Posts
This is well produced and entertaining video. Which should start a whole new discussion about education, but I'm not going there.
Fight of the Century at econstories
Wednesday, August 24, 2011
Saturday, August 20, 2011
Can we solve this problem with more taxes?
Um. NO.
You would have to confiscate every dollar from every person who earns $200,000 or more. Imagine what that would do for the economy? But in any event, what would you do next year? Because obviously, those people would not be working those jobs and making those investments anymore. Let's see, work at 7-11 for $30K or work at Goldman-Sachs for nuthin. No brainer.
Tax Foundation
IT'S NOT A TAX PROBLEM, IT'S A SPENDING PROBLEM!
Fix the spending problem first. Then use additional revenue to PAY DOWN THE DEBT!
Maybe we should have a tax revolt instead of a tea party. Reduce your withholding as much as you can without incurring a penalty. Send the IRS a notice that you are taking the additional amount you owe off of the nation's tab. Too bad we can't send money to the treasury earmarked for debt reduction (not deficit reduction, the debt we already owe). No, you can't keep it, you would have to put it in an escrow account. But hey, interest rates are going up so at least you will be earning some money for the government, right?
Why worry about the debt? Because we are paying interest on it. And the interest, if we keep spending like drunken sailors, will consume the entire annual federal revenue in just a few short years, not decades (somewhere between 2021 and 2041 depending on interest rates).
In 2010, we spent more in interest than we did on Health and Human Services (medicare/medicaid) More than Transportation, Veterans Affairs, Agriculture, Energy, HUD, Justice, DHS, Commerce, Labor, Small Business Admin, Treasury. Combined. In the last 20 years, we have spent $8 trillion just on interest - nice income for other countries.
If Congress stopped all spending today and paid $100 million per day, it would take 389 years to pay off the national debt. And that was in 2010, so it is closer to 500 years now.
Government Gone Wild
You would have to confiscate every dollar from every person who earns $200,000 or more. Imagine what that would do for the economy? But in any event, what would you do next year? Because obviously, those people would not be working those jobs and making those investments anymore. Let's see, work at 7-11 for $30K or work at Goldman-Sachs for nuthin. No brainer.
Tax Foundation
IT'S NOT A TAX PROBLEM, IT'S A SPENDING PROBLEM!
Fix the spending problem first. Then use additional revenue to PAY DOWN THE DEBT!
Maybe we should have a tax revolt instead of a tea party. Reduce your withholding as much as you can without incurring a penalty. Send the IRS a notice that you are taking the additional amount you owe off of the nation's tab. Too bad we can't send money to the treasury earmarked for debt reduction (not deficit reduction, the debt we already owe). No, you can't keep it, you would have to put it in an escrow account. But hey, interest rates are going up so at least you will be earning some money for the government, right?
Why worry about the debt? Because we are paying interest on it. And the interest, if we keep spending like drunken sailors, will consume the entire annual federal revenue in just a few short years, not decades (somewhere between 2021 and 2041 depending on interest rates).
In 2010, we spent more in interest than we did on Health and Human Services (medicare/medicaid) More than Transportation, Veterans Affairs, Agriculture, Energy, HUD, Justice, DHS, Commerce, Labor, Small Business Admin, Treasury. Combined. In the last 20 years, we have spent $8 trillion just on interest - nice income for other countries.
If Congress stopped all spending today and paid $100 million per day, it would take 389 years to pay off the national debt. And that was in 2010, so it is closer to 500 years now.
Government Gone Wild
Wednesday, August 3, 2011
A debt analogy
So, instead of amassing another $10 trillion in debt over the next decade, we will amass only $7.5 trillion more? As Ron Paul said, whoopee.
My son's analogy: So instead of crashing the plane into the tarmac at a 90 degree angle, we will just crash it at a 70 degree angle instead.
And instead of addressing the spending problem that adds another $trillion to the debt every year, we will whine and threaten and demagogue to no end tax cuts for the wealthy and tax breaks for the richest corporations (picking winners and losers again) which, if we went ahead and did what is suggested, would result in only several billion more in revenue. Why? Because the really wealthy people that are constantly being demonized don't earn the money from income. Therefore income tax increases don't increase affect them. And most people who would be affected aren't pulling wages in the $200,000+ brackets, they are business owners. If the government isn't taking their income (not wages), then it is available to reinvest in the business, thereby improving the economy, increasing the number of wage-earners and therefore income tax revenue. The millionaires and billionaires are not going to be paying any more in income tax - it isn't earned income to begin with. So much for fair share, so much for the "protecting the wealthy" argument, they are all protecting the wealthy by keeping capital gains taxes low and keeping capital expensing and amortization periods favorable. No one pays attention to how the rich are taxed except for the rich, so no one knows it is a completely different system.
Loved these articles from Reason spending-cuts, taxes and revenue
Page 2, taxes and spending
Percent of taxes by income share
My son's analogy: So instead of crashing the plane into the tarmac at a 90 degree angle, we will just crash it at a 70 degree angle instead.
And instead of addressing the spending problem that adds another $trillion to the debt every year, we will whine and threaten and demagogue to no end tax cuts for the wealthy and tax breaks for the richest corporations (picking winners and losers again) which, if we went ahead and did what is suggested, would result in only several billion more in revenue. Why? Because the really wealthy people that are constantly being demonized don't earn the money from income. Therefore income tax increases don't increase affect them. And most people who would be affected aren't pulling wages in the $200,000+ brackets, they are business owners. If the government isn't taking their income (not wages), then it is available to reinvest in the business, thereby improving the economy, increasing the number of wage-earners and therefore income tax revenue. The millionaires and billionaires are not going to be paying any more in income tax - it isn't earned income to begin with. So much for fair share, so much for the "protecting the wealthy" argument, they are all protecting the wealthy by keeping capital gains taxes low and keeping capital expensing and amortization periods favorable. No one pays attention to how the rich are taxed except for the rich, so no one knows it is a completely different system.
Loved these articles from Reason spending-cuts, taxes and revenue
Page 2, taxes and spending
Percent of taxes by income share
Tuesday, August 2, 2011
Tuesday, July 26, 2011
The gap between wealthy and everyone else
Here's a thought:
Find out how the rich guy made the money. And do the same. Study the wealthy for how they got there, not because they have things you don't. We don't get anywhere by blaming the wealthy for what we don't have.
Honestly, I am not disparaging those who have less than the average bear. And I'm not saying that no one needs a helping hand - for all those people who are out of a job and lost their wealth when the value of their house was cut in half - you really are at a disadvantage. A family can probably lose their equity, a job or their health, but losing more than one is darned difficult to get through and the older you are, the more difficult to overcome. Still, it is not the wealthy person's job to take care of you. There is a difference between a charitable obligation and government confiscation.
I'm just saying that what made America in the past were people who said "I want that and I'm going to find out how to get it," and not "I deserve that and I'm going to find out how to take it."
It used to be that wealth was accumulated through wages, savings, home equity and retirement investments. Not great wealth but comfortable wealth. No more. I don't have the answers, I just can plainly see that what worked in the past is not part of the paradigm we live in now.
Find out how the rich guy made the money. And do the same. Study the wealthy for how they got there, not because they have things you don't. We don't get anywhere by blaming the wealthy for what we don't have.
Honestly, I am not disparaging those who have less than the average bear. And I'm not saying that no one needs a helping hand - for all those people who are out of a job and lost their wealth when the value of their house was cut in half - you really are at a disadvantage. A family can probably lose their equity, a job or their health, but losing more than one is darned difficult to get through and the older you are, the more difficult to overcome. Still, it is not the wealthy person's job to take care of you. There is a difference between a charitable obligation and government confiscation.
I'm just saying that what made America in the past were people who said "I want that and I'm going to find out how to get it," and not "I deserve that and I'm going to find out how to take it."
It used to be that wealth was accumulated through wages, savings, home equity and retirement investments. Not great wealth but comfortable wealth. No more. I don't have the answers, I just can plainly see that what worked in the past is not part of the paradigm we live in now.
Sunday, July 24, 2011
The other half...
I was going to post something about this class warfare demagoguery, but then I received this. Which gets to the point so well.
Wednesday, July 13, 2011
First, we can't go back to those happy days
1. Things change. Adaptation is necessary. Pretending that doing the same things will produce the same results doesn't change reality. It wastes time and that limits the options. The population is getting older and sicker and is unemployed for longer. The first two facts are obvious and aren't changing. The last one may change, but not any time soon. Not unless/until we start producing things in this country and stop sending more money overseas than we bring in.
2. It doesn't matter how high we increase taxes. If we take all the money from people making more than $250,000 per year, it still won't be enough. So the middle/working class is going to pay too, directly and indirectly. The idea that we can close loopholes for corporate jets to pay for college scholarships is ludicrous.
3. It doesn't matter how much we cut discretionary spending. Not far short of simply closing the federal government (meaning the good and the bad - cancer research, national parks, border patrol, too), cutting the budget still won't be enough.
4. If we do nothing, medicare will run out of money and everyone loses benefits. The longer we wait to fix it, the more people will be affected. We can preserve benefits as they are for people 55 and older including those who are already getting benefits - if we act now. If we wait for a new congress, it will be people 60 and over. So whether you are over 55 or under, you have no incentive to put this off. The status quo is not an option.
5. If we do nothing, social security payouts will exceed its income - and benefits will be reduced for everyone. The extra money doesn't come out of the general fund that pays for everything else. While the program is required to be self-sustaining, the benefits that are owed in the future are still obligations that the federal government owns. Increasing income taxes and closing loopholes has no impact on this - it is just changing the subject. Changing payroll SS taxes and retirement ages are required. (There is an issue in that the government has to borrow money to pay back the iou's to the SS program, but no one is proposing not paying them back. One does want to keep the interest as low as possible.)
6. Arguing over things like tax breaks for corporate jets take up more oxygen than the loopholes are worth. $300 million is a joke when we are talking about $trillions we don't have. But singling them out is just mean-spirited. Middle class workers are building those jets after all. Without buyers... does the government take over that industry, too? There are consequences. Take gas/oil taxes. Tax increases result in price increases so the tax ends up being paid by the middle class anyway.
7. The biggest budget killer is interest and the more we borrow, the more of the available budget pie gets eaten by interest. The most important thing is to quit borrowing. The second most important thing is to keep interest rates down. Making investors worried is counter-productive.
8. Reducing the amount the federal budget increases from one year to the next is not a cut, sorry. Borrowing doesn't go down until spending goes down. Don't be fooled by those smoke and mirrors.
9. Taxes are going to increase anyway. The Bush tax cuts expire in 2013 and the 2% cut in payroll taxes expire in 2012. In this environment, there is no way either of those are going to be removed by this congress.
10. It doesn't matter what actually happens on August 3, perception rules. The markets are driven by what the marketeers think will happen. The damage will be done 7-10 days before that. And those damages are not "undone" by taking action on the borrowing ceiling on August 1. The real damage will be the increase in interest rates for everyone - take credit cards for example. When businesses are paying more in interest, then the price of goods goes up as well.
All this has impact in various ways on jobs - sometimes in unexpected ways.
There is a smidgen of good news. If you move your 401K to treasuries, those bonds are going to be paying out more interest. If you can take a lump sum and retire to South Vietnam before the Treasury has to pay out, you might just make out. If you can survive inflation until then.
2. It doesn't matter how high we increase taxes. If we take all the money from people making more than $250,000 per year, it still won't be enough. So the middle/working class is going to pay too, directly and indirectly. The idea that we can close loopholes for corporate jets to pay for college scholarships is ludicrous.
3. It doesn't matter how much we cut discretionary spending. Not far short of simply closing the federal government (meaning the good and the bad - cancer research, national parks, border patrol, too), cutting the budget still won't be enough.
4. If we do nothing, medicare will run out of money and everyone loses benefits. The longer we wait to fix it, the more people will be affected. We can preserve benefits as they are for people 55 and older including those who are already getting benefits - if we act now. If we wait for a new congress, it will be people 60 and over. So whether you are over 55 or under, you have no incentive to put this off. The status quo is not an option.
5. If we do nothing, social security payouts will exceed its income - and benefits will be reduced for everyone. The extra money doesn't come out of the general fund that pays for everything else. While the program is required to be self-sustaining, the benefits that are owed in the future are still obligations that the federal government owns. Increasing income taxes and closing loopholes has no impact on this - it is just changing the subject. Changing payroll SS taxes and retirement ages are required. (There is an issue in that the government has to borrow money to pay back the iou's to the SS program, but no one is proposing not paying them back. One does want to keep the interest as low as possible.)
6. Arguing over things like tax breaks for corporate jets take up more oxygen than the loopholes are worth. $300 million is a joke when we are talking about $trillions we don't have. But singling them out is just mean-spirited. Middle class workers are building those jets after all. Without buyers... does the government take over that industry, too? There are consequences. Take gas/oil taxes. Tax increases result in price increases so the tax ends up being paid by the middle class anyway.
7. The biggest budget killer is interest and the more we borrow, the more of the available budget pie gets eaten by interest. The most important thing is to quit borrowing. The second most important thing is to keep interest rates down. Making investors worried is counter-productive.
8. Reducing the amount the federal budget increases from one year to the next is not a cut, sorry. Borrowing doesn't go down until spending goes down. Don't be fooled by those smoke and mirrors.
9. Taxes are going to increase anyway. The Bush tax cuts expire in 2013 and the 2% cut in payroll taxes expire in 2012. In this environment, there is no way either of those are going to be removed by this congress.
10. It doesn't matter what actually happens on August 3, perception rules. The markets are driven by what the marketeers think will happen. The damage will be done 7-10 days before that. And those damages are not "undone" by taking action on the borrowing ceiling on August 1. The real damage will be the increase in interest rates for everyone - take credit cards for example. When businesses are paying more in interest, then the price of goods goes up as well.
All this has impact in various ways on jobs - sometimes in unexpected ways.
There is a smidgen of good news. If you move your 401K to treasuries, those bonds are going to be paying out more interest. If you can take a lump sum and retire to South Vietnam before the Treasury has to pay out, you might just make out. If you can survive inflation until then.
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