Dealing With A Country Whose Economy Is Collapsing Is Not Unlike Dealing With A Cornered Animal

The sanctions placed on Iran by the United States have created severe economic problems for the country. The people of the country are being hurt by the sanctions, the rules are still doing quite well due to black market dealings. A rebellion is brewing. The rebellion will probably be successful if the sanctions continue. The rulers of Iran know that and are trying almost anything to make the sanctions go away. Thus, the recent seizure of oil tankers in the Strait of Hormuz.

One America News posted an article today with the headline, “Britain weighs response to Iran Gulf crisis with few good options.”

The article reports:

Britain was weighing its next moves in the Gulf tanker crisis on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized a ship three days ago.

Prime Minister Theresa May’s office said she would chair a meeting of Britain’s COBR emergency response committee on Monday morning to discuss the crisis.

Little clue has been given by Britain on how it plans to respond after Iranian Revolutionary Guards rappelled from helicopters and seized the Stena Impero in the Strait of Hormuz on Friday in apparent retaliation for the British capture of an Iranian tanker two weeks earlier.

Footage obtained by Reuters from an Iranian news agency on Sunday showed the tanker docked in an Iranian port — with Iran’s flag now hoisted atop.

The British government is expected to announce its next steps in a speech to parliament on Monday. But experts on the region say there are few obvious steps London can take at a time when the United States has already imposed the maximum possible economic sanctions, banning all Iranian oil exports worldwide.

“We rant and rave and we shout at the ambassador and we hope it all goes away,” said Tim Ripley, a British defense expert who writes about the Gulf for Jane’s Defence Weekly.

“I don’t see at this point in time us being able to offer a concession that can resolve the crisis. Providing security and escort for future ships is a different matter.”

A day after calling the Iranian action a “hostile act”, top British officials kept comparatively quiet on Sunday, making clear that they had yet to settle on a response.

“We are going to be looking at a series of options,” junior defense minister Tobias Ellwood told Sky News. “We will be speaking with our colleagues, our international allies, to see what can actually be done.

“Our first and most important responsibility is to make sure we get a solution to the issue to do with the current ship, make sure other British-flagged ships are safe to operate in these waters and then look at the wider picture.”

Seizing a ship in international waters is an act of war. The question is, “What are the western countries going to do about it?” War with Iran is not really a good idea–it’s what the rulers want–feeling that a war would unite the country. We have in the past used military escorts through the Straits of Hormuz. I suspect we will be doing so again. The good news is that America is energy independent and can help dilute the impact of the difficulties in getting oil through the Strait of Hormuz. Meanwhile, I am hoping we have some cyber experts that could make the life of the Iranian rulers a little more difficult.

An Unintended Consequence Of Raising Taxes

I think most of us would agree that the U. S. Tax Code has gotten a little bit out of hand. In 2005, the Tax Code was more than 9,097,000 words (according to a website called freedomworks the Bible contains 774,746 words). How did we get here?

The Tax Code is a tribute to the power of lobbying. Some of the intricacies have valid purposes–the mortgage interest deduction encourages home ownership, a stabilizing force in our society). Some of the intricacies have negative impacts on the values of our society–the marriage penalty for example. The Tax Code is a monstrosity that requires a professional to sort through for many Americans. Our current Tax Code written down weighs more than most toddlers!

Yesterday Big Government posted an article about an academic study showing that as tax rates were raised, tax evasion increases. They spent money to figure that out?

The article reports:

 Macroeconomic and microeconomic modeling studies based on data for several countries suggest that the major driving forces behind the size and growth of the shadow economy are an increasing burden of tax and social security payments… The bigger the difference between the total cost of labor in the official economy and the after-tax earnings from work, the greater the incentive for employers and employees to avoid this difference and participate in the shadow economy. …Several studies have found strong evidence that the tax regime influences the shadow economy.

The article also states:

Indeed, it’s worth noting that international studies find that the jurisdictions with the highest rates of tax compliance are the ones with reasonable tax systems, such as Hong Kong, Switzerland, and Singapore.

Please follow the link to read the entire article. This is an obvious truth, but changing the Tax Code in America would result in something of a loss of power to those in Congress. Somehow, I don’t think that will happen until we change Congress, and even then I am not sure we have the leadership to do what is right.

Enhanced by Zemanta