I am writing you from Coronado where I have been for 3 weeks and will be here for another two weeks. My wife, Barbara, daughter Anne, son-in-law Thierry and grand son Blaise are in France for two weeks. I am not with them due to some ailments. Barbara told me that the group went to the Basque country to visit her ancestral roots. An interesting note was the fact that the Basques defeated the Muslims in the 12th century when they had occupied parts of Spain and France. They chased them out and the Muslims never returned. Nothing has changed with the Muslims.

      Obama continues to make major errors in judgment with our economic policies, foreign policies and domestic agendas. Today the news was rumored to reveal a potential devaluation of the American dollar by the rating agencies. Can Obama and Beiden laugh off this potential problem? I hope that this will not happen since the repercussions could be disastrous.

      Our Democrat politicians continue to ignore the oil prices. We are now looking at $110 a barrel. When will Obama stop listening to these environmental ”prophets” that cannot even understand world markets? There are economists predicting $200 a barrel of oil. What will this cause?

1. Finally an increase in drilling.
2. The offshore drilling will increase since more than two-thirds of offshore leases in the Gulf of Mexico are sitting idle. These inactive areas are thought to hold more than 11 billion barrels of oil, according to government estimates. [Source: Street Authority Investor Update, April 12, 2011.]
3. More supply from oil sands from Canada. 20% of U.S. oil imports come from Canada and half of that from oil sands. [Source: NY Times March 30, 2011.]
4. The ripple effect from stepped up worldwide exploration, especially emerging countries and poor countries of Africa sitting on billions of oil barrels. Perhaps the coming oil price increases will eventually cause an increase in supplies and downward pressure on prices.

      Another subject that the Democrats just do not get is the effect of taxes on economic activity. I have written about this subject ad nauseum but those politicians that never studied economics nor heard of Dr. Arthur Laffer or are just plain ignorant and I feel sorry for them. According to the wall Street Journal (April 18, 2011, The IRS income stats from 2008 (Latest Data) the top 1% of taxpayers –salaries, dividends and capital gains about $380,000 –paid 38 % of taxes. The top 10% already pay 69% of all income taxes while the top 5% pay more than all of the other 95%. The President is now targeting the large middle class- taxable income $100 thousand to $200,000. The most expensive tax deductions in terms of lost revenues are state and local tax payments (especially property taxes) mortgage interest, employer-sponsored health insurance, 401(k) contributions and charitable donations. Obama does not only want to tax the “rich” he wants to tax the middle-class to pay for his welfare entitlements. One last comment: the bottom 50% of the population pays no federal income taxes. Shouldn’t they at least pay for some of the defense budget?

Gary E. Marsella
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