"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election". ~ Warren Buffett
The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971...before computers, e-mail, cell phones, etc. Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land...all because of public pressure.
Warren Buffet is asking each addressee to forward this email to a minimum of
twenty people on their address list; in turn ask each of those to do likewise.
In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.
*Congressional Reform Act of 2011*
1. No Tenure / No Pension. A Congressman collects a salary while in office
and receives no pay when they are out of office.
2. Congress (past, present & future) participates in Social Security. All
funds in the Congressional retirement fund move to the Social Security
system immediately. All future funds flow into the Social Security system,
and Congress participates with the American people. It may not be used for
any other purpose.
3. Congress can purchase their own retirement plan, just as all Americans
do.
4. Congress will no longer vote themselves a pay raise. Congressional pay
will rise by the lower of CPI or 3%.
5. Congress loses their current health care system and participates in the
same health care system as the American people.
6. Congress must equally abide by all laws they impose on the American
people.
7. All contracts with past and present Congressmen are void effective 1/1/12.
The American people did not make this contract with Congressmen. Congressmen
made all these contracts for themselves. Serving in Congress is an honor,
not a career. The Founding Fathers envisioned citizen legislators, so ours
should serve their term's), then go home and back to work.
If each person contacts a minimum of twenty people then it will only take three days for most people (in the U.S.) to receive the message. Maybe it is time.
THIS IS HOW YOU FIX CONGRESS!!!!! If you agree with the above, pass it on.
(Warren Buffet is asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.
In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.)
*Congressional Reform Act of 2011*
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Monday, March 26, 2012
Wednesday, October 19, 2011
Three Observations Worth Pondering
Beloved children’s author Lemony Snicket has visited the Occupy Wall Street protest and wrote up a list of observations that will hopefully chill those within the executive suites looking down upon Zuccotti Park. Here are three of those observations:
From Wonkette.
- Historically, a story about people inside impressive buildings ignoring or even taunting people standing outside shouting at them turns out to be a story with an unhappy ending.
- There may not be a reason to share your cake. It is, after all, yours. You probably baked it yourself, in an oven of your own construction with ingredients you harvested yourself. It may be possible to keep your entire cake while explaining to any nearby hungry people just how reasonable you are.
- Nobody wants to fall into a safety net, because it means the structure in which they’ve been living is in a state of collapse and they have no choice but to tumble downwards. However, it beats the alternative.
From Wonkette.
Monday, October 17, 2011
Best book review ... ever.
“There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves Orcs.”
Read more on The Bonddad Blog.
Read more on The Bonddad Blog.
Wednesday, October 05, 2011
Occupy Wall Street?
People ask, “What is it about.” Most simply put, it’s about inequity.
Let me outline a thought. The world has always had an extremely wealthy class. It has also always had the poor. Since The Enlightenment (17th-18th centuries) the thing that has changed has been the rise of the middle class. My thought is this: The middle class acts as a buffer between wealth and power on one hand and the peasants with torches and pitch forks on the other hand. The middle class offers hope to the poor in terms of the possibility of upward mobility; it also offers a consumer base that supports the very wealthy. A strong middle class is essential to both peace and prosperity.
In recent history, since the market crash in 2008, those hurt most have been the middle class. The poor were suffering to begin with and when you have nothing to begin with how much can you possibly lose? The wealthy haven’t suffered; virtually 100% of the income growth over the last 20 years has gone to the top 10% of our population … leaving nothing for the other 90%. Those most hurt have been the middle class. Pensions have been cut. Retirement “nest eggs” embodied in home ownership and retirement mutual funds have lost their value. The American Dream, an ideal of the middle class, has been destroyed.
Extraneous thought: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." (Anatole France, from The Red Lily, 1894)
Suddenly, the American middle class is confronted by the prospect of sleeping under bridges, begging in the streets and stealing bread - issues with which the poor have had to contend from time immemorial and the very rich have never had to consider.
This inequity coupled with the threat of the withdrawal of community support (like modifications to Social Security benefits and Medicare benefits, the threat of higher taxes for the middle class and lower taxes for “job creators” who aren’t creating any jobs) is, I believe, the prime motivator for the OWS movement. It is the expression of concern for the overall direction which is leading to greater inequity at the continued expense of the middle class.
Let me outline a thought. The world has always had an extremely wealthy class. It has also always had the poor. Since The Enlightenment (17th-18th centuries) the thing that has changed has been the rise of the middle class. My thought is this: The middle class acts as a buffer between wealth and power on one hand and the peasants with torches and pitch forks on the other hand. The middle class offers hope to the poor in terms of the possibility of upward mobility; it also offers a consumer base that supports the very wealthy. A strong middle class is essential to both peace and prosperity.
In recent history, since the market crash in 2008, those hurt most have been the middle class. The poor were suffering to begin with and when you have nothing to begin with how much can you possibly lose? The wealthy haven’t suffered; virtually 100% of the income growth over the last 20 years has gone to the top 10% of our population … leaving nothing for the other 90%. Those most hurt have been the middle class. Pensions have been cut. Retirement “nest eggs” embodied in home ownership and retirement mutual funds have lost their value. The American Dream, an ideal of the middle class, has been destroyed.
Extraneous thought: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." (Anatole France, from The Red Lily, 1894)
Suddenly, the American middle class is confronted by the prospect of sleeping under bridges, begging in the streets and stealing bread - issues with which the poor have had to contend from time immemorial and the very rich have never had to consider.
This inequity coupled with the threat of the withdrawal of community support (like modifications to Social Security benefits and Medicare benefits, the threat of higher taxes for the middle class and lower taxes for “job creators” who aren’t creating any jobs) is, I believe, the prime motivator for the OWS movement. It is the expression of concern for the overall direction which is leading to greater inequity at the continued expense of the middle class.
Thursday, September 01, 2011
The Case for Wasteful (Government) Spending
Government waste is like the weather. Everyone talks about it but no one really does anything about it. I suspect that no one does anything about it because what constitutes wasteful government spending is such a subjective thing. Just as the old saying goes, one man’s trash is another man’s treasure, so it is that one man’s wasteful spending is another man’s necessary investment. As with so many things, the definition depends on your point of view.
This is not to say that government spending couldn’t be done more effectively or efficiently or that it isn’t possible to get more bang for the buck. Without doubt, our government could certainly get more bang for the buck in many cases.
But let’s examine a concrete instance. Let’s take Medicare Part D as a starting point. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and went into effect on January 1, 2006. (I’ll leave it to you, the reader, to figure out who controlled Congress in 2003.)
By the design of the program, the federal government, by law, is not permitted to negotiate prices of drugs with the drug companies, as other federal agencies do in other programs. The Department of Veterans Affairs, which is allowed to negotiate drug prices and establish a formulary, pays 58% less for drugs, on average, than Medicare Part D. For example, Medicare pays $785 for a year's supply of Lipitor (atorvastatin), while the Veterans Administration (VA) pays $520.
From the point of view of the tax payer, the difference between what the drug companies are charging the government Medicare program and what they charge the VA could easily be defined as wasteful spending. However, from the point of view of the drug companies who lobbied for the provision and the congressional legislators who supported the measure, it’s extremely important to protect the profitability of the drug companies. So, whether or not Medicare spending $265 more than the VA for the same medication is wasteful is a function of which side your on … the tax payers’ side or on the side of corporations.
That spending difference was enacted into law and, because it is the law passed by Congress, no one in the administration of Medicare can do anything about it without breaking the law. However, those in the administration of the Medicare program certainly get the blame for being inefficient and ineffective and wasteful.
The $4 billion worth of medical-related fraud the feds recaptured in 2010 is presumably a fraction of the taxpayer-subsidized scams that the pharma and health care providers got away with. The Top Ten Federal False Claims Act settlements in 2010 involved health care, with pharmaceutical company fraud accounting for eight.
Was the $4 billion a waste of taxpayer’s money? Most people would agree that it was. However, the obvious solution to some is to cut the Medicare program with the consequence that fewer government employees are available to investigate false claims … because it’s paying government employees that’s the wasteful spending?
But there’s a even bigger point. When talking about wasteful spending people seem to argue from the point of view that what they consider wasteful spending is basically putting money into a rocket ship and blasting it off into outer space. The fact of the matter is that even “wasteful” spending is money that, through the government purchases of goods and services, gets circulated throughout the economy. The money that isn’t captured as corporate profits (think $600 toilet seats) goes to pay people to manufacture those products or perform those services.
All systems have waste. Waste cannot be eliminated. At best, it can be controlled.
When we talk about wasteful spending in government, it might be a good idea to ask “compared to what?” For example, the internal combustion engine that powers your car has an efficiency rating on the order of 18% to 20%. That means that between 18% and 20% of the energy released from .the burning of fuel in the engine is used to propel the car down the road. The remaining 80% of the energy is released as heat and is dissipated into the atmosphere, accomplishing nothing. By contrast, Medicare a government program, considered by some to be very inefficient, provides a decent standard of health care for approximately 45 million Americans with only a 3% administrative cost (that could be analogous to the useless heat from your car engine) while 97% of its funds go to directly to individual health care (excluding fraud as mentioned above, of course).
But that’s not comparing apples to apples. So lets compare the Medicare 3% administrative cost to the 15% to 20% administrative cost associated with private health care providers. Incidentally, you can add corporate wasteful spending on top of that (interminable staff meetings that accomplish nothing, for example, because someone has to pay all those employees who attend for their time).
The take away from all of this is that government waste is subjective. It is a favorite hobby horse ridden by those who oppose anything that resembles a government program … while they neglect to mention that they were the ones who created the waste.
This is not to say that government spending couldn’t be done more effectively or efficiently or that it isn’t possible to get more bang for the buck. Without doubt, our government could certainly get more bang for the buck in many cases.
But let’s examine a concrete instance. Let’s take Medicare Part D as a starting point. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and went into effect on January 1, 2006. (I’ll leave it to you, the reader, to figure out who controlled Congress in 2003.)
By the design of the program, the federal government, by law, is not permitted to negotiate prices of drugs with the drug companies, as other federal agencies do in other programs. The Department of Veterans Affairs, which is allowed to negotiate drug prices and establish a formulary, pays 58% less for drugs, on average, than Medicare Part D. For example, Medicare pays $785 for a year's supply of Lipitor (atorvastatin), while the Veterans Administration (VA) pays $520.
From the point of view of the tax payer, the difference between what the drug companies are charging the government Medicare program and what they charge the VA could easily be defined as wasteful spending. However, from the point of view of the drug companies who lobbied for the provision and the congressional legislators who supported the measure, it’s extremely important to protect the profitability of the drug companies. So, whether or not Medicare spending $265 more than the VA for the same medication is wasteful is a function of which side your on … the tax payers’ side or on the side of corporations.
That spending difference was enacted into law and, because it is the law passed by Congress, no one in the administration of Medicare can do anything about it without breaking the law. However, those in the administration of the Medicare program certainly get the blame for being inefficient and ineffective and wasteful.
The $4 billion worth of medical-related fraud the feds recaptured in 2010 is presumably a fraction of the taxpayer-subsidized scams that the pharma and health care providers got away with. The Top Ten Federal False Claims Act settlements in 2010 involved health care, with pharmaceutical company fraud accounting for eight.
Was the $4 billion a waste of taxpayer’s money? Most people would agree that it was. However, the obvious solution to some is to cut the Medicare program with the consequence that fewer government employees are available to investigate false claims … because it’s paying government employees that’s the wasteful spending?
But there’s a even bigger point. When talking about wasteful spending people seem to argue from the point of view that what they consider wasteful spending is basically putting money into a rocket ship and blasting it off into outer space. The fact of the matter is that even “wasteful” spending is money that, through the government purchases of goods and services, gets circulated throughout the economy. The money that isn’t captured as corporate profits (think $600 toilet seats) goes to pay people to manufacture those products or perform those services.
All systems have waste. Waste cannot be eliminated. At best, it can be controlled.
When we talk about wasteful spending in government, it might be a good idea to ask “compared to what?” For example, the internal combustion engine that powers your car has an efficiency rating on the order of 18% to 20%. That means that between 18% and 20% of the energy released from .the burning of fuel in the engine is used to propel the car down the road. The remaining 80% of the energy is released as heat and is dissipated into the atmosphere, accomplishing nothing. By contrast, Medicare a government program, considered by some to be very inefficient, provides a decent standard of health care for approximately 45 million Americans with only a 3% administrative cost (that could be analogous to the useless heat from your car engine) while 97% of its funds go to directly to individual health care (excluding fraud as mentioned above, of course).
But that’s not comparing apples to apples. So lets compare the Medicare 3% administrative cost to the 15% to 20% administrative cost associated with private health care providers. Incidentally, you can add corporate wasteful spending on top of that (interminable staff meetings that accomplish nothing, for example, because someone has to pay all those employees who attend for their time).
The take away from all of this is that government waste is subjective. It is a favorite hobby horse ridden by those who oppose anything that resembles a government program … while they neglect to mention that they were the ones who created the waste.
Saturday, August 20, 2011
A Basic Math Lesson
"The GDP equation has four variables (long-time readers, please be kind. I'm talking to Washington here and they are stupid): C (consumer spending) + I (gross private investment) + X (net exports) + G (government spending). Right now, the consumer is OK but not great, investment is fair, but not great and the US is a net importer, so that subtracts from growth. That leaves government spending."
My comment: An economy is value (money) in motion. If the private industry is not spending (it's deleveraging or paying down debt), consumer spending is off (joblessness tends to do that) and we're a net importer (see the trade deficit), what do you suppose will happen to the economy if government spending is put on an austerity basis with draconian cuts in spending?
Cutting government spending slows the movement of value. Government spending (even wasteful spending) is not putting money in a rocket ship and blasting it into outer space. Government spending contributes to moving value (money) within the economy.
If you're sorta liberal, if you're a rational conservative, if your opinions are formed by facts, then read the article. If you're a Tea Potty supporter, don't bother. We already know that facts don't matter to you and that anything longer than a bumper sticker is too long for your ADD to navigate.
My comment: An economy is value (money) in motion. If the private industry is not spending (it's deleveraging or paying down debt), consumer spending is off (joblessness tends to do that) and we're a net importer (see the trade deficit), what do you suppose will happen to the economy if government spending is put on an austerity basis with draconian cuts in spending?
Cutting government spending slows the movement of value. Government spending (even wasteful spending) is not putting money in a rocket ship and blasting it into outer space. Government spending contributes to moving value (money) within the economy.
If you're sorta liberal, if you're a rational conservative, if your opinions are formed by facts, then read the article. If you're a Tea Potty supporter, don't bother. We already know that facts don't matter to you and that anything longer than a bumper sticker is too long for your ADD to navigate.
Thursday, August 11, 2011
Deficits, Debts and Taxes
The deficit, which has everyone freaked out, is running about 10% of GDP. The people who are freaking out seem to forget that in 1942, government spending created a deficit on the order of 30% of GDP in the ramp up for our full and active participation in WWII. (The Debt in 1942 was about 120% of GDP while current Debt is about 110%.) In 1943, government spending was not significantly lower (as a percentage of GDP) than in 1942.
People like to say that WWII got us out of the Depression, and it did ... but it wasn't Hitlers spending that did the trick ... it was our government spending that fired up our ship yards; it was our government spending that converted The American Seating Company in Grand Rapids, MI from making folding chairs and cast iron theater seat frames to making B-17 bombers. Our government spending paid (through military orders) for companies to hire hundreds of thousands of people - nay! millions of people - who in turn bought groceries, shoes and clothing from local merchants causing them to hire more clerical help, causing the merchants to place more orders with their suppliers which caused their suppliers to hire more workers to produce more goods ... because there was demand. I wonder how a Balanced Budget Amendment would have worked out for us if it had been passed in 1941. How's your German? Japanese?
By 1946, at the end of the war, the deficit that had been running at 25-30% of GDP reversed and became a surplus - because government spending at previous levels was no longer necessary and GDP had increased astronomically. We became a manufacturing powerhouse and an export giant in a world where all of our competitors had been devestated. The deficit had moved to surplus in the space of less than a year. Eisenhower used that surplus to initiate the Interstate Highway System in the early 1950s. He used to people's money to do something for the common good, something that benefited individuals and corporations and still does to this day. (Incidentally, one of the specifications of the Interstate Highway System was that it could double as landing space for military aircraft in the event the threat from the USSR came home to visit us. Ever wonder why those Interstate lanes are separated from each other as much as they are throughout the country?)
I find it interesting to hear so many so-called Conservatives long for those simpler, idyllic days of the 1950s and 1960s when there was full employment and dad made enough money from his job that he could buy an affordable house while mom stayed home and took care of their 2.3 kids. They long for those wonderful days when inflation was less than 3% and there was a job for anyone that wanted one.
I find myself asking, why are they so reluctant to support a tax structure that made those days possible?
People like to say that WWII got us out of the Depression, and it did ... but it wasn't Hitlers spending that did the trick ... it was our government spending that fired up our ship yards; it was our government spending that converted The American Seating Company in Grand Rapids, MI from making folding chairs and cast iron theater seat frames to making B-17 bombers. Our government spending paid (through military orders) for companies to hire hundreds of thousands of people - nay! millions of people - who in turn bought groceries, shoes and clothing from local merchants causing them to hire more clerical help, causing the merchants to place more orders with their suppliers which caused their suppliers to hire more workers to produce more goods ... because there was demand. I wonder how a Balanced Budget Amendment would have worked out for us if it had been passed in 1941. How's your German? Japanese?
By 1946, at the end of the war, the deficit that had been running at 25-30% of GDP reversed and became a surplus - because government spending at previous levels was no longer necessary and GDP had increased astronomically. We became a manufacturing powerhouse and an export giant in a world where all of our competitors had been devestated. The deficit had moved to surplus in the space of less than a year. Eisenhower used that surplus to initiate the Interstate Highway System in the early 1950s. He used to people's money to do something for the common good, something that benefited individuals and corporations and still does to this day. (Incidentally, one of the specifications of the Interstate Highway System was that it could double as landing space for military aircraft in the event the threat from the USSR came home to visit us. Ever wonder why those Interstate lanes are separated from each other as much as they are throughout the country?)
I find it interesting to hear so many so-called Conservatives long for those simpler, idyllic days of the 1950s and 1960s when there was full employment and dad made enough money from his job that he could buy an affordable house while mom stayed home and took care of their 2.3 kids. They long for those wonderful days when inflation was less than 3% and there was a job for anyone that wanted one.
I find myself asking, why are they so reluctant to support a tax structure that made those days possible?
Thursday, July 21, 2011
Tea Party Logic
It seems to me that there are some in Congress who think you should stop making the mortgage payments (or paying the rent) if you feel your wife and kids are spending too much on food and health care.
Monday, July 18, 2011
Antiscientists are leading America down a dangerous road
Today's GOP antiscience fervor is somewhat new for America. The last time it got close was about a century ago, when the Democrats went antiscience under the leadership of anti-evolution campaigner William Jennings Bryan. Back then, the Republicans were the party of science, reason, finance, environmentalism and progressivism.
But even then, things weren't as virulent as they are now, because the push was coming mostly from Southern social and religious conservatives, while today those conservatives are joined by the vested interests and deep pockets of big business. This is driving almost all of the new GOP freshmen lawmakers to take positions that are vehemently anti-climate science, pro-creationism, pro-abstinence only education, and seeking to personally vilify, harrass and attack scientists for their own political gain.
This has never been a successful strategy, and today's GOP should abandon it. Americans should support Republican candidates that are pro-science. Nations that have strayed too far down the path of placing ideology ahead of science have come out losers, both economically and in terms of global power. Consider these examples from history, that are eerily echoed in today's antiscience politics:
Read the rest on Neorenaissance ...
But even then, things weren't as virulent as they are now, because the push was coming mostly from Southern social and religious conservatives, while today those conservatives are joined by the vested interests and deep pockets of big business. This is driving almost all of the new GOP freshmen lawmakers to take positions that are vehemently anti-climate science, pro-creationism, pro-abstinence only education, and seeking to personally vilify, harrass and attack scientists for their own political gain.
This has never been a successful strategy, and today's GOP should abandon it. Americans should support Republican candidates that are pro-science. Nations that have strayed too far down the path of placing ideology ahead of science have come out losers, both economically and in terms of global power. Consider these examples from history, that are eerily echoed in today's antiscience politics:
Read the rest on Neorenaissance ...
Saturday, July 16, 2011
Be a Budget Hero!
Think you might do better than President Barack Obama and congressional leaders in picking and choosing what government spending to cut — or taxes to raise — to stave off a debt showdown that could wreck the economy? A new computer game gives you, too, the chance to play "Budget Hero."
"Budget Hero 2.0" is an update of an original version that came out in 2008. It shows players just how difficult it might be to carry out their grand policy objectives — universal health care, extending the Bush tax cuts or ending foreign aid — and still keep the government from either becoming irrelevant, or going broke.
Read more at SFGate ...
"Budget Hero 2.0" is an update of an original version that came out in 2008. It shows players just how difficult it might be to carry out their grand policy objectives — universal health care, extending the Bush tax cuts or ending foreign aid — and still keep the government from either becoming irrelevant, or going broke.
Read more at SFGate ...
Thursday, May 12, 2011
Questioning Some Economic Assumptions
Let me see if I have this right. I could be wrong, so feel free to correct me.
For thirty years you believed Republicans when they said deficits don't matter. While they were promoting this idea, you were happy with the tax cuts they made, believing that "starving the beast" was a good thing because Republicans told you it was.
Now you've changed your tune and you believe that deficits do matter but hasn't occurred to you that they lied to you for thirty years about deficits. Deficits do matter and they told you they didn't.
In the meantime, they've cut taxes - i.e. revenue - and made up the difference by borrowing so that the government could maintain it's obligations to it's people. Even though they've cut revenue income and replaced it with borrowed funds that must be repaid, you now believe them when they tell you that we have a spending crisis and not a revenue crisis?
Beyond that, when it comes to creating jobs you believe Republicans when they tell you that further tax cuts (additional reductions in revenue forcing more borrowing) will somehow create jobs. Yet the numbers are pretty clear. During the Clinton administration (eight years), more jobs were created than during the Reagan administration (eight years), the Bush I administration (four years) and the Bush II administration (eight years) ... combined! But, in spite of the numbers, you believe them.
When Republicans tell you that "tax credits" are a good thing you believe them because you believe anything that reduces taxes for anyone must be a good thing ... and because that's what Republicans have been telling you for years. They don't bother to mention that even though "tax credits" may reduce taxes for some, they leave a gap in tax revenue that must be made up for either by additional borrowing or higher taxes for others.
For years Republicans have told you that government is inefficient and you believe them ... in spite of the fact that Medicare (a government administered program) delivers excellent health care for 41.61 million people with only a 3% overhead while private insurance companies require more the 15% to provide service that's not as good. Paying 5x for the same or inferior service doesn't seem like the epitome of efficiency. (Ask anyone who's paid for their own insurance for any period of time before qualifying for Medicare which of the two they prefer.) Keep in mind that for the most part Medicare delivers services to people who are 65+; people who tend to need more health care services, while private insurance companies a.) serve a younger demographic who tend to need less health care overall, b.) have eliminated people with preexisting conditions (i.e., people who actually need health care) and retain people who don't need health care and c.) limit coverage with it gets too expensive - making the disparity even more striking.
Every system has waste but when Republicans talk about waste, they only talk about it in terms of government waste, without comparison to anything else ... but you believe them when they say government is wasteful. It is. But compared to what?
For thirty years you believed Republicans when they said deficits don't matter. While they were promoting this idea, you were happy with the tax cuts they made, believing that "starving the beast" was a good thing because Republicans told you it was.
Now you've changed your tune and you believe that deficits do matter but hasn't occurred to you that they lied to you for thirty years about deficits. Deficits do matter and they told you they didn't.
In the meantime, they've cut taxes - i.e. revenue - and made up the difference by borrowing so that the government could maintain it's obligations to it's people. Even though they've cut revenue income and replaced it with borrowed funds that must be repaid, you now believe them when they tell you that we have a spending crisis and not a revenue crisis?
Beyond that, when it comes to creating jobs you believe Republicans when they tell you that further tax cuts (additional reductions in revenue forcing more borrowing) will somehow create jobs. Yet the numbers are pretty clear. During the Clinton administration (eight years), more jobs were created than during the Reagan administration (eight years), the Bush I administration (four years) and the Bush II administration (eight years) ... combined! But, in spite of the numbers, you believe them.
When Republicans tell you that "tax credits" are a good thing you believe them because you believe anything that reduces taxes for anyone must be a good thing ... and because that's what Republicans have been telling you for years. They don't bother to mention that even though "tax credits" may reduce taxes for some, they leave a gap in tax revenue that must be made up for either by additional borrowing or higher taxes for others.
For years Republicans have told you that government is inefficient and you believe them ... in spite of the fact that Medicare (a government administered program) delivers excellent health care for 41.61 million people with only a 3% overhead while private insurance companies require more the 15% to provide service that's not as good. Paying 5x for the same or inferior service doesn't seem like the epitome of efficiency. (Ask anyone who's paid for their own insurance for any period of time before qualifying for Medicare which of the two they prefer.) Keep in mind that for the most part Medicare delivers services to people who are 65+; people who tend to need more health care services, while private insurance companies a.) serve a younger demographic who tend to need less health care overall, b.) have eliminated people with preexisting conditions (i.e., people who actually need health care) and retain people who don't need health care and c.) limit coverage with it gets too expensive - making the disparity even more striking.
Every system has waste but when Republicans talk about waste, they only talk about it in terms of government waste, without comparison to anything else ... but you believe them when they say government is wasteful. It is. But compared to what?
Wednesday, May 11, 2011
10 Republican Lies About the Bush Tax Cuts
So it's come down to this. On Saturday, David Stockman, the legendary Reagan budget chief who presided over the Gipper's supply-side tax cuts, announced that the "debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts." The next day, the former Fed chairman Alan Greenspan, who famously helped sell the 2001 Bush tax cuts to Congress, declared them simply "disastrous."
Sadly, Stockman and Greenspan are just about the only voices in the Republican Party speaking the truth about the fiscal devastation wrought by the expiring Bush tax cuts. After all, the national debt tripled under Ronald Reagan, only to double again during the tenure of George W. Bush. And as it turns out, the Bush tax cut windfall for the wealthy accounted for almost half the budget deficits during his presidency and, if made permanent, would contribute more to the U.S. budget deficit than the Obama stimulus, the TARP program, the wars in Afghanistan and Iraq, and revenue lost to the recession - combined. Of course, you'd never know it listening to the leaders of GOP.
Read up on the 10 Lies here ...
Sadly, Stockman and Greenspan are just about the only voices in the Republican Party speaking the truth about the fiscal devastation wrought by the expiring Bush tax cuts. After all, the national debt tripled under Ronald Reagan, only to double again during the tenure of George W. Bush. And as it turns out, the Bush tax cut windfall for the wealthy accounted for almost half the budget deficits during his presidency and, if made permanent, would contribute more to the U.S. budget deficit than the Obama stimulus, the TARP program, the wars in Afghanistan and Iraq, and revenue lost to the recession - combined. Of course, you'd never know it listening to the leaders of GOP.
Read up on the 10 Lies here ...
Sunday, May 08, 2011
An Open Apology to an Ayn Rand Fan
I'm sorry you've taken what I've said as an attack on your intellect. I admit that my interpersonal skills are flawed but I honestly though I was giving your opinions all the respect they are due. After all, you offered a tightly reasoned argument (in the form of an urban legend written by someone else that you didn't credit) and concluded "Socialism doesn't work."
I attempted to question your logic by offering a counter example of a situation in which capitalism didn't work (18th and early 19th century fire companies*) followed by a text book recitation of why it's a logical error to extract a general principle from a single, specific instance: effectively, if a saw fails at pounding nails does that mean it fails as a tool?
You quickly, succinctly and eloquently refuted my argument - well, not really refuted it. To refute it would involve pointing out where my error was. What you did say was, "I don't buy it."
Now, given that the example of fire companies that I gave is historically accurate and the recitation I provided demonstrating that it's a logical error to draw a general conclusion from a single instance parallels every textbook on the subject of logic, I can only conclude that what you're not buying is logic itself and that you have developed a means of analysis superior to logic. I'll take your word for it. Unfortunately, my intellect is saddled with the constraints of logic which render me incapable of "free thinking". I now recognize that logic is a handicap like the blinders worn by slavish draft horses that prevent them from looking at anything that isn't directly in front of them.
I admit that I made a grave error in neglecting to point out that the socialism practiced by the successful constitutional democracies of Europe (and Japan) is not quite the same socialism that was practiced by the totalitarian Soviet Union - which history indeed tells us failed - so you were right about history! Well, you were sorta right... if you assume the the socialism of the successful countries of Europe was the same as the Soviet socialism... but, heck, the Soviet Union did actually have "Socialist" in their name and that should be enough to settle the matter! (Of course, the National Socialist German Workers Party [NAZI] had socialist in their name, too, yet they were rabidly anti-Communist. History tells us that socialists were among the first people they sent to the camps .... but that's another story altogether.)
In the meantime, we'll just have to wait a bit for history to prove that the now successful countries of Europe will fail as a result of their misguided implementations of what I believe you would define as socialist ideas throughout their economies. But from my read of what you'd written, it's obvious that history will vindicate your position and that the now successful countries of Europe (and Japan) will eventually fail.
Far from questioning your intellect, I admire it! History shows us that single minded, blind dedication to an idea often triumphs over mere logic. That's why I recommended that you establish an economics consultancy in order to save the countries of Europe (and Japan) from their inevitable failure. I would not presume to do so myself because my knowledge of economics (hampered as it is by the restrictions of logic) is incomplete and obviously inadequate. But you, on the other hand - unhampered by logic and in possession of the truth that history shows us - that socialism doesn't work - have far more to offer than I would.
So, bottom line, I most sincerely apologize if you took what I have written as questioning your intellect. I hope that you will accept my apology in the spirit in which it's offered.
*Late 18th and early 19th century for-profit fire companies did, in the spirit of totally unrestricted , unregulated free enterprise, evolved a business model that would be admired by Mafia dons running down and dirty protection rackets in the early and mid-20th century - as in "pay up or we'll burn yer f&%king house down."
I attempted to question your logic by offering a counter example of a situation in which capitalism didn't work (18th and early 19th century fire companies*) followed by a text book recitation of why it's a logical error to extract a general principle from a single, specific instance: effectively, if a saw fails at pounding nails does that mean it fails as a tool?
You quickly, succinctly and eloquently refuted my argument - well, not really refuted it. To refute it would involve pointing out where my error was. What you did say was, "I don't buy it."
Now, given that the example of fire companies that I gave is historically accurate and the recitation I provided demonstrating that it's a logical error to draw a general conclusion from a single instance parallels every textbook on the subject of logic, I can only conclude that what you're not buying is logic itself and that you have developed a means of analysis superior to logic. I'll take your word for it. Unfortunately, my intellect is saddled with the constraints of logic which render me incapable of "free thinking". I now recognize that logic is a handicap like the blinders worn by slavish draft horses that prevent them from looking at anything that isn't directly in front of them.
I admit that I made a grave error in neglecting to point out that the socialism practiced by the successful constitutional democracies of Europe (and Japan) is not quite the same socialism that was practiced by the totalitarian Soviet Union - which history indeed tells us failed - so you were right about history! Well, you were sorta right... if you assume the the socialism of the successful countries of Europe was the same as the Soviet socialism... but, heck, the Soviet Union did actually have "Socialist" in their name and that should be enough to settle the matter! (Of course, the National Socialist German Workers Party [NAZI] had socialist in their name, too, yet they were rabidly anti-Communist. History tells us that socialists were among the first people they sent to the camps .... but that's another story altogether.)
In the meantime, we'll just have to wait a bit for history to prove that the now successful countries of Europe will fail as a result of their misguided implementations of what I believe you would define as socialist ideas throughout their economies. But from my read of what you'd written, it's obvious that history will vindicate your position and that the now successful countries of Europe (and Japan) will eventually fail.
Far from questioning your intellect, I admire it! History shows us that single minded, blind dedication to an idea often triumphs over mere logic. That's why I recommended that you establish an economics consultancy in order to save the countries of Europe (and Japan) from their inevitable failure. I would not presume to do so myself because my knowledge of economics (hampered as it is by the restrictions of logic) is incomplete and obviously inadequate. But you, on the other hand - unhampered by logic and in possession of the truth that history shows us - that socialism doesn't work - have far more to offer than I would.
So, bottom line, I most sincerely apologize if you took what I have written as questioning your intellect. I hope that you will accept my apology in the spirit in which it's offered.
*Late 18th and early 19th century for-profit fire companies did, in the spirit of totally unrestricted , unregulated free enterprise, evolved a business model that would be admired by Mafia dons running down and dirty protection rackets in the early and mid-20th century - as in "pay up or we'll burn yer f&%king house down."
Thursday, May 05, 2011
Who Really Won This Round?
The question that troubles me is who is going to have the last laugh?
In his first taped statement following the 9/11 attack, bed Linen outlined his strategy. His objective, he said, was to bankrupt America. His plan was to do something very dramatic (9/11) to which we'd have to react. He succeeded. He anticipated that we would over react. We did. We put an army in the field at great cost. Bed Linen must have been rolling with laughter when we invaded Iraq and opened a second war in a place that would be significantly more expensive to field an army that Afghanistan. That it had nothing to do with him and his 9/11 attack on us was frosting on the cake. A standing army in somebody else's country generally pi$$es of the people of that country (not to mention all of their friends). The invasion of Iraq a.) divided all those who supported us in our actions in Afghanistan to that point; b.) united our enemies in the Arab world and c.) provided an unimaginably fantastic recruiting tool for al Qaeda and their franchises throughout the world.
Now, with a war cost estimated by some to be on the order of $3T (economist Joseph Stiglitz [1],) including external war fighting, internal security and off budget, "emergency" funding .. we are finding that we are close to bankruptcy. Mission accomplished?
Bed Linen had a template and a proof of concept already in hand. The Soviet Union was tied up in Afghanistan for a decade and, as much as some of us like to think that Reagan telling Gorby to "tear down that wall" did the trick - it was Afghanistan that was the straw on the camels back that broke the Soviet Union. Their economy simply couldn't sustain an arms race with us and a never ending war in Afghanistan. One or the other, maybe ... but not both.
While we played checkers for the better part of a decade, bed Linen was playing chess. He's dead ... but we're close to bankrupt and running around like chickens with our heads cut off, trying to figure a way out of a dilemma we've created for ourselves by sending armies to do what a team of SEALS supported by good "police work" could have accomplished in the first place.
We got him! Yes!
But I don't think there's much to celebrate if, in the end, he accomplishes his mission anyway.
In his first taped statement following the 9/11 attack, bed Linen outlined his strategy. His objective, he said, was to bankrupt America. His plan was to do something very dramatic (9/11) to which we'd have to react. He succeeded. He anticipated that we would over react. We did. We put an army in the field at great cost. Bed Linen must have been rolling with laughter when we invaded Iraq and opened a second war in a place that would be significantly more expensive to field an army that Afghanistan. That it had nothing to do with him and his 9/11 attack on us was frosting on the cake. A standing army in somebody else's country generally pi$$es of the people of that country (not to mention all of their friends). The invasion of Iraq a.) divided all those who supported us in our actions in Afghanistan to that point; b.) united our enemies in the Arab world and c.) provided an unimaginably fantastic recruiting tool for al Qaeda and their franchises throughout the world.
Now, with a war cost estimated by some to be on the order of $3T (economist Joseph Stiglitz [1],) including external war fighting, internal security and off budget, "emergency" funding .. we are finding that we are close to bankruptcy. Mission accomplished?
Bed Linen had a template and a proof of concept already in hand. The Soviet Union was tied up in Afghanistan for a decade and, as much as some of us like to think that Reagan telling Gorby to "tear down that wall" did the trick - it was Afghanistan that was the straw on the camels back that broke the Soviet Union. Their economy simply couldn't sustain an arms race with us and a never ending war in Afghanistan. One or the other, maybe ... but not both.
While we played checkers for the better part of a decade, bed Linen was playing chess. He's dead ... but we're close to bankrupt and running around like chickens with our heads cut off, trying to figure a way out of a dilemma we've created for ourselves by sending armies to do what a team of SEALS supported by good "police work" could have accomplished in the first place.
We got him! Yes!
But I don't think there's much to celebrate if, in the end, he accomplishes his mission anyway.
Wednesday, April 06, 2011
The Ducabores Explain Economics
My father once told me a story about the Ducabores, a tribe in the wilds of Siberia. It seems that a rare species of potent psychotropic mushroom grew in their region and, when ever some of the mushrooms were found, it was cause for great celebration. On the evening of the find, the women brewed a strong tea from the mushrooms. However, because the mushrooms were very rare, only the headmen of the tribe (the leaders and wealthiest) could have the tea. The good news was that the tea lost only a little of it's potency as it passed through the body so, the lesser of the tribe waited for the inevitable, cups in hand near the tribal latrine. When the headmen came to relieve themselves, the precious, golden liquid was captured in the waiting cups so that all in the tribe could share in the good times.
When ever I hear someone use the term "trickle down economics", this image leaps to mind.
When ever I hear someone use the term "trickle down economics", this image leaps to mind.
Wednesday, March 16, 2011
Tax Incentives Might Not Work the Way You Think They Do
Ya know ... I've been wondering. Why do these "business friendly" folks think for a minute that low taxes are particularly good for business. They aren't.
As an investor (I've got a couple bucks on the table), if taxes are low, I'm encouraged to speculate ... follow a run up, then take profits at the high point because low taxes means there's no significant tax penalty for taking my profits out of the company.
On the other hand, if taxes are high, the incentive is to leave my profits on the table, invested in the company because, if I take the profits I get hit with high taxes on the income (increase in stock price). As long as I leave my money invested in the company it can grow with the company and suffer no tax penalty ... and it can grow infinitely as long as I don't trade, taking the money out of the company I invested in.
There are implications that go further. Companies can't count on my investment for expansion, which in turn would mean jobs. If they maximize profits on a quarterly basis, they can be assured I'll be there .... for the short term ... but not for the long haul. Higher taxes gives me incentive to keep my money in place ... giving them a resource they can count on ... which allows them to grow the business (rather than playing games with the books to satisfy short term speculation). Lower taxes give me incentive to keep my money on the move.
One of the most productive times in history was the period following the Second World War (1945 to Reagan) ... businesses expanded, we had a steel industry, we had a textile industry and we exported more than we imported. We made money hand over fist ... and taxes on income at the high end were between 70% and 90%. An investment was an investment in the classical sense of the term. It stayed put. Now, with lower taxes, so-called investment moves in and out of companies like the tides. At high tide a company cannot imagine expansion or hiring because they know that low tide is coming.
I'm sure I'm not the only person on the planet who's aware of this. Personally, it doesn't matter to me whether the taxes are higher or lower - you play the game by the rules and, be assured, all rules have good sides and bad sides ... changing the tax rules only shifts the strategy, not necessarily the outcome.
As an investor (I've got a couple bucks on the table), if taxes are low, I'm encouraged to speculate ... follow a run up, then take profits at the high point because low taxes means there's no significant tax penalty for taking my profits out of the company.
On the other hand, if taxes are high, the incentive is to leave my profits on the table, invested in the company because, if I take the profits I get hit with high taxes on the income (increase in stock price). As long as I leave my money invested in the company it can grow with the company and suffer no tax penalty ... and it can grow infinitely as long as I don't trade, taking the money out of the company I invested in.
There are implications that go further. Companies can't count on my investment for expansion, which in turn would mean jobs. If they maximize profits on a quarterly basis, they can be assured I'll be there .... for the short term ... but not for the long haul. Higher taxes gives me incentive to keep my money in place ... giving them a resource they can count on ... which allows them to grow the business (rather than playing games with the books to satisfy short term speculation). Lower taxes give me incentive to keep my money on the move.
One of the most productive times in history was the period following the Second World War (1945 to Reagan) ... businesses expanded, we had a steel industry, we had a textile industry and we exported more than we imported. We made money hand over fist ... and taxes on income at the high end were between 70% and 90%. An investment was an investment in the classical sense of the term. It stayed put. Now, with lower taxes, so-called investment moves in and out of companies like the tides. At high tide a company cannot imagine expansion or hiring because they know that low tide is coming.
I'm sure I'm not the only person on the planet who's aware of this. Personally, it doesn't matter to me whether the taxes are higher or lower - you play the game by the rules and, be assured, all rules have good sides and bad sides ... changing the tax rules only shifts the strategy, not necessarily the outcome.
Sunday, May 23, 2010
This can't end well
The USA has five percent of the world population:
... and two percent of the global oil reserves.
On a per capita basis, the people of the USA use 66.3 barrels of oil each annually versus and average of about 10.6 for everyone else on the planet. In gallons, that's 2,784.6 gallons per person versus 445.2. (Based on 42 gallons per barrel.)
The question is, how long can this be sustained until it becomes a point of serious contention?
... and for those folks who imagine we can somehow "Drill, Baby, Drill" our way out of this ... perhaps you can show me how the numbers work in your plan.
(Statistics based on Wolfram database queries.)
... and two percent of the global oil reserves.
On a per capita basis, the people of the USA use 66.3 barrels of oil each annually versus and average of about 10.6 for everyone else on the planet. In gallons, that's 2,784.6 gallons per person versus 445.2. (Based on 42 gallons per barrel.)
The question is, how long can this be sustained until it becomes a point of serious contention?
... and for those folks who imagine we can somehow "Drill, Baby, Drill" our way out of this ... perhaps you can show me how the numbers work in your plan.
(Statistics based on Wolfram database queries.)
Friday, April 23, 2010
Guns v. Butter 2010
See if you can identify the bleeding heart liberal who said this:
Noam Chomsky? Michael Moore? Bernie Sanders?
Nope, it was that unrepentant lefty, five-star general Dwight Eisenhower, in 1953, just a few months after taking office -- a time when the economy was booming and unemployment was 2.7 percent.
Read more about our priorities and how they work against us on Huffington Post after the click ...
"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children."
Noam Chomsky? Michael Moore? Bernie Sanders?
Nope, it was that unrepentant lefty, five-star general Dwight Eisenhower, in 1953, just a few months after taking office -- a time when the economy was booming and unemployment was 2.7 percent.
Read more about our priorities and how they work against us on Huffington Post after the click ...
Saturday, February 20, 2010
The Tea Party isn't a movement ... it's a cult.
"In a recent poll almost ninety percent of Tea Baggers said that they thought taxes had either gone up or stayed the same under Obama. Only two percent thought they went down. But the reality is taxes have gone down for ninety five percent of working families taxes went down.
"Think about that. Only two percent of the people in a "movement" about taxes named after a tax revolt have the slightest idea what's going on ... with taxes."
Or watch the video on Crooks and Liars after the click.
Saturday, February 13, 2010
Modern Mythology
This post is a re-do of a previous post but in a more digest-able format. If you'd like to use this presentation, you can link to it here. I'll add to the presentation over time as I find or develop charts and graphs that highlight some of the myths we hear about economics and economic theory.
Subscribe to:
Posts (Atom)