Weekly Comments Archive
Archived Issue
Sunday, August 7, 2022
ISSUE #1122
China threatening Taiwan; Inflation Reduction; and the IRS

Thanks to Speaker Pelosi’s visit to Taiwan, we are learning more about the true intentions of the Communist Party in mainland China. They intend to take over Taiwan, as they did with Hong Kong. If they succeed, would Singapore be next? Or South Korea? Or even an old enemy, Japan?

Why do the Communists want Taiwan?  But 24 million people in Taiwan never want to be part of China. Before, during and after World War II, Communists slowly took control of mainland China, murdering millions in the process. The existing leaders, under Chiang Kai-shek, moved the government to Formosa (now Taiwan) in 1949. They escaped Communism. So why, 73 productive years later, would Taiwan citizens want to go under Communist rule? The GDP (Gross Domestic Product) is $34,000 per person compared to only $12,000 for a person in China. (Singapore’s GDP is 6 times China’s; the GDP of South Korea and Japan is similar to Taiwan’s, and Hong Kong’s GDP, considered separately, is 4 times greater per person than the China average.)

Why does the future of Taiwan matter to us? One word: CHIPS. As in advanced semiconductor chip manufacturing. Of course, that’s not the only reason. But Taiwan accounts for more than 90% of the world’s most advanced chip manufacturing according to the Semiconductor Industry Association. The SIA report continues, “While potential loss of life is the biggest worry, it’s hard to overstate the importance of Taiwan to the U.S. and the global tech landscape. Most of the advanced chips required for military defense systems and corporate computing services are made in Taiwan.” We are already short of chips for ordinary items: automobiles, trucks, farm tractors, and kitchen appliances.

Somebody had better inform the President. No matter how many millions he and Hunter might lose of their Communist China investments, we need to support Taiwan 100%. And do it immediately. If China takes over Taiwan it will be a horrible disruption of global business. And similar to Ukraine, we hate to let a “free” friendly country be taken over by Communists.

Today, Democrat Senators passed the $700 Billion inflationary “Inflation Reduction Act,” thanks to a tie-breaking vote by VP Kamala Harris. The House Democrats will pass it in a few days and President Biden will immediately sign it. The Act has several items in it, so each Democrat can find one or two to brag about and every Republican can identify several to complain about. Unless I missed it, there is nothing in the bill to increase production of oil and gas (to reduce energy costs), or relax regulations that could allow twice as many trucks access to California ports (reducing supply chain problems) and allow pilots older than 65 (to help reduce cancelled flights). Or sourcing raw materials for EV batteries from here or friendly countries instead of China.

One item got my attention. The bill includes hiring 180,000 new IRS agents, doubling the current number. The IRS will receive a million applications, mostly from unemployed grads from expensive universities with student loans of at least $150,000. The main requirement for IRS agents is knowing how to add and subtract on a calculator. The IRS has limited office space available, so most applicants are hoping they will get a new computer and can work from their home (or more likely their parents’ home).

The President claims no one making under $400,000 will be affected. My rough calculation indicates that each IRS agent will have about 15 tax returns over $400,000 to audit. Even if the number is 20 or 25, how long will that take? My guess is that after finishing those audits in a couple of months, the agents will spend the rest of the year auditing those of us with lower incomes.

The jobs report for July was great: 520,000 new jobs filled. The government was expecting only 150,000. They were shocked that 370,000 people had to go back to work to buy food, gas and school supplies. I guess those 370,000 aren’t convinced the new “Inflation Reduction Act” will reduce inflation any time soon. And a call from one of those IRS agents could quickly inflate their tax bill.

Historic quotes by Will Rogers:

“If you know your Chinese, there is quite a big communistic hold in certain parts of China. The influence is growing rapidly.” WA #520, Dec. 11, 1932

“My old friend Arthur Brisbane accused me good-naturedly of being worried over this ‘inflation.’ I wasn’t worried. I was just ‘confused.’ There is quite a difference. When you are worried you know what you are worried about, but when you are ‘confused’ it’s when you don’t know enough about a thing to be worried.” DT #2096, April 23, 1933


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