well.  I don’t have an exact transcript of what was said (I’m sure it’s on the internet somewhere), but I can pretty well paraphrase what he said.

Limbaugh was talking about Cain’s 9-9-9 plan.  This plan, which I have criticized more than once in the past, was a big topic in the debate on Tuesday night.  Cain’s plan is to institute a 9% corporate tax, a 9% income tax, and a 9% national sales tax.

Cain and his plan were criticized during the debate, particularly by Bachmann and Santorum, although I’m sure Ron Paul would have been highly critical too had he been given more of an opportunity to speak.  But one of the criticisms of his plan is that politicians in the future could raise the 9% income tax rate.

So Limbaugh brings up this subject on his radio show and he basically says that it is ridiculous to criticize Cain’s plan in this way because you could say that about any plan to cut taxes.  He said something to the effect of, “forget the sales tax portion for a minute.”  Then he said that you could never support a plan for a flat tax or lower rate with this logic because there is always a chance that it could be raised again in the future.

Do you see where the problem is here?  The problem is his statement to forget about the sales tax portion of the 9-9-9 plan for a minute.  This is a joke.  Excuse me Rush, but that is part of the package plan, so let’s not forget about it for a minute.

If Cain’s plan were simply to reduce the corporate tax rate to 9% and make the income tax a flat 9% and get rid of all of the other taxes with no national sales tax, then I would fully support this plan.  As a radical libertarian, I would rather these rates go to zero, but I recognize that a 9-9 plan without the national sales tax would be a vast improvement over what we have now.

But Limbaugh is either ignorant or he thinks his listeners are ignorant (which might be partially true).  He pretends that the massive national sales tax is not a part of the plan and analyzes the other part in a vacuum.  Bachmann and Santorum were absolutely correct in their criticisms of Cain’s plan.  If Cain’s plan passed, future politicians could raise the rates.  They could make the income tax rate progressive again.  They could make the income tax rates back to where they are today.  But here is the problem el rushbo: WE WOULD HAVE A NATIONAL SALES TAX TOO.

I have absolutely no use for Rush Limbaugh any more.  He was an apologist for George W. Bush and I’m sure he would be the same way if Romney, Cain, or Perry were president.  The only reason I will listen to him at all in the future is just to know what kind of ignorant things millions of people are hearing out there.