This writing involves an article in the December 19 issue of Chemical and Engineering News entitled, "US Firms Detail Investments".
A 3.3 billion pound per year cracker will be constructed at Cedar Bayou, Texas. A 1.1 billion pound polyethylene plant will be constructed at Cedar Bayou or Sweeney, Texas. Expansion of ethylene capacity by 850,000,000 pounds will be made at Laporte, Texas. A 1.7 billion pound methanol plant will be restarted in Channelview, Texas. A propylene-producing metathesis unit will also be constructed at Channelview.
Two companies are studying a polypropylene oxide/tertiary butyl alcohol plant for China.
If the US investment climate is bad, why these several major investments in Texas? The answer is a combination of favorable investment climate and proximity to markets. In spite of the fact that the Obama Administration is antagonistic to business with its various regulations and high taxes, Texas has offered compensating factors. It has no state income tax, so that in spite of high federal taxes, the total tax burden is less significant. The products produced in Texas are also available to various parts of the US at freight costs considerably less than materials produced abroad.
Unfortunately, the petrochemical nature of these high-dollar value investments do not produce many jobs. Many of the individual operations are automated, but those few jobs available are high-paying. However, the low-cost availability of these products to other customer-manufacturers in the US does contribute materially to secondary jobs. If these basic petrochemical investments were made abroad rather than in the US, those secondary jobs would likely also not be available.
The bottom line is that a favorable investment climate not only promotes investment, but also results in jobs. We now have in the US high unemployment, because the investment climate is more favorable to production overseas.
Friday, December 30, 2011
Investment Climate
This writing is based on another article in the December 19 issue of Chemical and Engineering News. The article is entitled, "Air Products Invests in China".
The basic business of Air Products and Chemicals Is to separate nitrogen and oxygen from air. The Air Products investment in China is to supply another Chinese company with oxygen and nitrogen for converting coal to various oil products. Air Products has also constructed an ammonia plant in China to supply ammonia to another Chinese company for manufacture of light-emitting diodes. The obvious question is why is Air Products pumping its investment money into China. The answer is fairly obvious,. While we have lots of coal in the US and could also convert coal into oil products, the Obama Administration is stuck on renewable energy and makes it almost impossible to justify the conversion of coal to oil.
The ammonia situation is not significantly different. The ammonia generation must go where the light emitting diodes are produced. Why not produce light emitting diodes in the United States? The answer again is an unfavorable business climate, as developed by the Obama Administration. Labor costs are high and there too many regulations, all of which lead to insufficient return on investment. Since the return on investment in China is higher, that's where light emitting diodes will be produced and also where Air Products justifies having an ammonia manufacturing plant.
The basic business of Air Products and Chemicals Is to separate nitrogen and oxygen from air. The Air Products investment in China is to supply another Chinese company with oxygen and nitrogen for converting coal to various oil products. Air Products has also constructed an ammonia plant in China to supply ammonia to another Chinese company for manufacture of light-emitting diodes. The obvious question is why is Air Products pumping its investment money into China. The answer is fairly obvious,. While we have lots of coal in the US and could also convert coal into oil products, the Obama Administration is stuck on renewable energy and makes it almost impossible to justify the conversion of coal to oil.
The ammonia situation is not significantly different. The ammonia generation must go where the light emitting diodes are produced. Why not produce light emitting diodes in the United States? The answer again is an unfavorable business climate, as developed by the Obama Administration. Labor costs are high and there too many regulations, all of which lead to insufficient return on investment. Since the return on investment in China is higher, that's where light emitting diodes will be produced and also where Air Products justifies having an ammonia manufacturing plant.
Thursday, December 29, 2011
Speaker Boehner Doesn't Understand Reduced Spending
e-mail to Rep. Neugebauer:
In the December 19 issue of Chemical and Engineering News, Susan Morrissey has an article entitled, Rocky Road for Federal budget". It concerns the fact that Democrats have stalled passage of an omnibus spending bill, apparently developed by House Republicans. The stalling actually involves a dispute on the included payroll tax, which is not part of the omnibus spending. It is said that the spending bill was approved by sections of both the House and Senate. The spending bill includes nine fiscal 2012 appropriations bills.
Let us recall that we have a tremendous national debt and a tremendous budget deficit. We have been looking for ways to reduce government spending, but this is what the House Republicans have come up with and which has been generally accepted by the Senate: The total spending bill is $915 billion, which is almost $1 trillion.
The Department of Defense gets a cut of an almost insignificant 3%. The Department of Energy, which I previously said should be completely eliminated, maintains an expenditure of $1.8 billion. That apparently does not include Department of Energy scientific research, which will grow from $46 million to $4.9 billion. The budget for the National Institutes of Health will grow by 1%.The NIH grants, which I have been railing against, will remain unchanged. The EPA will get an almost insignificant cut of 3%. .
If House Speaker Boehner considers this to be a reasonable approach for fiscal funding of government, he needs to be taken out.
In the December 19 issue of Chemical and Engineering News, Susan Morrissey has an article entitled, Rocky Road for Federal budget". It concerns the fact that Democrats have stalled passage of an omnibus spending bill, apparently developed by House Republicans. The stalling actually involves a dispute on the included payroll tax, which is not part of the omnibus spending. It is said that the spending bill was approved by sections of both the House and Senate. The spending bill includes nine fiscal 2012 appropriations bills.
Let us recall that we have a tremendous national debt and a tremendous budget deficit. We have been looking for ways to reduce government spending, but this is what the House Republicans have come up with and which has been generally accepted by the Senate: The total spending bill is $915 billion, which is almost $1 trillion.
The Department of Defense gets a cut of an almost insignificant 3%. The Department of Energy, which I previously said should be completely eliminated, maintains an expenditure of $1.8 billion. That apparently does not include Department of Energy scientific research, which will grow from $46 million to $4.9 billion. The budget for the National Institutes of Health will grow by 1%.The NIH grants, which I have been railing against, will remain unchanged. The EPA will get an almost insignificant cut of 3%. .
If House Speaker Boehner considers this to be a reasonable approach for fiscal funding of government, he needs to be taken out.
Tuesday, December 20, 2011
EU Carbon Tax on Airlines
Cheryl Hogue has an article entitled, "Unfriendly Skies" in the October 17 issue of Chemical and Engineering News. It is basically about an argument between international airlines and the European Union. The European Union (EU) says that when airline flights enter EU space, they generate significant quantities of carbon dioxide through the burning of their jet fuel. The EU says the airlines are subject to "Cap & Trade", which essentially means they must pay tax. The airline object, because it will cost money.
This is only a small segment of the many arguments which involve Cap & Trade, not only at the European Union level, but which also in the US
It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the collapse of the Soviet Union, Western Europe has been continually moving toward a socialistic culture. However, the inherent economics of socialism is starting to catch up with them. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. Collectively, they will all go down to defeat, as the EU is unable to meet its obligations to the various populations.
These obligations involve governmental benefits, such as free housing, free medical care, etc., without the production level to sustain these costs. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms been developed. The latest of these is the "carbon tax", which has previously been disguised as "Cap & Trade". It is just another new name for a tax to postpone the eventual collapse of socialism, as governments are unable to obtain sufficient revenue to continue the offering of benefits to its populations.
This is only a small segment of the many arguments which involve Cap & Trade, not only at the European Union level, but which also in the US
It may be interesting to review Cap & Trade, for what it really is; a government tax.
Since the collapse of the Soviet Union, Western Europe has been continually moving toward a socialistic culture. However, the inherent economics of socialism is starting to catch up with them. We see this in the economic problems of Greece, followed by Italy and Spain. Even Germany will eventually not be exempt. Collectively, they will all go down to defeat, as the EU is unable to meet its obligations to the various populations.
These obligations involve governmental benefits, such as free housing, free medical care, etc., without the production level to sustain these costs. In an effort to maintain solvency in the various governmental coffers, and the EU in total, various tax forms been developed. The latest of these is the "carbon tax", which has previously been disguised as "Cap & Trade". It is just another new name for a tax to postpone the eventual collapse of socialism, as governments are unable to obtain sufficient revenue to continue the offering of benefits to its populations.
Tuesday, November 29, 2011
Sending Money to the EU Would Be Idiocy
Open e-mail to Rep. Neugebauer:
Randy,
The European Union (EU) is collapsing economically. With its economic collapse, it will return to an earlier form of Western Europe. Namely, individual countries, with individual currencies and national governments.
The EU's impending collapse is a result of individual member governments giving more money to their citizens, than they have collected by taxing productive individuals and enterprises. The individual citizens have no desire to give up their pensions and other government benefits and strongly resist any governmental efforts to make such reductions. Cite the riots in Greece. While tax cheats are prevalent, particularly in Italy, the likelihood that governments can obtain significantly more revenue from taxes is remote. Traditional bankruptcy is imminent for the EU as a whole and many of the individual member countries. And, when I say traditional bankruptcy, I don't mean the standard weasel wording bankruptcies of Chapters 9 and 11 in the US. I mean "out of business".
There has been talk of a US bailout of the EU. This is not only ridiculous. It is downright idiotic. The US suffers from the same disease as the EU, but at a slightly lower level, and it is anticipated that it will catch up and will eventually take its turn on total bankruptcy. Attempts to cut US government expenditures have been futile, and we are already deeply in debt. How can any rational person think that by our borrowing more money to give to the European Union, for a temporary relief of their problem, will solve anything?
We must take notice of what has happened to the EU and watch its fall. Perhaps we can learn something from the observation and take some real action so that we do not follow the same route.
There has been talk that if we don't increase our own debt by borrowing money to give to the EU, it will negatively impact our own economy through reduction of our exports. Think of it in practical terms. We should borrow money to give to the EU so that they can give back our borrowed money and take our manufactured goods in return? What kind of logic is this? Why stop there? Why not give money to the Russian government so they can pass it on to their people, who will buy our skis and snowmobiles?
What happens when no one will lend us any more money to give away? Or even when no one else in the world has any more money? We then revert to the Middle Ages, when there was no economic or technological progress. There are more people in the world now and more people available to starve to death, as they will be unable to buy food or produce their own.
Let's get off this idiocy and return to free-market trading, which has existed for thousands of years. You sell goods to people, if they have the money to pay for them. Without money, don't sell and they do without. It is only in the modern concept of idiocy that one could dream up the idea of giving someone money so that he can buy your goods.
Randy,
The European Union (EU) is collapsing economically. With its economic collapse, it will return to an earlier form of Western Europe. Namely, individual countries, with individual currencies and national governments.
The EU's impending collapse is a result of individual member governments giving more money to their citizens, than they have collected by taxing productive individuals and enterprises. The individual citizens have no desire to give up their pensions and other government benefits and strongly resist any governmental efforts to make such reductions. Cite the riots in Greece. While tax cheats are prevalent, particularly in Italy, the likelihood that governments can obtain significantly more revenue from taxes is remote. Traditional bankruptcy is imminent for the EU as a whole and many of the individual member countries. And, when I say traditional bankruptcy, I don't mean the standard weasel wording bankruptcies of Chapters 9 and 11 in the US. I mean "out of business".
There has been talk of a US bailout of the EU. This is not only ridiculous. It is downright idiotic. The US suffers from the same disease as the EU, but at a slightly lower level, and it is anticipated that it will catch up and will eventually take its turn on total bankruptcy. Attempts to cut US government expenditures have been futile, and we are already deeply in debt. How can any rational person think that by our borrowing more money to give to the European Union, for a temporary relief of their problem, will solve anything?
We must take notice of what has happened to the EU and watch its fall. Perhaps we can learn something from the observation and take some real action so that we do not follow the same route.
There has been talk that if we don't increase our own debt by borrowing money to give to the EU, it will negatively impact our own economy through reduction of our exports. Think of it in practical terms. We should borrow money to give to the EU so that they can give back our borrowed money and take our manufactured goods in return? What kind of logic is this? Why stop there? Why not give money to the Russian government so they can pass it on to their people, who will buy our skis and snowmobiles?
What happens when no one will lend us any more money to give away? Or even when no one else in the world has any more money? We then revert to the Middle Ages, when there was no economic or technological progress. There are more people in the world now and more people available to starve to death, as they will be unable to buy food or produce their own.
Let's get off this idiocy and return to free-market trading, which has existed for thousands of years. You sell goods to people, if they have the money to pay for them. Without money, don't sell and they do without. It is only in the modern concept of idiocy that one could dream up the idea of giving someone money so that he can buy your goods.
Tuesday, November 8, 2011
Cut Promotional and Grant Funding to Federal Science Agencies
In her article "Prioritizing Science Funding", October 24 Issue of Chemical & Engineering News, Susan Morrissey says, "Members of a key congressional science committee believe that fiscal 2012 federal budget could be trimmed by over $1.5 billion through cuts to science agencies without undermining the role of science and innovation in the US's long-term economic growth".
I agree with that 100%.
The letter to Congress' Joint Select Committee on Deficit Production comes from 11 Republican House members, of the House Science, Space & Technology Committee.
Two operations which the National Foundation and the National Institute of Standards & Technology engage in and which I strongly object to are promotion programs and research grants, primarily to universities. It is through those two operations, which the agencies wield political power for the administration and should be eliminated. One program specifically mentioned by the Committee for abolishment is the Advanced Research Project Agency-Energy program (ARPA-E). I heartily agree. This program wastes millions and perhaps billions of dollars pursuing the Administration's undefined dream of "Clean" energy, when we have made great strides in improving cleanliness of fossil fuel use.
I agree with that 100%.
The letter to Congress' Joint Select Committee on Deficit Production comes from 11 Republican House members, of the House Science, Space & Technology Committee.
Two operations which the National Foundation and the National Institute of Standards & Technology engage in and which I strongly object to are promotion programs and research grants, primarily to universities. It is through those two operations, which the agencies wield political power for the administration and should be eliminated. One program specifically mentioned by the Committee for abolishment is the Advanced Research Project Agency-Energy program (ARPA-E). I heartily agree. This program wastes millions and perhaps billions of dollars pursuing the Administration's undefined dream of "Clean" energy, when we have made great strides in improving cleanliness of fossil fuel use.
Thursday, November 3, 2011
Treasury Sec. Geither Can Radically Cut Production of US President $1 Coins
Open e-mail to Rep. Neugebauer:
Randy,
My associate, Gordon Anderson, has brought to my attention an ABC video clip by reporter Dianne Sawyer, which shows that the US Mint is producing Presidential $1 coins in quantities well above reason. http://abcnews.go.com/WNT/video/coins-costing-taxpayers-14076274 (after the Merck commercial).
The clip indicates that "By act of Congress", the Philadelphia Mint is producing the coins at the rate of $600,000 per day, Since there is essentially no circulation demand, the coins are being stored. Present stored coins have a $1 billion face value. Additional storage space will be required for additional minted coins, until the project is terminated in 2016. The new storage facility will cost $650,000 and shipping cost will be $3 million. Rep. Jack Reed was a cosponsor of the original bill. In the clip, he recommends Congress do something about the problem.
Wikipedia also has an extensive presentation of the program. Included is a reference to Rep. Jackie Speier of California, who is currently circulating a “Dear Colleague” letter recommending that the U.S. not produce any dollar coins. She plans to introduce legislation calling for the immediate halting of all dollar coin programs. http://en.wikipedia.org/wiki/Presidential_$1_Coin_Program.
With that background, I decided to look at the Act itself.
The "Presidential $1 Coin Act of 2005’’ (Public Law 109-145) requires the US Mint, among other requirements, to produce each year a quantity of $1 coins commemorating four US Presidents, until all Presidents have been so honored. The Act included an Amendment to Section 5112 of Title 31, United States Code, with the addition of:
‘‘(n) REDESIGN AND ISSUANCE OF CIRCULATING $1 COINS HONORING EACH OF THE PRESIDENTS OF THE UNITED STATES.—" and related subparagraphs.
The quantity of issued (minted?) coins is specified in:
‘‘(4) ISSUANCE OF COINS COMMEMORATING 4 PRESIDENTS DURING EACH YEAR OF THE PERIOD.—
‘‘(B) NUMBER OF 4 CIRCULATING COIN DESIGNS IN EACH YEAR.—The Secretary shall prescribe, on the basis of such factors as the Secretary determines to be appropriate, the number of $1 coins that shall be issued with each of the designs selected for each year of the period referred to in paragraph (1).
(http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ145.109.pdf)
If I understand this correctly, Congress does not need to take any legislative action to stop the exorbitant minting. A simple phone call to Secretary of the Treasury Timothy Geithner suggesting that he cut the volume of coins for each President to say $1000 should be enough to do the trick. If Geithner is uncooperative, you might ask for a Congressional hearing to have him explain publicly why he continues this exorbitant minting.
Randy,
My associate, Gordon Anderson, has brought to my attention an ABC video clip by reporter Dianne Sawyer, which shows that the US Mint is producing Presidential $1 coins in quantities well above reason. http://abcnews.go.com/WNT/video/coins-costing-taxpayers-14076274 (after the Merck commercial).
The clip indicates that "By act of Congress", the Philadelphia Mint is producing the coins at the rate of $600,000 per day, Since there is essentially no circulation demand, the coins are being stored. Present stored coins have a $1 billion face value. Additional storage space will be required for additional minted coins, until the project is terminated in 2016. The new storage facility will cost $650,000 and shipping cost will be $3 million. Rep. Jack Reed was a cosponsor of the original bill. In the clip, he recommends Congress do something about the problem.
Wikipedia also has an extensive presentation of the program. Included is a reference to Rep. Jackie Speier of California, who is currently circulating a “Dear Colleague” letter recommending that the U.S. not produce any dollar coins. She plans to introduce legislation calling for the immediate halting of all dollar coin programs. http://en.wikipedia.org/wiki/Presidential_$1_Coin_Program.
With that background, I decided to look at the Act itself.
The "Presidential $1 Coin Act of 2005’’ (Public Law 109-145) requires the US Mint, among other requirements, to produce each year a quantity of $1 coins commemorating four US Presidents, until all Presidents have been so honored. The Act included an Amendment to Section 5112 of Title 31, United States Code, with the addition of:
‘‘(n) REDESIGN AND ISSUANCE OF CIRCULATING $1 COINS HONORING EACH OF THE PRESIDENTS OF THE UNITED STATES.—" and related subparagraphs.
The quantity of issued (minted?) coins is specified in:
‘‘(4) ISSUANCE OF COINS COMMEMORATING 4 PRESIDENTS DURING EACH YEAR OF THE PERIOD.—
‘‘(B) NUMBER OF 4 CIRCULATING COIN DESIGNS IN EACH YEAR.—The Secretary shall prescribe, on the basis of such factors as the Secretary determines to be appropriate, the number of $1 coins that shall be issued with each of the designs selected for each year of the period referred to in paragraph (1).
(http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ145.109.pdf)
If I understand this correctly, Congress does not need to take any legislative action to stop the exorbitant minting. A simple phone call to Secretary of the Treasury Timothy Geithner suggesting that he cut the volume of coins for each President to say $1000 should be enough to do the trick. If Geithner is uncooperative, you might ask for a Congressional hearing to have him explain publicly why he continues this exorbitant minting.
Saturday, October 1, 2011
Recent Federal Spending Cuts Are Not Significant With Respect to the Budget Deficit
In the August 8th issue of C & E News, there is an article entitled, "Science and the Debt Deal" by three C&E News reporters.
They indicate that the raising of the federal ceiling by Pres. Obama included a deal to reduce $900 billion in federal discretionary funds over the next 10 years. $90 billion per year in budget cuts is not significant compared to a budget deficit of $1.5 trillion.
Even so, none of the projected $90 billion annual cut in spending will occur immediately.
Since that annual cut is insignificant with respect to the total problem, Congress should quit quibbling with that and get on with the major project of eliminating whole agencies, such as the Department of Energy and the Department of Education.
They indicate that the raising of the federal ceiling by Pres. Obama included a deal to reduce $900 billion in federal discretionary funds over the next 10 years. $90 billion per year in budget cuts is not significant compared to a budget deficit of $1.5 trillion.
Even so, none of the projected $90 billion annual cut in spending will occur immediately.
Since that annual cut is insignificant with respect to the total problem, Congress should quit quibbling with that and get on with the major project of eliminating whole agencies, such as the Department of Energy and the Department of Education.
Thursday, September 22, 2011
Congress Must Reduce Funding to Agencies Doling out Research Grants
C&E News has in their July 25 issue an article entitled, "Aiding Innovation in Tough Fiscal Times". At a forum in June, researchers said, "The US is losing its competitive edge as a result of lack of funding for innovation by both government and private investors." If you were a researcher receiving a government handout as a grant, wouldn't you be tempted to say the same thing, especially since the Republican House is looking for ways to reduce expenditures?
Francis Collins, Director of the National Institute of health (NIH) said that NIH used to fund roughly one of every three grant proposals that it received, but with budget constraints it will fund only one of every six proposals. This doesn't really tell us anything, because with more public knowledge of the existence of the gravy train, there may be many more proposals than previous. But if he is right in his prognosis of reduced expenditures, Hooray!
Angela Belcher, a professor at MIT and an entrepreneur said venture capitalists were very helpful in the early stages of her career. That's fine, but not an excuse for government involvement. Private venture capitalists are investing their own money and look very critically at the possibilities of return. Government agency investors are investing taxpayer money and are bound to have less consideration for risk.
Collins also said that it is critical that the US cultivate its own scientists. No argument here. However, government does not make scientists. Scientists are developed through natural curiosity and talent followed by education, usually in colleges and universities. There's no question that government grants will aid scientists in further scientific developments, but in most cases young scientists have no concept of what is necessary for the real world. They are guided mostly by curiosity, wherein their impractical projects do not justify taxpayer funding. Government agencies are not in a position to make those determinations. Private companies and venture capitalists are.
Congress must reduce the budgets of these various federal agencies that have been doling out taxpayer funds for ridiculous projects. We never could afford it, but it has now become a critical issue.
Francis Collins, Director of the National Institute of health (NIH) said that NIH used to fund roughly one of every three grant proposals that it received, but with budget constraints it will fund only one of every six proposals. This doesn't really tell us anything, because with more public knowledge of the existence of the gravy train, there may be many more proposals than previous. But if he is right in his prognosis of reduced expenditures, Hooray!
Angela Belcher, a professor at MIT and an entrepreneur said venture capitalists were very helpful in the early stages of her career. That's fine, but not an excuse for government involvement. Private venture capitalists are investing their own money and look very critically at the possibilities of return. Government agency investors are investing taxpayer money and are bound to have less consideration for risk.
Collins also said that it is critical that the US cultivate its own scientists. No argument here. However, government does not make scientists. Scientists are developed through natural curiosity and talent followed by education, usually in colleges and universities. There's no question that government grants will aid scientists in further scientific developments, but in most cases young scientists have no concept of what is necessary for the real world. They are guided mostly by curiosity, wherein their impractical projects do not justify taxpayer funding. Government agencies are not in a position to make those determinations. Private companies and venture capitalists are.
Congress must reduce the budgets of these various federal agencies that have been doling out taxpayer funds for ridiculous projects. We never could afford it, but it has now become a critical issue.
Monday, September 19, 2011
Obama Deceit on Tax Rates for the Rich
Open e-mail to Rep. Neugebauer:
Randy,
How can we get this out as "news"?
Obama says that Warren Buffet's secretary is paying taxes at a higher rate than Buffet's secretary. Untrue! He's comparing apples with oranges and even then he is wrong. He is trying to promote economic class warfare to foster his Marxist program.
Let's look at the facts. Buffet is a "rich" person. His secretary is middle economic class. Buffet is "rich", because he has capital. To make money, he has to risk his capital, which means that if he makes mistakes, he can lose what he has. His secretary makes money by her efforts as a secretary. She does not risk any money she already has.
Buffet owns a corporation. If that corporation makes a profit, it would pay the corporate income tax rate of 39%. But let's say the corporate accountants find the loopholes and the corporation ends up paying only 20%. That comes out of Buffet's pocket. When Buffets files his personal income tax, he pays 15% on the money he receives from the corporation, after it has paid its' taxes. Add that to the 20% tax his corporation already paid and his total rate is 35%.
Let's say Buffet's secretary has a salary of $100,000. With various exemptions and deductions, such as mortgage interest, church, charity , other taxes, etc, his/her taxable income might be $70,000. Assume he/she is single. The tax then calculates to $13,625, which is 13.6% of his/her salary.
In summary, Buffet pays 35% on "apples" and his secretary pays 14% on "oranges". Buffet risks the money he has. His secretary does not. They both live in approximately the same life style. Buffet is only considered "rich", because he has control of assets and could change his lifestyle if he wished. He has the economic freedom to do so, but he prefers to live in a modest house and drive an old car.He also has the responsibilty of keeping his secretary employed, so that he/she can continue to collect $100,000 per year. For how many other countless individuals is he also economically responsible, in how he runs his corporation?
Randy,
How can we get this out as "news"?
Obama says that Warren Buffet's secretary is paying taxes at a higher rate than Buffet's secretary. Untrue! He's comparing apples with oranges and even then he is wrong. He is trying to promote economic class warfare to foster his Marxist program.
Let's look at the facts. Buffet is a "rich" person. His secretary is middle economic class. Buffet is "rich", because he has capital. To make money, he has to risk his capital, which means that if he makes mistakes, he can lose what he has. His secretary makes money by her efforts as a secretary. She does not risk any money she already has.
Buffet owns a corporation. If that corporation makes a profit, it would pay the corporate income tax rate of 39%. But let's say the corporate accountants find the loopholes and the corporation ends up paying only 20%. That comes out of Buffet's pocket. When Buffets files his personal income tax, he pays 15% on the money he receives from the corporation, after it has paid its' taxes. Add that to the 20% tax his corporation already paid and his total rate is 35%.
Let's say Buffet's secretary has a salary of $100,000. With various exemptions and deductions, such as mortgage interest, church, charity , other taxes, etc, his/her taxable income might be $70,000. Assume he/she is single. The tax then calculates to $13,625, which is 13.6% of his/her salary.
In summary, Buffet pays 35% on "apples" and his secretary pays 14% on "oranges". Buffet risks the money he has. His secretary does not. They both live in approximately the same life style. Buffet is only considered "rich", because he has control of assets and could change his lifestyle if he wished. He has the economic freedom to do so, but he prefers to live in a modest house and drive an old car.He also has the responsibilty of keeping his secretary employed, so that he/she can continue to collect $100,000 per year. For how many other countless individuals is he also economically responsible, in how he runs his corporation?
Thursday, September 15, 2011
Eliminate the Doling Out Of Taxpayer Funds by Federal Agencies to "Researchers"
Open e-mail to Rep. Neugebauer:
Randy,
The August 15th issue of C&E News has an article entitled, "Revisiting Grant Reviews". According to the article, the House Science Space and Technology Subcommittee on Research and Science Education last month reviewed the grant process. The grant process is a procedure whereby various agencies of the federal government dole out money to various private investigators, usually at universities, to fund projects, which the government agencies judge are significant.
I have said many times that the judgment of these agencies is very questionable. Such projects is why a butterfly beats its wings and how far a frog can jump, are not worthwhile projects for spending taxpayer money.
I have also said many times that the whole grant process involving taxpayer funds should be scuttled. We are now in tremendous debt, looking for various ways to reduce expenses, and this is one obvious way.
I am not opposed to science research. I am opposed to impractical science research. Projects such as how to better protect citizens from car bombs and other explosive devices or how to improve food production. are worthwhile endeavors. However, it does not take government to be involved in these things. We have private industries and industry groups whose job it is to do this. The function of government in this area is only to maintain a level playing field, such that none of these companies or organizations are tempted to collaborate to the disadvantage of the American public. Even as I say that, I am not particularly concerned, when I make a comparison of the damage already done by federal regulatory agencies and the squandering of money on taxpayer supported grants.
Randy, I say again, get rid of government grants. I notice that the subcommittee is asking for suggestions on how to make the merit review process of grant issuance more efficient. This disturbs me, because it implies that the subcommittee wants to maintain this economy destroying mechanism. Is it because the subcommittee members feel that they need to justify their jobs? I hope not. Given the opportunity to just draw their salaries and do nothing, versus drawing salaries and doing damage, I much prefer the former.
Randy,
The August 15th issue of C&E News has an article entitled, "Revisiting Grant Reviews". According to the article, the House Science Space and Technology Subcommittee on Research and Science Education last month reviewed the grant process. The grant process is a procedure whereby various agencies of the federal government dole out money to various private investigators, usually at universities, to fund projects, which the government agencies judge are significant.
I have said many times that the judgment of these agencies is very questionable. Such projects is why a butterfly beats its wings and how far a frog can jump, are not worthwhile projects for spending taxpayer money.
I have also said many times that the whole grant process involving taxpayer funds should be scuttled. We are now in tremendous debt, looking for various ways to reduce expenses, and this is one obvious way.
I am not opposed to science research. I am opposed to impractical science research. Projects such as how to better protect citizens from car bombs and other explosive devices or how to improve food production. are worthwhile endeavors. However, it does not take government to be involved in these things. We have private industries and industry groups whose job it is to do this. The function of government in this area is only to maintain a level playing field, such that none of these companies or organizations are tempted to collaborate to the disadvantage of the American public. Even as I say that, I am not particularly concerned, when I make a comparison of the damage already done by federal regulatory agencies and the squandering of money on taxpayer supported grants.
Randy, I say again, get rid of government grants. I notice that the subcommittee is asking for suggestions on how to make the merit review process of grant issuance more efficient. This disturbs me, because it implies that the subcommittee wants to maintain this economy destroying mechanism. Is it because the subcommittee members feel that they need to justify their jobs? I hope not. Given the opportunity to just draw their salaries and do nothing, versus drawing salaries and doing damage, I much prefer the former.
Eliminate US Corporate Tax Loopholes and Reduce the Rate
Open e-mail to Rep. Neugebauer:
Randy,
Worldwide corporate tax rates are a significant factor in determining where a company locates to do business. A 1% difference in tax rates means that there is that much more to pay to the business owners, as opposed to payment to government.
Here are some country groups, with their corporate rates:
39% - US and Japan
34% - France
30% - Australia, Canada, Germany, Mexico, New Zealand, and Spain
28% - Italy, Luxembourg, Norway, UK
26% - Finland, Netherlands, Portugal, Sweden
Some say that the 39% US corporate tax rate is not really that high, because of various exemptions. However, the fact is that when corporations are looking for a place to do business, they want to have some specific figures, not a supposition that they may qualify for certain benefits.
Let's get the tax code revised to eliminate loopholes and reduced to a reasonable level, say 26%, to give potential businesses a financial reason to come to the US. We need jobs, jobs, jobs!
Randy,
Worldwide corporate tax rates are a significant factor in determining where a company locates to do business. A 1% difference in tax rates means that there is that much more to pay to the business owners, as opposed to payment to government.
Here are some country groups, with their corporate rates:
39% - US and Japan
34% - France
30% - Australia, Canada, Germany, Mexico, New Zealand, and Spain
28% - Italy, Luxembourg, Norway, UK
26% - Finland, Netherlands, Portugal, Sweden
Some say that the 39% US corporate tax rate is not really that high, because of various exemptions. However, the fact is that when corporations are looking for a place to do business, they want to have some specific figures, not a supposition that they may qualify for certain benefits.
Let's get the tax code revised to eliminate loopholes and reduced to a reasonable level, say 26%, to give potential businesses a financial reason to come to the US. We need jobs, jobs, jobs!
Why Is BASF Investing in Brazil and Not in the US?
The August issue of C&E News has an article entitled, "BASF to Invest Big in Brazil". BASF is a huge German chemical company.
This is a relatively short article. It indicates the BASF will spend $720 million to build a world scale complex producing various acrylates for super absorbent. One retail example for super absorbent is in pads to handle incontinence.
The main question is why would BASF be investing in Brazil rather than in the US? The article doesn't say, but it might be worthwhile to speculate.
Brazil has found a large deposit of petroleum off its Atlantic Coast. In fact, Pres. Obama made a political faux pas by congratulating Brazil and indicating that we would be one of its best oil customers. While Brazil can be a good retail market, it is small compared to the US. Therefore, marketing consideration likely a significant factor in BASF's decision. More likely, they have looked at tax benefits and general favorable Brazilian government attitudes toward regulation as compared to those in the United States.
If this is true, it is another example of why we have in the USA a declining economy with related high unemployment. It would seem advisable for some of the state agencies, such as Texas, to ask BASF why they chose Brazil for their expansion, rather than taking advantage of the huge chemical complex already established in the Houston area.
This is a relatively short article. It indicates the BASF will spend $720 million to build a world scale complex producing various acrylates for super absorbent. One retail example for super absorbent is in pads to handle incontinence.
The main question is why would BASF be investing in Brazil rather than in the US? The article doesn't say, but it might be worthwhile to speculate.
Brazil has found a large deposit of petroleum off its Atlantic Coast. In fact, Pres. Obama made a political faux pas by congratulating Brazil and indicating that we would be one of its best oil customers. While Brazil can be a good retail market, it is small compared to the US. Therefore, marketing consideration likely a significant factor in BASF's decision. More likely, they have looked at tax benefits and general favorable Brazilian government attitudes toward regulation as compared to those in the United States.
If this is true, it is another example of why we have in the USA a declining economy with related high unemployment. It would seem advisable for some of the state agencies, such as Texas, to ask BASF why they chose Brazil for their expansion, rather than taking advantage of the huge chemical complex already established in the Houston area.
Friday, September 9, 2011
Taxing the Rich Explained in Beer Terms
Randy,
You may have seen this before, but one of my associates says it's time for a rerun.
Taxation Explained to the Masses.
Suppose that every evening, 10 men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this :-
The first four men (the poorest) would pay nothing.
The fifth would pay$1.
The sixth would pay$3.
The seventh would pay $7.
The eighth would pay$12.
The ninth would pay$18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do....... The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said, "Since you are all such good customers, I'm going to reduce the cost of your daily beer by $20".
Drinks for the 10 men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the$20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts. He suggested that each should now pay:
The fifth man, like the first four, now paid nothing.
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid$9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a dollar out of the$20 saving," declared the sixth man. He pointed to the tenth man, but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair - he got 10 times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy always win!"
"Wait a minute," yelled the first four men in unison, "We didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money among all of them for even half of the bill!
And that, boys and girls, journalists, labour unions and government ministers, is how our tax system works. The people who pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D. Professor of Economics.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
"Everyone crosses the finish line, winners just
find a better way to get there!"
You may have seen this before, but one of my associates says it's time for a rerun.
Taxation Explained to the Masses.
Suppose that every evening, 10 men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this :-
The first four men (the poorest) would pay nothing.
The fifth would pay$1.
The sixth would pay$3.
The seventh would pay $7.
The eighth would pay$12.
The ninth would pay$18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do....... The 10 men drank in the bar every evening and were quite happy with the arrangement, until one day, the owner said, "Since you are all such good customers, I'm going to reduce the cost of your daily beer by $20".
Drinks for the 10 men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the$20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts. He suggested that each should now pay:
The fifth man, like the first four, now paid nothing.
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid$9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a dollar out of the$20 saving," declared the sixth man. He pointed to the tenth man, but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair - he got 10 times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy always win!"
"Wait a minute," yelled the first four men in unison, "We didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money among all of them for even half of the bill!
And that, boys and girls, journalists, labour unions and government ministers, is how our tax system works. The people who pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D. Professor of Economics.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
"Everyone crosses the finish line, winners just
find a better way to get there!"
Pres. Proposes $237,000 to Make One New Job
Open e-mail to Rep. Neugebauer:
Randy,
Here is another unsolicited opinion from one of my associates.
ACS
-----Original Message-----
Subject: Obama's speech
Regarding the President’s speech on Thursday evening:
Hmmmm. Let’s see. $450 billion to create 1.9 million jobs (according to economist Mark Zandi who was asked by the White House to evaluate the President’s proposal) = $236,842 per job. Not a very good deal. Instead, why not just give the money directly to businesses to be spent entirely and directly on jobs. (And we know that most businesses are much more accountable and trustworthy than our government and politicians.) If businesses spent $32,142 per job created for one year, that would create 14 million jobs (a job for every person who is currently unemployed). We could stipulate that the $32,142 per job created be spent entirely on employee wages (the employer would need to cover the indirect costs of employment).
So for $450 billion we could create 14 million new jobs for one year @ a salary of $32,000 per job. The White House is proposing spending 450 billion to create 1.9 million jobs. No wonder our trust of the government and the White house is so low!
Oh, and one other little detail. How can we spend $450 billion dollars that we don't have, when we are already umpteen trillion dollars in debt with no way to repay it?
Randy,
Here is another unsolicited opinion from one of my associates.
ACS
-----Original Message-----
Subject: Obama's speech
Regarding the President’s speech on Thursday evening:
Hmmmm. Let’s see. $450 billion to create 1.9 million jobs (according to economist Mark Zandi who was asked by the White House to evaluate the President’s proposal) = $236,842 per job. Not a very good deal. Instead, why not just give the money directly to businesses to be spent entirely and directly on jobs. (And we know that most businesses are much more accountable and trustworthy than our government and politicians.) If businesses spent $32,142 per job created for one year, that would create 14 million jobs (a job for every person who is currently unemployed). We could stipulate that the $32,142 per job created be spent entirely on employee wages (the employer would need to cover the indirect costs of employment).
So for $450 billion we could create 14 million new jobs for one year @ a salary of $32,000 per job. The White House is proposing spending 450 billion to create 1.9 million jobs. No wonder our trust of the government and the White house is so low!
Oh, and one other little detail. How can we spend $450 billion dollars that we don't have, when we are already umpteen trillion dollars in debt with no way to repay it?
Sideshow Procedures in the Next Stimulus Bill
Open e-mail to Rep. Neugebauer:
Randy,
You and I heard the President's speech last night. I would like to make a few comments to put it into perspective.
He wants $500 billion for another stimulus program, which he does not want to call "stimulus". He specified a number of items on which this $500 billion would be spent, and with which we mostly have no argument. Essentially. It sounds good.
The "catch" lies in his repeated statement that he wants the bill passed now, now, now. Notice that the "now" is before he explains where he is going to obtain the $500 billion. He promises that will come up in two weeks, after you pass the bill.
Why would he do this? The answer is in a deceptive sales approach. In the first part you only talk about the icing on the cake. After you have bought the cake, you find out that the base is manure.
Pres. Obama is a tremendous speaker. He has wonderful experience from his early work in community organizing. He is so good that the average person will continue to believe him, even though he has time and again shown that his statements are not to be depended upon. We will not say that he's a liar, but we sure can say that he is a super rationalizer.
When I was a boy, we had Side Shows at Coney Island. One that I remember was a bull with human skin. The barker on the outside extolled the virtues of this wonderful animal and the difficulty they had in obtaining it. If you were dumb enough to even once pay your quarter to get to the inside, you found that it was a bull from which they had shaved all the hair.
Are you going to pay your "quarter" again to see in two weeks what wonderful things Pres. Obama has on the inside?
They say that a sucker is born every minute, which means that after some minutes there must be many suckers. I hope the suckers do not comprise the majority of our Congress.
Randy,
You and I heard the President's speech last night. I would like to make a few comments to put it into perspective.
He wants $500 billion for another stimulus program, which he does not want to call "stimulus". He specified a number of items on which this $500 billion would be spent, and with which we mostly have no argument. Essentially. It sounds good.
The "catch" lies in his repeated statement that he wants the bill passed now, now, now. Notice that the "now" is before he explains where he is going to obtain the $500 billion. He promises that will come up in two weeks, after you pass the bill.
Why would he do this? The answer is in a deceptive sales approach. In the first part you only talk about the icing on the cake. After you have bought the cake, you find out that the base is manure.
Pres. Obama is a tremendous speaker. He has wonderful experience from his early work in community organizing. He is so good that the average person will continue to believe him, even though he has time and again shown that his statements are not to be depended upon. We will not say that he's a liar, but we sure can say that he is a super rationalizer.
When I was a boy, we had Side Shows at Coney Island. One that I remember was a bull with human skin. The barker on the outside extolled the virtues of this wonderful animal and the difficulty they had in obtaining it. If you were dumb enough to even once pay your quarter to get to the inside, you found that it was a bull from which they had shaved all the hair.
Are you going to pay your "quarter" again to see in two weeks what wonderful things Pres. Obama has on the inside?
They say that a sucker is born every minute, which means that after some minutes there must be many suckers. I hope the suckers do not comprise the majority of our Congress.
Tuesday, September 6, 2011
Putin Pressing for Economic Control of Western Europe
EIN News says, "Putin Launches New Gas Link to Western Europe Russia put the first natural gas into the undersea Nord Stream pipeline to Western Europe at a ceremony attended by Prime Minister Vladimir Putin, an AFP correspondent reported. (france24.com)".
Following World War II, the Soviet Union attempted to control Europe with military might. It was partially successful, through temporary control of Eastern Europe. If had no control over Western Europe.
Ronald Reagan forced the Soviet Union into military escalation, which eventually caused its fall through bankruptcy. That forced the military release of the Soviets from Eastern Europe.
Vladimir Putin has a new strategy. He's now starting control of Western Europe through supplies of natural gas, which are sorely needed by Western Europeans, because of their lack of petroleum resources.
Putin is on the right track. He recognizes that the demise of the Soviet Union was caused by an economic collapse. The Obama Administration and the United States Congress do not seem to understand this as a potential for US demise.
If the US continues on its present economic course, within five years it will be replaced by China and Russia as the leading controllers of world economy.
Following World War II, the Soviet Union attempted to control Europe with military might. It was partially successful, through temporary control of Eastern Europe. If had no control over Western Europe.
Ronald Reagan forced the Soviet Union into military escalation, which eventually caused its fall through bankruptcy. That forced the military release of the Soviets from Eastern Europe.
Vladimir Putin has a new strategy. He's now starting control of Western Europe through supplies of natural gas, which are sorely needed by Western Europeans, because of their lack of petroleum resources.
Putin is on the right track. He recognizes that the demise of the Soviet Union was caused by an economic collapse. The Obama Administration and the United States Congress do not seem to understand this as a potential for US demise.
If the US continues on its present economic course, within five years it will be replaced by China and Russia as the leading controllers of world economy.
Wednesday, August 24, 2011
Aftermath of the Libyan Rebellion
EIN News says, "NATO Brass Plans for Limited Role in Post-Gadhafi Libya Mission NATO planners are drawing up options for a possible NATO role in Libya after the civil war in the North African nation ends, officials said Wednesday. (theglobeandmail.com)".
That may sound good to the Obama administration and even the US public in general, but let's remember that with the winning of the war against Qaddafi, the rebels are victorious and have on-site power, as opposed to the remoteness of NATO.
If I were a rebel, I would say thanks to NATO for having helped, but now go away, we don't need you anymore, unless you want to dump more money on us. Thanks for the first billion dollars.
I guess the rebels now have Obama by the groin. He either gives them more money, which I heard he plans to do, in order to save face, or bow out to take a more subservient attitude.
That may sound good to the Obama administration and even the US public in general, but let's remember that with the winning of the war against Qaddafi, the rebels are victorious and have on-site power, as opposed to the remoteness of NATO.
If I were a rebel, I would say thanks to NATO for having helped, but now go away, we don't need you anymore, unless you want to dump more money on us. Thanks for the first billion dollars.
I guess the rebels now have Obama by the groin. He either gives them more money, which I heard he plans to do, in order to save face, or bow out to take a more subservient attitude.
Tuesday, August 23, 2011
Is Killing Gadhafi Supporters a Humanitarian Effort?
EIN News says, "Fresh Fighting Erupts Between Libya Rebels, Regime Fresh fighting erupted in Tripoli on Tuesday hours after Moammar Gadhafi's son turned up free to thwart Libyan rebel claims he had been captured, a move that seems to have energized forces still loyal to the embattled regime. (nwsource.com)".
I almost cry when I think that Obama has dumped almost $1 billion of my money into this operation, 40% of which is a loan that I now have an obligation to repay.
We still don't know who the rebels are or what their agenda is. From what I can see on TV news, they are a mob not only intent on killing the Qaddafi supporters but also generally destroying the city of Tripoli. This seems similar to the riots, which had been taking place in London. $1 billion to support a mob just because we don't like Obama for having been involved in a plane crash killing Americans? Humans being what they are, can easily waste a lot of assets because of a negative emotion.
The other really disconcerting aspect is that Congress lets Obama get away with this ridiculous destruction of our economy.
I almost cry when I think that Obama has dumped almost $1 billion of my money into this operation, 40% of which is a loan that I now have an obligation to repay.
We still don't know who the rebels are or what their agenda is. From what I can see on TV news, they are a mob not only intent on killing the Qaddafi supporters but also generally destroying the city of Tripoli. This seems similar to the riots, which had been taking place in London. $1 billion to support a mob just because we don't like Obama for having been involved in a plane crash killing Americans? Humans being what they are, can easily waste a lot of assets because of a negative emotion.
The other really disconcerting aspect is that Congress lets Obama get away with this ridiculous destruction of our economy.
Monday, August 22, 2011
More Borrowed Money to You to Libya under the Guise "Humanitarian Aid"?
Open e-mail to Rep. Neugebauer:
Randy,
Pres. Obama is going to continue throwing US borrowed money at Libyan rebels. If you agree with this please tell me why. If you don't agree, what are you going to do about it?
An administrative spokesman said we will continue to supply funds to the rebels on the basis of humanitarian support. What a laugh! Who are the innocents that we are trying to protect? More money to rebels means they kill more Qaddafi supporters. Does that describe the definition of humanitarian aid?
Randy,
Pres. Obama is going to continue throwing US borrowed money at Libyan rebels. If you agree with this please tell me why. If you don't agree, what are you going to do about it?
An administrative spokesman said we will continue to supply funds to the rebels on the basis of humanitarian support. What a laugh! Who are the innocents that we are trying to protect? More money to rebels means they kill more Qaddafi supporters. Does that describe the definition of humanitarian aid?
New Agenda for Rep. Neugebauer
Open e-mail to Rep. Neugebauer:
Randy,
I just read your latest newsletter. I was impressed especially with the first paragraph where you said you were listening to Texans speaking out about the federal government’s impact on creating jobs. As I understand your job, you not only supposed to listen, you're supposed to take some kind of action. What do you doing to stop the federal government from destroying jobs as they have been doing.
Neal Boortz said on the radio this morning that in a specific period of time government regulatory agencies increased their budgets 16%, while the same time the GNP increased 3%. No way you could stop this or turn it around?
House Republicans are whistling in the dark with their budget proposals, as long as the deck is loaded against them with a preponderance of Marxist Democrats with opposing points of view. Past time to stop playing a game and get on with some other aspect of progress. That would involve some innovative thought, much like Pres. Obama has used to bypass Congress on other things he wanted passed, such as the dream act and similar activities, wherein he uses Executive Order.
Forget the idea of encouraging small business owners to share their opinions and views on the federal government’s impact on the economy.. All small business owners and even the rest of us know the answer to that one . Let's forget the lamentations and sympathy groups and get on with the business of cracking the heads of government regulators.
Forget the abortion act, chaplains, and defense of marriage act. You have much more important things to do. If you don't know what they are, please reread my first four paragraphs.
Randy,
I just read your latest newsletter. I was impressed especially with the first paragraph where you said you were listening to Texans speaking out about the federal government’s impact on creating jobs. As I understand your job, you not only supposed to listen, you're supposed to take some kind of action. What do you doing to stop the federal government from destroying jobs as they have been doing.
Neal Boortz said on the radio this morning that in a specific period of time government regulatory agencies increased their budgets 16%, while the same time the GNP increased 3%. No way you could stop this or turn it around?
House Republicans are whistling in the dark with their budget proposals, as long as the deck is loaded against them with a preponderance of Marxist Democrats with opposing points of view. Past time to stop playing a game and get on with some other aspect of progress. That would involve some innovative thought, much like Pres. Obama has used to bypass Congress on other things he wanted passed, such as the dream act and similar activities, wherein he uses Executive Order.
Forget the idea of encouraging small business owners to share their opinions and views on the federal government’s impact on the economy.. All small business owners and even the rest of us know the answer to that one . Let's forget the lamentations and sympathy groups and get on with the business of cracking the heads of government regulators.
Forget the abortion act, chaplains, and defense of marriage act. You have much more important things to do. If you don't know what they are, please reread my first four paragraphs.
Friday, August 19, 2011
Solving US Unemployment
When we talk about US unemployment, we are talking about jobs, which is uppermost in the news these days. Roughly 10% of the potential working population is without a job. For the person without a job, it means available spending money less than what he would have if he were employed. The reduction is not great, because he is now receiving employment compensation from the people. The fact that continued unemployment compensation is questionable, because of a potentially bankrupt government, is a bit of a worry but not immediately so.
Now let's take a look at availability of goods and services. On a worldwide basis, there seems to be no shortage of goods or services for people who need, want, appreciate, and could use them. For example, I have two air-conditioners. Why would I need another? Could someone else use another air-conditioner? Perhaps, but maybe not. Maybe they like a higher temperature. Maybe they don't want to increase their electric bills. Maybe it would eliminate an excuse to spend a week or two at the shore.
Perhaps a member of some tribe in central Africa should have a new computer. But what would he do with it? He may want it because it looks pretty, but it is likely that he would have no concept of how to use it. Even if he did, how would he power it? How would he connect to the Internet? One might say all that is true, but the converse is to look at the great opportunities for developing education, electricity production, etc.. While all of that is also true,where would this person obtain the money to buy the computer, obtain his education to use it and pay his electric bill? It is likely that he couldn't. Then, someone must give it to him as a gift. This would also have its disadvantages in that subsequent gifts would eventually run out, as the donor becomes unable to handle the increasing quantity of gifts. This would result in developing an entitlement attitude, which likely will result in bloodshed, because the person receiving begins eventually loses sense of appreciation and develops an animosity to the donor.
Sounds kind of hopeless, doesn't it? But wait, it can appear to get worse.
Going back to worldwide availability of goods and services, we presently seem to be in approximate balance, with respect to supply and ability to pay. In all probability, availability of goods and services probably exceeds the ability of customers to purchase. Take a look at the multitude of cereal brands in the supermarket and the vitamin shelves. For Americans, there is an excess of products and services to purchase.
Let's now suppose that we make some kind of an arrangement where the 10% unemployed are now put to work producing goods and services. This will increase availability of goods and services by roughly 10%. For what purpose? We already have enough goods and services. One can say that that we should export these goods and services to the populations in other countries which have an insufficiency. But how will those potential customers be able to pay? Likelihood is they can't and we now resort to gift giving. But how long can it continue? Our country is already in deficit spending.
Another aspect is that eliminating the 10% US unemployment would not necessarily increase goods and services in the US by that amount, but would reduce imports so that the same amount of goods and services would be available here. This means that we would be trading jobs. Production workers in Guatemala and South Korea would then become unemployed, as their jobs would be taken over by Americans. This would be exactly the reverse of what has been taking place over the past 10 to 20 years. How would we feel about making a Guatemalan unemployed? Would our compassion allow it?
What's the bottom line? Follow two of life's rules. First take care of the number one guy. That's you. As your facilities and compassion allow, then take care of others. The second rule is Quid pro quo, which means something for something. That is, when you give to the underprivileged, expect something in return, either personally or to society. Follow these two rules, beware of usurpers, and the world will take care of itself.
Now let's take a look at availability of goods and services. On a worldwide basis, there seems to be no shortage of goods or services for people who need, want, appreciate, and could use them. For example, I have two air-conditioners. Why would I need another? Could someone else use another air-conditioner? Perhaps, but maybe not. Maybe they like a higher temperature. Maybe they don't want to increase their electric bills. Maybe it would eliminate an excuse to spend a week or two at the shore.
Perhaps a member of some tribe in central Africa should have a new computer. But what would he do with it? He may want it because it looks pretty, but it is likely that he would have no concept of how to use it. Even if he did, how would he power it? How would he connect to the Internet? One might say all that is true, but the converse is to look at the great opportunities for developing education, electricity production, etc.. While all of that is also true,where would this person obtain the money to buy the computer, obtain his education to use it and pay his electric bill? It is likely that he couldn't. Then, someone must give it to him as a gift. This would also have its disadvantages in that subsequent gifts would eventually run out, as the donor becomes unable to handle the increasing quantity of gifts. This would result in developing an entitlement attitude, which likely will result in bloodshed, because the person receiving begins eventually loses sense of appreciation and develops an animosity to the donor.
Sounds kind of hopeless, doesn't it? But wait, it can appear to get worse.
Going back to worldwide availability of goods and services, we presently seem to be in approximate balance, with respect to supply and ability to pay. In all probability, availability of goods and services probably exceeds the ability of customers to purchase. Take a look at the multitude of cereal brands in the supermarket and the vitamin shelves. For Americans, there is an excess of products and services to purchase.
Let's now suppose that we make some kind of an arrangement where the 10% unemployed are now put to work producing goods and services. This will increase availability of goods and services by roughly 10%. For what purpose? We already have enough goods and services. One can say that that we should export these goods and services to the populations in other countries which have an insufficiency. But how will those potential customers be able to pay? Likelihood is they can't and we now resort to gift giving. But how long can it continue? Our country is already in deficit spending.
Another aspect is that eliminating the 10% US unemployment would not necessarily increase goods and services in the US by that amount, but would reduce imports so that the same amount of goods and services would be available here. This means that we would be trading jobs. Production workers in Guatemala and South Korea would then become unemployed, as their jobs would be taken over by Americans. This would be exactly the reverse of what has been taking place over the past 10 to 20 years. How would we feel about making a Guatemalan unemployed? Would our compassion allow it?
What's the bottom line? Follow two of life's rules. First take care of the number one guy. That's you. As your facilities and compassion allow, then take care of others. The second rule is Quid pro quo, which means something for something. That is, when you give to the underprivileged, expect something in return, either personally or to society. Follow these two rules, beware of usurpers, and the world will take care of itself.
Monday, August 1, 2011
Another Socialistic Rant from the American Chemical Society
Rudy Baum is again on his Communistic/Socialistic rant. For those who may not be familiar with Rudy, he is the Chief Editor of Chemical and Engineering News, the face-piece magazine of the American Chemical Society. We don't know what Rudy calls himself, but it is clear from his writings that he is a dyed in the wool Communist/Socialist. Since the ACS keeps him on as Editor in Chief, it is also apparent that the ACS similarly has these Socialistic leanings.
In the July 18 issue of C&E News, Rudy presented an editorial entitled "What Kind of Nation?". That is merely a title, since his editorial actually concerns the US debt ceiling and future budgets.
He starts out by saying that it's not about freedom. He says the European nations have a social welfare system more developed than that of the US and yet they are more free. We all know that Western Europe has become strongly socialistic, and Rudy apparently thinks that is a great development.
More specifically, Rudy is now bemoaning the fact that the House of Representatives cut the Food and Drug Administration budget by $87 million. This is a 10% cut, with the remaining budget almost 3/4 of $1 billion per year. There's no question that food safety is important to the American public, but the American public also has some responsibility in what they purchase and what they eat. There is such a thing as a market force. If word gets around that Company A's product seems to be less safe than Company B's, Company A will soon be out of business through decreased sales. A socialistic government seems to ignore that fact. Rudy supports his rant against the cut by saying that 28,000 more people will end up in the hospital in 3,000 will die. With his great intuition, apparently he is able to collect these facts by ignoring that those people to whom he refers, are likely to be mostly sick and in process of dying anyhow.
Rudy's second rant is against cutting budgets for state parks. He says the parks will close and people will no longer have access to them. Baloney! State parks can charge admission fees directly to the public in the same manner as most entertainment enterprises, such as sporting events and amusement parks. If the public doesn't want to lay out funds for entrance fees, it is obvious that it is not that much interested. Government should not be telling people what they should be attending by some kind of subsidization making it look like it's a free entrance, when in fact they have paid through the nose through taxes.
Rudy's last rant is against a House Committee's bill that terminates funding for the James Web Space Telescope. The JWST was supposed to be a replacement for the Hubble telescope. The original budget was $5 billion. It is now $1.5 billion over budget and up to three years behind schedule. Rudy says that's not uncommon for such projects. My point of view is that if proposers of projects cannot estimate their costs within 30+ percent, they should not bother to make an estimate. However, I suspect that the original $5 billion budget was intentionally placed at the low end, in a deceptive maneuver to gain approval and with the assumption that once the project is going, it would be easier to gain additional funding. Congratulations to the Subcommittee for their bill. I personally like the pictures from the Hubble telescope, and it would be nice to obtain better pictures from the JWST, but after all they are just pictures, and we can't afford it.
Rudy's final comment is that the US is not broke. He is correct in that statement, but more accurately should say that the US is not broke yet. When the government spends $4 billion more per day than its income, without any hope of a significant change, it is only a matter of time before we will be broke. He says we are losing faith in the future and unwilling to protect our citizens from bad food and substandard drugs, invest in the infrastructure and continue to advance science. I agree to that but only because Rudy, the US President, and Congress apparently do not understand money.
In the July 18 issue of C&E News, Rudy presented an editorial entitled "What Kind of Nation?". That is merely a title, since his editorial actually concerns the US debt ceiling and future budgets.
He starts out by saying that it's not about freedom. He says the European nations have a social welfare system more developed than that of the US and yet they are more free. We all know that Western Europe has become strongly socialistic, and Rudy apparently thinks that is a great development.
More specifically, Rudy is now bemoaning the fact that the House of Representatives cut the Food and Drug Administration budget by $87 million. This is a 10% cut, with the remaining budget almost 3/4 of $1 billion per year. There's no question that food safety is important to the American public, but the American public also has some responsibility in what they purchase and what they eat. There is such a thing as a market force. If word gets around that Company A's product seems to be less safe than Company B's, Company A will soon be out of business through decreased sales. A socialistic government seems to ignore that fact. Rudy supports his rant against the cut by saying that 28,000 more people will end up in the hospital in 3,000 will die. With his great intuition, apparently he is able to collect these facts by ignoring that those people to whom he refers, are likely to be mostly sick and in process of dying anyhow.
Rudy's second rant is against cutting budgets for state parks. He says the parks will close and people will no longer have access to them. Baloney! State parks can charge admission fees directly to the public in the same manner as most entertainment enterprises, such as sporting events and amusement parks. If the public doesn't want to lay out funds for entrance fees, it is obvious that it is not that much interested. Government should not be telling people what they should be attending by some kind of subsidization making it look like it's a free entrance, when in fact they have paid through the nose through taxes.
Rudy's last rant is against a House Committee's bill that terminates funding for the James Web Space Telescope. The JWST was supposed to be a replacement for the Hubble telescope. The original budget was $5 billion. It is now $1.5 billion over budget and up to three years behind schedule. Rudy says that's not uncommon for such projects. My point of view is that if proposers of projects cannot estimate their costs within 30+ percent, they should not bother to make an estimate. However, I suspect that the original $5 billion budget was intentionally placed at the low end, in a deceptive maneuver to gain approval and with the assumption that once the project is going, it would be easier to gain additional funding. Congratulations to the Subcommittee for their bill. I personally like the pictures from the Hubble telescope, and it would be nice to obtain better pictures from the JWST, but after all they are just pictures, and we can't afford it.
Rudy's final comment is that the US is not broke. He is correct in that statement, but more accurately should say that the US is not broke yet. When the government spends $4 billion more per day than its income, without any hope of a significant change, it is only a matter of time before we will be broke. He says we are losing faith in the future and unwilling to protect our citizens from bad food and substandard drugs, invest in the infrastructure and continue to advance science. I agree to that but only because Rudy, the US President, and Congress apparently do not understand money.
Tuesday, July 26, 2011
Raise the Federal Debt Limit?
Open e-mail to Representative Neugebauer:
Randy,
Your question of the week was, "If the government does not raise the debt ceiling and defaults on its loans and other payments, do you believe you and your family will be affected?"
Not a good question. Everything that government does affects every resident of the United States and probably most residents of the world in some way or another. If the government does not raise the debt ceiling, it will affect us. If the government does raise the debt ceiling, it will affect us.
Either way, it is not necessary that we default on loans and other payments. We may delay, but if we get our house in order, we will be able to pay interest and principal on government bonds, plus interest for the late payment. Similarly, we should be able to pay in time any delayed salaries or other bills, also with the late payment interest.
Rather than an obvious "yes" or "no", the correct answer to raising the debt limit is that we will likely do more damage to the country if we raise it. Therefore, be sure to vote against it.
Randy,
Your question of the week was, "If the government does not raise the debt ceiling and defaults on its loans and other payments, do you believe you and your family will be affected?"
Not a good question. Everything that government does affects every resident of the United States and probably most residents of the world in some way or another. If the government does not raise the debt ceiling, it will affect us. If the government does raise the debt ceiling, it will affect us.
Either way, it is not necessary that we default on loans and other payments. We may delay, but if we get our house in order, we will be able to pay interest and principal on government bonds, plus interest for the late payment. Similarly, we should be able to pay in time any delayed salaries or other bills, also with the late payment interest.
Rather than an obvious "yes" or "no", the correct answer to raising the debt limit is that we will likely do more damage to the country if we raise it. Therefore, be sure to vote against it.
Federal Spending Cuts
E-mail to Rep. Neugebauer:
Randy,
I have been previously too nonspecific in my suggestion of eliminating our federal overspending through radical spending cuts.
In the following, I apologize for not having the figures of how much the overspending can be reduced, but I'm sure that these figures are available to you. Consider the following:
Eliminate the Department of Energy. It has done nothing since its inception except to inhibit production of indigenous sources of energy, particularly oil.
Eliminate the Department of Education. It is a super drain of funds to public schools, which then obligates schools to abide by the socialistic teachings of the Administration.
Eliminate half of the Department of Interior. The section that must be eliminated is that related to restrictions on indigent energy production.
Eliminate half of the EPA. Start with the section which has been using climate change to support Pres. Obama's program on Cap & Trade for CO2.
Eliminate most of the National Science Foundation (NSF). It dumps large amounts of money on university research projects of insignificant value and support of destructive political agendas.
Eliminate any research aspects of the Department of Health and Human Services. This function can be performed readily by private enterprise, particularly pharmaceutical companies.
Eliminate half of the Department of Homeland Security. It is a boondoggle operation, rampant with inefficiency and obvious inability to control our borders. Allow border states to do their own border control.
Some sections of the Department of Commerce can be eliminated, part
icularly those that are promoting commerce internationally. Private enterprise has this responsibility.
Reduce the Department of Labor. It is infested with union protected devices, which restrict general employment.
Reduce the Department of State. It is primarily engaged in nation building, for which we have no responsibility. The other section to be eliminated involves foreign aid and political grants.
The reduction in spending from the above is twofold. It decreases the cost of department operation, such as salaries, pensions, travel expenses, and building construction/maintenance, as well as reducing the funds which these organizations dole out to others.
Randy,
I have been previously too nonspecific in my suggestion of eliminating our federal overspending through radical spending cuts.
In the following, I apologize for not having the figures of how much the overspending can be reduced, but I'm sure that these figures are available to you. Consider the following:
Eliminate the Department of Energy. It has done nothing since its inception except to inhibit production of indigenous sources of energy, particularly oil.
Eliminate the Department of Education. It is a super drain of funds to public schools, which then obligates schools to abide by the socialistic teachings of the Administration.
Eliminate half of the Department of Interior. The section that must be eliminated is that related to restrictions on indigent energy production.
Eliminate half of the EPA. Start with the section which has been using climate change to support Pres. Obama's program on Cap & Trade for CO2.
Eliminate most of the National Science Foundation (NSF). It dumps large amounts of money on university research projects of insignificant value and support of destructive political agendas.
Eliminate any research aspects of the Department of Health and Human Services. This function can be performed readily by private enterprise, particularly pharmaceutical companies.
Eliminate half of the Department of Homeland Security. It is a boondoggle operation, rampant with inefficiency and obvious inability to control our borders. Allow border states to do their own border control.
Some sections of the Department of Commerce can be eliminated, part
icularly those that are promoting commerce internationally. Private enterprise has this responsibility.
Reduce the Department of Labor. It is infested with union protected devices, which restrict general employment.
Reduce the Department of State. It is primarily engaged in nation building, for which we have no responsibility. The other section to be eliminated involves foreign aid and political grants.
The reduction in spending from the above is twofold. It decreases the cost of department operation, such as salaries, pensions, travel expenses, and building construction/maintenance, as well as reducing the funds which these organizations dole out to others.
Federal Government Spending
This is an exchange of correspondence with Rep. Neugebauer on federal government spending.
Dear Randy,
I previously wrote you requesting that you strongly oppose raising the federal debt limit. You replied with the form letter message below.
Congratulations! I clearly deduce from your message that your heart and your mind are in the best interests of our country. My only concern is how strong are your beliefs and how strongly you will fight against the Administration, which is obviously using debt and fear to radically change our economic viability as a means to change our culture.
-----Original Message-----
Sent: Monday, July 25, 2011 8:50 AM
To: 'Arthur Sucsy'
Subject: RE: No Reason to Raise Federal Debt Limit
Thank you for contacting me about government spending. I always appreciate your suggestions and feedback about this critical issue that affects every American. I share your concerns about the future of our country if Washington fails to make significant spending cuts. I also agree that many government programs have had negative effects on our country and have started to threaten the values that have always made America great.
At a time in our history when we are running trillion dollar deficits annually, President Obama and his administration do not seem to notice or care about the serious debt situation facing our nation. I want you to know I am aware of this problem, as are most of my Republican colleagues.
For too long, Washington forgot who it was serving and ignored the voices of the people. Not only did we spend money we didn't have, but your hard-earned tax dollars were spent without regard to the consequences that the fiscal irresponsibility would have for our nation. Washington paid little attention to the huge burdens that reckless spending would create for future generations. At this rate, our nation will go bankrupt if we do not dramatically cut back on government spending and put an end to budget tricks, accounting gimmicks and empty promises.
I strongly believe that to get our fiscal house in order, we must begin to take immediate, common sense steps before it is too late. As a business owner, I know firsthand that a business cannot be sustainable if it constantly spends more than it brings in-neither can a government. At the start of the 112th Congress in January 2011, Speaker Boehner reduced Congressional spending for each Member and Committee by 5% per year. In my office, this was a cut of $70,000. While that savings is not large independently, it is a start and it also sends a message that everyone can find ways to trim their budgets. During consideration of H.R. 1, the appropriations bill to fund the government for the remainder of 2011 Fiscal Year, I supported nearly every non-defense spending cut proposed, and was rated by independent groups as one of the most conservative voters on amendments for that bill. I also voted to strip federal funding from Planned Parenthood and many of the ill-advised initiatives of the EPA. At a time when we are asking American families to tighten their belts, government must take every opportunity to do the same. We cannot ask the American people to accept difficult choices and cuts to programs, if we, as government leaders, are not willing to do the same ourselves.
As you know, in recent years, government spending has skyrocketed out of control. Our annual deficits have accelerated from billions of dollars each year, to trillions of dollars each year, with no end in sight. As the economy has faltered, the government and the Obama Administration have made the decision to bailout or take over many struggling industries, ranging from health care, to car companies, to banks. I want you to know that I have opposed all of these bills and policies which have increased our spending and bailed out those who have made bad decisions. I voted against the $700 billion Troubled Asset Relief Program (TARP) also commonly referred to as the "Wall Street Bailout." I voted against the failed $800 billion American Recovery and Reinvestment Act also known as the "Stimulus Bill." I voted against the health care bill, "ObamaCare," that raised taxes and will significantly increase the cost of health care. And finally, I voted against the Dodd-Frank financial reform bill that raises the cost of capital for everyone, limits the financial products available to consumers, fails to prevent future bailouts, and does nothing to reform Fannie Mae and Freddie Mac. I have voted against these failed initiatives and I commit to you that I will continue to hold strong against these liberal bills and agendas.
Additionally, I have personally introduced legislation that will force Congress and President Obama to fix our country's spending problem. The proposed legislation would amend the Constitution to require a two-thirds vote in the House and Senate in order to increase taxes or the debt limit. That would ensure that Washington focus on cutting spending which is the real problem that has led to our $14+ trillion debt. I have also joined many of my colleagues in supporting a balanced budget amendment to the U.S. Constitution.
We must take the necessary action to get this country on a sustainable fiscal path so that our children and grandchildren get a chance to have the same opportunities enjoyed by current generations of Americans. I realize these cuts will have an effect on some programs people have come to rely on, and undoubtedly we will see cuts to well-intentioned programs we simply can't afford. However, it is imperative we make these difficult decisions on behalf of future generations of Americans.
Please be assured that as I represent you in Congress, I will continue to fight for a stronger America which includes reducing spending and ensuring that existing resources are being properly utilized. Thank you again for contacting me. I value your input and I hope that you will always contact me with your concerns.
Dear Randy,
I previously wrote you requesting that you strongly oppose raising the federal debt limit. You replied with the form letter message below.
Congratulations! I clearly deduce from your message that your heart and your mind are in the best interests of our country. My only concern is how strong are your beliefs and how strongly you will fight against the Administration, which is obviously using debt and fear to radically change our economic viability as a means to change our culture.
-----Original Message-----
Sent: Monday, July 25, 2011 8:50 AM
To: 'Arthur Sucsy'
Subject: RE: No Reason to Raise Federal Debt Limit
Thank you for contacting me about government spending. I always appreciate your suggestions and feedback about this critical issue that affects every American. I share your concerns about the future of our country if Washington fails to make significant spending cuts. I also agree that many government programs have had negative effects on our country and have started to threaten the values that have always made America great.
At a time in our history when we are running trillion dollar deficits annually, President Obama and his administration do not seem to notice or care about the serious debt situation facing our nation. I want you to know I am aware of this problem, as are most of my Republican colleagues.
For too long, Washington forgot who it was serving and ignored the voices of the people. Not only did we spend money we didn't have, but your hard-earned tax dollars were spent without regard to the consequences that the fiscal irresponsibility would have for our nation. Washington paid little attention to the huge burdens that reckless spending would create for future generations. At this rate, our nation will go bankrupt if we do not dramatically cut back on government spending and put an end to budget tricks, accounting gimmicks and empty promises.
I strongly believe that to get our fiscal house in order, we must begin to take immediate, common sense steps before it is too late. As a business owner, I know firsthand that a business cannot be sustainable if it constantly spends more than it brings in-neither can a government. At the start of the 112th Congress in January 2011, Speaker Boehner reduced Congressional spending for each Member and Committee by 5% per year. In my office, this was a cut of $70,000. While that savings is not large independently, it is a start and it also sends a message that everyone can find ways to trim their budgets. During consideration of H.R. 1, the appropriations bill to fund the government for the remainder of 2011 Fiscal Year, I supported nearly every non-defense spending cut proposed, and was rated by independent groups as one of the most conservative voters on amendments for that bill. I also voted to strip federal funding from Planned Parenthood and many of the ill-advised initiatives of the EPA. At a time when we are asking American families to tighten their belts, government must take every opportunity to do the same. We cannot ask the American people to accept difficult choices and cuts to programs, if we, as government leaders, are not willing to do the same ourselves.
As you know, in recent years, government spending has skyrocketed out of control. Our annual deficits have accelerated from billions of dollars each year, to trillions of dollars each year, with no end in sight. As the economy has faltered, the government and the Obama Administration have made the decision to bailout or take over many struggling industries, ranging from health care, to car companies, to banks. I want you to know that I have opposed all of these bills and policies which have increased our spending and bailed out those who have made bad decisions. I voted against the $700 billion Troubled Asset Relief Program (TARP) also commonly referred to as the "Wall Street Bailout." I voted against the failed $800 billion American Recovery and Reinvestment Act also known as the "Stimulus Bill." I voted against the health care bill, "ObamaCare," that raised taxes and will significantly increase the cost of health care. And finally, I voted against the Dodd-Frank financial reform bill that raises the cost of capital for everyone, limits the financial products available to consumers, fails to prevent future bailouts, and does nothing to reform Fannie Mae and Freddie Mac. I have voted against these failed initiatives and I commit to you that I will continue to hold strong against these liberal bills and agendas.
Additionally, I have personally introduced legislation that will force Congress and President Obama to fix our country's spending problem. The proposed legislation would amend the Constitution to require a two-thirds vote in the House and Senate in order to increase taxes or the debt limit. That would ensure that Washington focus on cutting spending which is the real problem that has led to our $14+ trillion debt. I have also joined many of my colleagues in supporting a balanced budget amendment to the U.S. Constitution.
We must take the necessary action to get this country on a sustainable fiscal path so that our children and grandchildren get a chance to have the same opportunities enjoyed by current generations of Americans. I realize these cuts will have an effect on some programs people have come to rely on, and undoubtedly we will see cuts to well-intentioned programs we simply can't afford. However, it is imperative we make these difficult decisions on behalf of future generations of Americans.
Please be assured that as I represent you in Congress, I will continue to fight for a stronger America which includes reducing spending and ensuring that existing resources are being properly utilized. Thank you again for contacting me. I value your input and I hope that you will always contact me with your concerns.
Government Spending Cuts
I e-mailed Rep. Neugebauer suggesting that the Federal debt limit should not be raised. Our problem is government overspending. He replied with a form letter concerning details of the Cut/Cap/Balance bill passed by the House. My latest e-mail covers the futility of that bill
Randy,
I am opposed to your Cut/Cap/Balance bill for the following reasons:
The bill requires a spending cut of $111 billion per year. The government is now overspending by $4 billion per day. That's $1.46 trillion per year. $111 Billion per year is 7.6% of what is needed to create balance. Is this a joke or have I missed something?
The "Cap" portion requires a reduction from 25% to 19.7%, and that only after seven years. This is an absolute reduction of 5.3%. US GDP is $14.7 trillion. 5.3% Of that means a spending cut of $779 billion per year. Since we are overspending by $1.46 trillion per year, we will still be overspending after seven years at the rate of $681 billion per year or almost $2 billion per day. Is this another joke?
The Balanced Budget Amendment sounds good. If I take it at its apparent meaning, it would mean that we would be overspending zero dollars per day. My only hesitation is the meaning of "budget". That term has come to mean a hoped-for situation, which can be easily ignored depending upon apparent circumstances.
-----Original Message-----
Sent: Monday, July 25, 2011 8:51 AM
To: 'Arthur Sucsy'
Subject: RE: No Reason to Raise Federal Debt Limit
Thank you for contacting me regarding the debt ceiling. I share your concerns about the future of our country if Washington fails to make significant spending cuts. We have a government that spends too much, borrows too much, and taxes too much. As your Representative, my top priority in Congress is to rein in spending and clean up this mess before it is too late.
As you know, Washington continues to grapple with the need to raise the debt limit, which currently stands at $14.29 trillion. Earlier this year, the Treasury Department sent a letter to Congress indicating that August 2nd would be the last day the U.S. government would be able to pay all of its bills without an increase in the debt limit. Washington has maxed out its credit card and it is time for serious and significant change.
To shift the direction our country is headed, my colleagues and I have created a responsible plan that would require fundamental change before any increase in the debt ceiling could occur. This legislation, called Cut, Cap and Balance, would put our country back on a sustainable fiscal path and bring Washington back to reality. The House of Representatives passed Cut, Cap and Balance on July 19th by a vote of 234 to 190.
Here are some of the details of this bill:
CUT- The bill requires $111 billion in spending cuts in the 2012 fiscal year. These cuts would happen now, not years in the future. Now. Additionally, while ensuring that wasteful spending gets weeded out, this legislation makes absolutely no changes or cuts to Social Security, Medicare, veterans, or national defense spending.
CAP- This legislation also caps government spending as a percent of GDP, eventually lowering it to 19.7% in 2018 compared to approximately 25% today. Most importantly, breaking the caps set in place triggers automatic spending cuts. By using spending caps, we would lock in $5.8 trillion in budget savings over the next ten years.
BALANCE- Finally, this legislation grants President Obama's request for an increase in the debt limit, but only after Congress has cut up the credit cards by passing a Balanced Budget Amendment. It would require the passage of a Balanced Budget Amendment to the Constitution before allowing any increase in the nation's debt limit. Basically, the debt limit will only be increased for the short term if a Balanced Budget Amendment gets our fiscal house in order for the long term.
For too long, Congress spent your hard-earned tax dollars without thinking about the consequences. With this legislation, Washington would finally have to do what families and businesses do every day - balance the budget.
Please be assured that I will continue to fight for a stronger America which includes reducing spending and balancing the budget.
Again, thank you for contacting me about this issue. As your Congressman, I value your input and I hope that you will always contact me with your concerns. Hearing your views helps me be sure that I represent you and your family even better while I have the honor of representing you in Congress.
Randy,
I am opposed to your Cut/Cap/Balance bill for the following reasons:
The bill requires a spending cut of $111 billion per year. The government is now overspending by $4 billion per day. That's $1.46 trillion per year. $111 Billion per year is 7.6% of what is needed to create balance. Is this a joke or have I missed something?
The "Cap" portion requires a reduction from 25% to 19.7%, and that only after seven years. This is an absolute reduction of 5.3%. US GDP is $14.7 trillion. 5.3% Of that means a spending cut of $779 billion per year. Since we are overspending by $1.46 trillion per year, we will still be overspending after seven years at the rate of $681 billion per year or almost $2 billion per day. Is this another joke?
The Balanced Budget Amendment sounds good. If I take it at its apparent meaning, it would mean that we would be overspending zero dollars per day. My only hesitation is the meaning of "budget". That term has come to mean a hoped-for situation, which can be easily ignored depending upon apparent circumstances.
-----Original Message-----
Sent: Monday, July 25, 2011 8:51 AM
To: 'Arthur Sucsy'
Subject: RE: No Reason to Raise Federal Debt Limit
Thank you for contacting me regarding the debt ceiling. I share your concerns about the future of our country if Washington fails to make significant spending cuts. We have a government that spends too much, borrows too much, and taxes too much. As your Representative, my top priority in Congress is to rein in spending and clean up this mess before it is too late.
As you know, Washington continues to grapple with the need to raise the debt limit, which currently stands at $14.29 trillion. Earlier this year, the Treasury Department sent a letter to Congress indicating that August 2nd would be the last day the U.S. government would be able to pay all of its bills without an increase in the debt limit. Washington has maxed out its credit card and it is time for serious and significant change.
To shift the direction our country is headed, my colleagues and I have created a responsible plan that would require fundamental change before any increase in the debt ceiling could occur. This legislation, called Cut, Cap and Balance, would put our country back on a sustainable fiscal path and bring Washington back to reality. The House of Representatives passed Cut, Cap and Balance on July 19th by a vote of 234 to 190.
Here are some of the details of this bill:
CUT- The bill requires $111 billion in spending cuts in the 2012 fiscal year. These cuts would happen now, not years in the future. Now. Additionally, while ensuring that wasteful spending gets weeded out, this legislation makes absolutely no changes or cuts to Social Security, Medicare, veterans, or national defense spending.
CAP- This legislation also caps government spending as a percent of GDP, eventually lowering it to 19.7% in 2018 compared to approximately 25% today. Most importantly, breaking the caps set in place triggers automatic spending cuts. By using spending caps, we would lock in $5.8 trillion in budget savings over the next ten years.
BALANCE- Finally, this legislation grants President Obama's request for an increase in the debt limit, but only after Congress has cut up the credit cards by passing a Balanced Budget Amendment. It would require the passage of a Balanced Budget Amendment to the Constitution before allowing any increase in the nation's debt limit. Basically, the debt limit will only be increased for the short term if a Balanced Budget Amendment gets our fiscal house in order for the long term.
For too long, Congress spent your hard-earned tax dollars without thinking about the consequences. With this legislation, Washington would finally have to do what families and businesses do every day - balance the budget.
Please be assured that I will continue to fight for a stronger America which includes reducing spending and balancing the budget.
Again, thank you for contacting me about this issue. As your Congressman, I value your input and I hope that you will always contact me with your concerns. Hearing your views helps me be sure that I represent you and your family even better while I have the honor of representing you in Congress.
Monday, July 25, 2011
Vote against raising the federal debt limit
Copy of a message sent to Rep. Neugebauer:
Saw Obama and Boehner this evening. Obama asked that we the people contact our House Representatives concerning the federal debt limit. I am doing so.
Please vote against raising the federal debt limit. Support Boehner.
Saw Obama and Boehner this evening. Obama asked that we the people contact our House Representatives concerning the federal debt limit. I am doing so.
Please vote against raising the federal debt limit. Support Boehner.
Friday, July 22, 2011
No Reason to Raise Federal Debt Limit
Yahoo Finance says, "5 Consequences if America Doesn’t Raise the Debt Ceiling David Walker, former Comptroller General of the U.S. and [former] head of the Government Accountability Office, says it's imperative both sides of the aisle find a compromise that also sets conditions to lower long-term debt and get back on track. If not, the rest of us will pay.
1. $4 billion-plus a day will come out of the economy.
2. Government and civilian military workers will be laid off temporarily. That will result in penalties for late payment, to be paid by taxpayers.
3. Social security payments will be delayed.
4. No one knows how bad the reaction will be, but Walker is confident it will be negative for the stock and bond markets and the economy.
5. Interest rates will rise. For every 1% rise in interest rates, taxpayers will be on the hook for an additional $150 billion in debt payments.
David Walker has given the above five reasons for raising the federal debt limit. Let's look at each one of these in detail:
1. The government is spending $4 billion per day more than it is taking in. Irrelevant! The $4 billion per day excess spending is being obtained by borrowing. Does it make sense that raising the debt limit has any effect on the $4 billion per day spending? If we are overspending by $4 billion per day, the debt ceiling has nothing to do with it. The only way to obtain balance is to either increase revenue by confiscating $4 billion per day from the public through taxes, or reducing spending by $4 billion per day.
2. Government and civilian military workers will be laid off temporarily, which will result in penalties for late payment. Untrue! If there is late payment of salaries, government only has to pay interest on the delay. This would be no different than paying interest on any bonds sold under increasing the debt limit. In addition, the obvious answer is to not lay off government and civilian military workers temporarily. Lay them off permanently.
3. Social Security payments will be delayed. Not necessarily! They will be delayed only if Pres. Obama and the Sec. of the Treasury decide to delay them. The fact is that there is sufficient revenue to pay Social Security and there is obligation to do so from the Social Security Trust Fund. The Treasury could always find someplace else to delay payments. Pres. Obama has only put out this delay threat as motivation for support of seniors to extend the federal debt limit and give him a deeper pockets for more spending.
4. Walker asserts that not raising the debt limit will have a negative effect on the stock and bond markets, unemployment, and the economy in general. He gives no reason for that conclusion. Alternatively, I can also assert that not raising the debt limit will have a favorable effect on those factors. Is his guess better than mine?
5. If the debt limit is not raised, interest rates will rise. This is a red herring! Walker is likely talking about interest rates on government bond issues. The interest rate on a bond is always related to the bond rating. The rating is a measure of the probability of the bond issuer to pay the stated interest and eventually the principal, when the bond becomes due. The weaker the rating, the higher the interest necessary for the buyer to justify taking increased risk of default on interest and principal.
Moody rates federal government bonds, municipal bonds, corporate bonds, etc. The highest rating is AAA, which also pays the lowest interest. The AAA rating is based on the credit worthiness of the organization. In other words, does the organization have a proper balance of revenues and expenditures. If expenditures exceed revenues, it is apparent that the organization will eventually default on its loans (bonds) and the rating must be decreased with an attendant increase in interest rates.
On that point of an increase in interest rates, Walker is correct. We can expect to see a decrease in US government bond ratings and an attendant increase in interest. However, the key point is that whether there is an increase in the government debt limit or no increase, the fact of credit worthiness remains unchanged. If we continue to spend $4 billion per day more than we take in, Moody will say we will eventually go bust and default on our bonds. Increasing the debt limit will only increase the amount of the default we will later face.
I'm a little surprised that David Walker, who was supposed to be cognizant of financial matters, has come up with these silly reasons to extend the federal limit. If he were presently working for Pres. Obama and Timothy Geithner, I could understand a partial excuse. As it is, I am completely non-plussed.
1. $4 billion-plus a day will come out of the economy.
2. Government and civilian military workers will be laid off temporarily. That will result in penalties for late payment, to be paid by taxpayers.
3. Social security payments will be delayed.
4. No one knows how bad the reaction will be, but Walker is confident it will be negative for the stock and bond markets and the economy.
5. Interest rates will rise. For every 1% rise in interest rates, taxpayers will be on the hook for an additional $150 billion in debt payments.
David Walker has given the above five reasons for raising the federal debt limit. Let's look at each one of these in detail:
1. The government is spending $4 billion per day more than it is taking in. Irrelevant! The $4 billion per day excess spending is being obtained by borrowing. Does it make sense that raising the debt limit has any effect on the $4 billion per day spending? If we are overspending by $4 billion per day, the debt ceiling has nothing to do with it. The only way to obtain balance is to either increase revenue by confiscating $4 billion per day from the public through taxes, or reducing spending by $4 billion per day.
2. Government and civilian military workers will be laid off temporarily, which will result in penalties for late payment. Untrue! If there is late payment of salaries, government only has to pay interest on the delay. This would be no different than paying interest on any bonds sold under increasing the debt limit. In addition, the obvious answer is to not lay off government and civilian military workers temporarily. Lay them off permanently.
3. Social Security payments will be delayed. Not necessarily! They will be delayed only if Pres. Obama and the Sec. of the Treasury decide to delay them. The fact is that there is sufficient revenue to pay Social Security and there is obligation to do so from the Social Security Trust Fund. The Treasury could always find someplace else to delay payments. Pres. Obama has only put out this delay threat as motivation for support of seniors to extend the federal debt limit and give him a deeper pockets for more spending.
4. Walker asserts that not raising the debt limit will have a negative effect on the stock and bond markets, unemployment, and the economy in general. He gives no reason for that conclusion. Alternatively, I can also assert that not raising the debt limit will have a favorable effect on those factors. Is his guess better than mine?
5. If the debt limit is not raised, interest rates will rise. This is a red herring! Walker is likely talking about interest rates on government bond issues. The interest rate on a bond is always related to the bond rating. The rating is a measure of the probability of the bond issuer to pay the stated interest and eventually the principal, when the bond becomes due. The weaker the rating, the higher the interest necessary for the buyer to justify taking increased risk of default on interest and principal.
Moody rates federal government bonds, municipal bonds, corporate bonds, etc. The highest rating is AAA, which also pays the lowest interest. The AAA rating is based on the credit worthiness of the organization. In other words, does the organization have a proper balance of revenues and expenditures. If expenditures exceed revenues, it is apparent that the organization will eventually default on its loans (bonds) and the rating must be decreased with an attendant increase in interest rates.
On that point of an increase in interest rates, Walker is correct. We can expect to see a decrease in US government bond ratings and an attendant increase in interest. However, the key point is that whether there is an increase in the government debt limit or no increase, the fact of credit worthiness remains unchanged. If we continue to spend $4 billion per day more than we take in, Moody will say we will eventually go bust and default on our bonds. Increasing the debt limit will only increase the amount of the default we will later face.
I'm a little surprised that David Walker, who was supposed to be cognizant of financial matters, has come up with these silly reasons to extend the federal limit. If he were presently working for Pres. Obama and Timothy Geithner, I could understand a partial excuse. As it is, I am completely non-plussed.
Thursday, July 14, 2011
Major Projects for Unemployment and the Economy
There are a number of reasons why the US economy is faltering. Among these is unemployment. The more people employed, the greater is the amount of money available for transfer in society. This contributes to Gross National Product, The higher the GNP/person in a society, the better is a person's standard of living.
We mostly lack jobs in this country, not only because many jobs have been shipped overseas for lower labor costs, but also because of continually improved efficiency in supplying manufactured goods and services in the US. The only significant opportunity remaining for considerable employment and an improved economy is a major national project.
Man has traditionally attempted to ameliorate the extremes of nature for his own accommodation. We heat our homes with fuel in the winter and cool them with air conditioning in the summer, We preserve food through canning and freezing during harvest, so that it will be available at a future time. We build roads for ease of transportation. We build dams and reservoirs for power generation and to control flooding.
The last of these major endeavors was construction of the Interstate Highway System. Before that, it was flood control and power generation with the Tennessee Valley Authority (TVA). It is now past time for another big one.
We have recently had heavy floods in the midsection of the country, with resultant considerable damage to private and public property. It is obvious that in spite of previous efforts, our job of flood control is not finished.
In the Southwest, we have had extreme drought bordering on the great Dust Bowl calamity in the 30's.
The commonality of those two conditions is WATER. Water on land comes from rain and snow. Some locations receive too much at one time . Others not enough. Some locations are routinely blessed with periodic precipitation (the NW). Others are routinely arid and borderline deserts the (SW). We do not now have the technology of controlling where precipitation will fall, nor is it apparent that this a possibility for the near future. However, we do have the opportunity to control the final destination of water once it has fallen. In the extreme aspect, that can be considered flood control. In the more moderate aspect, it can be called irrigation.
The Mississippi has more than enough water for local communities, and in times of heavy rainfall or the melting of snow in the northern mountains, flooding occurs with subsequent damage. Here is an opportunity for a project of major proportions. Build dams, reservoirs and lock s to control the Mississippi by equalizing its output to the sea. If there is excess water in total, can we direct some of it to the SW? In so doing, can we construct aqueducts large enough to be used as canals for barge traffic?
What about the possibility of irrigating the SW with deionized sea water? Construct membrane deionization plants in mountains away from high population densities. Use nuclear plants to generate electricity to pump the sea water to the higher elevation and supply pressure for the membrane deionization. The irrigation water could then flow by gravity into the High Plains through canals, dams and locks. Again, we would have the possibility of barge traffic in the canals.
Big project? You bet! Could it be accomplished? You bet! We have the technology in the form of workable nuclear plants and membrane desalination, heavy earth-moving equipment, and plenty of manpower (remember unemployment).
The remaining big question is, "Is it economically feasible?" You bet. It would be primarily land recovery for use to produce agricultural crops. The Europeans can't do it. They have high population densities and little available land. Food in Europe is already expensive compared to the US. We can sell them the food and related raw materials for manufacturing (think cotton). They can do the manufacturing and supply us with finished goods. The same goes for many Asian countries.
How do we start? We get the Wall Street bunch to form a conglomerate. Let's call it "World Food Supply". The conglomerate then arranges a huge bond issue at, say 7% interest, with the first interest payment due in 7 years. From the bond revenue, the conglomerate starts the engineering design to fix the origin of the water source and subsequent related design problems, purchase land, let out contracts for earth moving involving canals, dams, locks, etc.. We want to keep government out of this, because it would be a tremendous project with a long term of completion. Say, 7 years. The presence of government would likely kill it, because of governments' propensity for argumentation and stretching things out time-wise.
Why would people buy the bonds? For the interest. What about an IPO (stock issue)? Sure! Why would anyone buy the stock? For dividends and increase in value as the conglomerate makes profits. How will the conglomerate make profits? Through sale of water to growers in the irrigated region and from toll revenues in canal barge traffic.
Who wants to start it?
We mostly lack jobs in this country, not only because many jobs have been shipped overseas for lower labor costs, but also because of continually improved efficiency in supplying manufactured goods and services in the US. The only significant opportunity remaining for considerable employment and an improved economy is a major national project.
Man has traditionally attempted to ameliorate the extremes of nature for his own accommodation. We heat our homes with fuel in the winter and cool them with air conditioning in the summer, We preserve food through canning and freezing during harvest, so that it will be available at a future time. We build roads for ease of transportation. We build dams and reservoirs for power generation and to control flooding.
The last of these major endeavors was construction of the Interstate Highway System. Before that, it was flood control and power generation with the Tennessee Valley Authority (TVA). It is now past time for another big one.
We have recently had heavy floods in the midsection of the country, with resultant considerable damage to private and public property. It is obvious that in spite of previous efforts, our job of flood control is not finished.
In the Southwest, we have had extreme drought bordering on the great Dust Bowl calamity in the 30's.
The commonality of those two conditions is WATER. Water on land comes from rain and snow. Some locations receive too much at one time . Others not enough. Some locations are routinely blessed with periodic precipitation (the NW). Others are routinely arid and borderline deserts the (SW). We do not now have the technology of controlling where precipitation will fall, nor is it apparent that this a possibility for the near future. However, we do have the opportunity to control the final destination of water once it has fallen. In the extreme aspect, that can be considered flood control. In the more moderate aspect, it can be called irrigation.
The Mississippi has more than enough water for local communities, and in times of heavy rainfall or the melting of snow in the northern mountains, flooding occurs with subsequent damage. Here is an opportunity for a project of major proportions. Build dams, reservoirs and lock s to control the Mississippi by equalizing its output to the sea. If there is excess water in total, can we direct some of it to the SW? In so doing, can we construct aqueducts large enough to be used as canals for barge traffic?
What about the possibility of irrigating the SW with deionized sea water? Construct membrane deionization plants in mountains away from high population densities. Use nuclear plants to generate electricity to pump the sea water to the higher elevation and supply pressure for the membrane deionization. The irrigation water could then flow by gravity into the High Plains through canals, dams and locks. Again, we would have the possibility of barge traffic in the canals.
Big project? You bet! Could it be accomplished? You bet! We have the technology in the form of workable nuclear plants and membrane desalination, heavy earth-moving equipment, and plenty of manpower (remember unemployment).
The remaining big question is, "Is it economically feasible?" You bet. It would be primarily land recovery for use to produce agricultural crops. The Europeans can't do it. They have high population densities and little available land. Food in Europe is already expensive compared to the US. We can sell them the food and related raw materials for manufacturing (think cotton). They can do the manufacturing and supply us with finished goods. The same goes for many Asian countries.
How do we start? We get the Wall Street bunch to form a conglomerate. Let's call it "World Food Supply". The conglomerate then arranges a huge bond issue at, say 7% interest, with the first interest payment due in 7 years. From the bond revenue, the conglomerate starts the engineering design to fix the origin of the water source and subsequent related design problems, purchase land, let out contracts for earth moving involving canals, dams, locks, etc.. We want to keep government out of this, because it would be a tremendous project with a long term of completion. Say, 7 years. The presence of government would likely kill it, because of governments' propensity for argumentation and stretching things out time-wise.
Why would people buy the bonds? For the interest. What about an IPO (stock issue)? Sure! Why would anyone buy the stock? For dividends and increase in value as the conglomerate makes profits. How will the conglomerate make profits? Through sale of water to growers in the irrigated region and from toll revenues in canal barge traffic.
Who wants to start it?
Tuesday, July 12, 2011
Deceptive Hospital Advertising
I saw an advertisement on TV this morning. There was a small group of people apparently addressing Congress.
It was said that Congress was trying to eliminate $100 billion from the budgets of Medicare and Medicaid involving hospitals. The advertisement finished by their asking a direct question to Congress, "What were you thinking?"
I consider this deceptive advertising, because the scenario implied that $100 billion was going to be cut from hospitals, which would effectively have to be closed. That's a ridiculous implication!
Autocratic socialists (read Liberal Democrats) routinely exaggerate a situation to engage fear or unjustifiable support. If there was any talk about $100 billion cut in the health area, it was likely over a ten-year period. Discussion of ten-year cuts don't make sense. We have a problem now! Today!
I don't know how much of any cut in health expenses would involve hospitals, but I personally believe it would be justified. Most people consider hospitals as some kind of public trough, when in fact, hospitals are big business. They exist and expand primarily on the largess of the taxpayers, through government grants. Anyone who has been in the hospital and has received a bill, has likely seen the detail of exorbitant charges, much of which is being absorbed by government through some kind of "special contract".
The fact also is that there are too many hospitals and they are too big. Many of them have unoccupied beds, and presumably unoccupied employees. For example here in Lubbock, with a County population of about 260,000, we have three major hospitals and more than a handful of smaller operating clinics.
Why would Lubbock need three major hospitals? The answer is, "We don't". The only reason we have them is because the public is continually sold a bill of goods by the hospitals and by the federal government, through such advertising as mentioned above. But perhaps of greater significance is the continuing decline of individual responsibility on all matters of lifestyle. Government is now responsible for your education, the safety of your food, providing roads for your travel, providing medical care when you're sick, etc.. With that sort of philosophy now well-ingrained, why shouldn't Lubbock have three major hospitals with a possibility that I, with a dependent philosophy, might say, "Help me go to one of them?
It was said that Congress was trying to eliminate $100 billion from the budgets of Medicare and Medicaid involving hospitals. The advertisement finished by their asking a direct question to Congress, "What were you thinking?"
I consider this deceptive advertising, because the scenario implied that $100 billion was going to be cut from hospitals, which would effectively have to be closed. That's a ridiculous implication!
Autocratic socialists (read Liberal Democrats) routinely exaggerate a situation to engage fear or unjustifiable support. If there was any talk about $100 billion cut in the health area, it was likely over a ten-year period. Discussion of ten-year cuts don't make sense. We have a problem now! Today!
I don't know how much of any cut in health expenses would involve hospitals, but I personally believe it would be justified. Most people consider hospitals as some kind of public trough, when in fact, hospitals are big business. They exist and expand primarily on the largess of the taxpayers, through government grants. Anyone who has been in the hospital and has received a bill, has likely seen the detail of exorbitant charges, much of which is being absorbed by government through some kind of "special contract".
The fact also is that there are too many hospitals and they are too big. Many of them have unoccupied beds, and presumably unoccupied employees. For example here in Lubbock, with a County population of about 260,000, we have three major hospitals and more than a handful of smaller operating clinics.
Why would Lubbock need three major hospitals? The answer is, "We don't". The only reason we have them is because the public is continually sold a bill of goods by the hospitals and by the federal government, through such advertising as mentioned above. But perhaps of greater significance is the continuing decline of individual responsibility on all matters of lifestyle. Government is now responsible for your education, the safety of your food, providing roads for your travel, providing medical care when you're sick, etc.. With that sort of philosophy now well-ingrained, why shouldn't Lubbock have three major hospitals with a possibility that I, with a dependent philosophy, might say, "Help me go to one of them?
Monday, July 11, 2011
Obama and Geithner Misleading the Public on Credit Default
Open letter to Rep. Neugebauer:
Randy,
Your question of the week was, "The debate between the White House and Congressional leadership over the debt ceiling limit continues. Should raising taxes, as the President has asked, be part of the solution to reach an agreement and not let our government default on its credit?".
Once again, your readers were very astute in being able to properly interpret this poorly worded question. 83% said "no".
Under normal conditions it's not possible to default on credit. The first stage is usually default on paying the interest on a loan. Subsequently, the default may be extended into bankruptcy. Private insurance is available for "credit default" on government loans, presumably bonds. The insurance company pays off only if the government goes bankrupt.
In spite of the highly emotional rhetoric of Pres. Obama and Sec. Geithner, I can't find any data which would indicate that not extending the federal debt limit would cause the government to go bankrupt. In fact, the implication from other knowledgeable people is that we can expect to continue paying interest. If the various obligation holders decided to call their loans, the government could go bankrupt, but that is very unlikely to happen. This would be similar to a mortgage company calling for immediate payment of the outstanding principal on a mortgage loan. It just doesn't happen.
The net result is that Pres. Obama and Sec. Geithner have no clue on basic finances, or they are out and out lying, in their claim of government bankruptcy if the debt limit is not raised.
Randy,
Your question of the week was, "The debate between the White House and Congressional leadership over the debt ceiling limit continues. Should raising taxes, as the President has asked, be part of the solution to reach an agreement and not let our government default on its credit?".
Once again, your readers were very astute in being able to properly interpret this poorly worded question. 83% said "no".
Under normal conditions it's not possible to default on credit. The first stage is usually default on paying the interest on a loan. Subsequently, the default may be extended into bankruptcy. Private insurance is available for "credit default" on government loans, presumably bonds. The insurance company pays off only if the government goes bankrupt.
In spite of the highly emotional rhetoric of Pres. Obama and Sec. Geithner, I can't find any data which would indicate that not extending the federal debt limit would cause the government to go bankrupt. In fact, the implication from other knowledgeable people is that we can expect to continue paying interest. If the various obligation holders decided to call their loans, the government could go bankrupt, but that is very unlikely to happen. This would be similar to a mortgage company calling for immediate payment of the outstanding principal on a mortgage loan. It just doesn't happen.
The net result is that Pres. Obama and Sec. Geithner have no clue on basic finances, or they are out and out lying, in their claim of government bankruptcy if the debt limit is not raised.
Tuesday, July 5, 2011
Question of the DOD Budget
Open letter to Rep. Neugebauer:
Randy,
Your question of the week is, "Do you think Defense cuts that do not affect troop readiness should be on the table?.
This is a poorly worded question from two points of view.
In the first place, I don't believe you're really talking about defense cuts. I think you probably mean reducing the budget for the Department of Defense. The Department of Defense is essentially military in two forms; aggression, such as wars in Afghanistan and Libya, and actual defense of the United States, if you mean actions against terrorists in the US and externally, that might be considered defense.
The second item is rather nebulous. What do you mean by troop readiness? Ready to repel a foreign invasion, or ready to jump off to engage in another ridiculous foreign war?
The way you worded the question, there is no "yes" or "no" answer. The proper action to a properly worded question would be to cut military expenditures for anything relating to foreign wars of aggression, including ground troops, To not reduce expenditures on anything concerning actual defense of the US. This would include maintaining highest technology in Star Wars programs and the ability to conduct surgical strikes on terrorist establishments in foreign countries.
Fortunately, 63% of responders were astute enough to be able to properly interpret the reality of the poorly worded question.
Randy,
Your question of the week is, "Do you think Defense cuts that do not affect troop readiness should be on the table?.
This is a poorly worded question from two points of view.
In the first place, I don't believe you're really talking about defense cuts. I think you probably mean reducing the budget for the Department of Defense. The Department of Defense is essentially military in two forms; aggression, such as wars in Afghanistan and Libya, and actual defense of the United States, if you mean actions against terrorists in the US and externally, that might be considered defense.
The second item is rather nebulous. What do you mean by troop readiness? Ready to repel a foreign invasion, or ready to jump off to engage in another ridiculous foreign war?
The way you worded the question, there is no "yes" or "no" answer. The proper action to a properly worded question would be to cut military expenditures for anything relating to foreign wars of aggression, including ground troops, To not reduce expenditures on anything concerning actual defense of the US. This would include maintaining highest technology in Star Wars programs and the ability to conduct surgical strikes on terrorist establishments in foreign countries.
Fortunately, 63% of responders were astute enough to be able to properly interpret the reality of the poorly worded question.
Saturday, July 2, 2011
Oil Company Taxes
There has been considerable discussion concerning tax breaks for oil companies.
While I am absolutely opposed to raising income taxes, as a percentage of income and other various miscellaneous taxes such as Cap and Trade. and sales taxes, I am convinced that people and corporations should be paying reasonable amounts, without benefit of subsidies, loopholes, dishonesty, and generally devious practices.
The discussion of oil company taxes generally involves a 10-year period. I prefer to look at an annual basis, because our national financial difficulties are now, not 10 years into the future.
Let's look at how oil companies calculate certain aspects of their income tax bill to the IRS.
Domestic Production - After normal calculations of profit, 6% of the profit is subtracted as a deduction for domestic production. Oil production is a worldwide enterprise, and it makes little difference to the American public where that oil comes from, providing it is cheap and consistent in supply. No other industry that I know of, including textiles and various other manufacturing enterprises, have a domestic subsidy production. There is no reason for oil to be an exception. Eliminate the subsidy, which is estimated at $1.2 billion per year.
Foreign Taxes - Individuals and corporations generally are allowed to exclude their payments of foreign taxes when calculating US income tax. This seems reasonable, because individuals and companies should not be penalized for doing business overseas. Oil companies pay about $0.5 billion per year in foreign taxes and this allowance on US income taxes should be continued. There is some complaint that oil companies have in some cases disguised royalty payments as foreign taxes, but to me, it makes no difference. A royalty payment or foreign tax payment to a foreign country is one and the same. It is a cost of doing business.
Drilling Research and Development - Oil companies spend $0.2 billion per year on certain drilling development expenses, which some claim should not be allowed as a deduction in calculating income taxes. However, this is research intended to keep the company competitive by developing new products and techniques. Without such research and development, it is unlikely that BP would have discovered the oil gusher in deep water drilling in the Gulf of Mexico. R&D expense must be continued as a deduction in calculating corporate income tax.
Depletion Allowance - The theory of the oil depletion allowance is that at the time of its inception, there was a finite amount of oil to be discovered in the US and the world. When that supply was exhausted, the oil companies would be out of business. The depletion allowance was an attempt to allow the oil companies to retain a sufficient amount of cash that they could then operate in other areas of energy supply once oil was no longer available. This has basically been found to be a weak or almost false assumption. The fact is that the more oil removed from the "finite" supply, the more seems to be available through new exploration and drilling techniques. The depletion allowance to US oil companies amounts to about $1 billion per year. This deduction in calculating income tax should be eliminated.
While I am absolutely opposed to raising income taxes, as a percentage of income and other various miscellaneous taxes such as Cap and Trade. and sales taxes, I am convinced that people and corporations should be paying reasonable amounts, without benefit of subsidies, loopholes, dishonesty, and generally devious practices.
The discussion of oil company taxes generally involves a 10-year period. I prefer to look at an annual basis, because our national financial difficulties are now, not 10 years into the future.
Let's look at how oil companies calculate certain aspects of their income tax bill to the IRS.
Domestic Production - After normal calculations of profit, 6% of the profit is subtracted as a deduction for domestic production. Oil production is a worldwide enterprise, and it makes little difference to the American public where that oil comes from, providing it is cheap and consistent in supply. No other industry that I know of, including textiles and various other manufacturing enterprises, have a domestic subsidy production. There is no reason for oil to be an exception. Eliminate the subsidy, which is estimated at $1.2 billion per year.
Foreign Taxes - Individuals and corporations generally are allowed to exclude their payments of foreign taxes when calculating US income tax. This seems reasonable, because individuals and companies should not be penalized for doing business overseas. Oil companies pay about $0.5 billion per year in foreign taxes and this allowance on US income taxes should be continued. There is some complaint that oil companies have in some cases disguised royalty payments as foreign taxes, but to me, it makes no difference. A royalty payment or foreign tax payment to a foreign country is one and the same. It is a cost of doing business.
Drilling Research and Development - Oil companies spend $0.2 billion per year on certain drilling development expenses, which some claim should not be allowed as a deduction in calculating income taxes. However, this is research intended to keep the company competitive by developing new products and techniques. Without such research and development, it is unlikely that BP would have discovered the oil gusher in deep water drilling in the Gulf of Mexico. R&D expense must be continued as a deduction in calculating corporate income tax.
Depletion Allowance - The theory of the oil depletion allowance is that at the time of its inception, there was a finite amount of oil to be discovered in the US and the world. When that supply was exhausted, the oil companies would be out of business. The depletion allowance was an attempt to allow the oil companies to retain a sufficient amount of cash that they could then operate in other areas of energy supply once oil was no longer available. This has basically been found to be a weak or almost false assumption. The fact is that the more oil removed from the "finite" supply, the more seems to be available through new exploration and drilling techniques. The depletion allowance to US oil companies amounts to about $1 billion per year. This deduction in calculating income tax should be eliminated.
Friday, July 1, 2011
Is Iran a Dependable Oil Supplier?
EIN News says, "Iran Says Could Halt Oil Supplies to India in August Iran has threatened to halt oil supplies to India in August as it presses New Delhi to solve a payments dispute that has cast a shadow since December over the two countries' $12 billion annual crude trade. (reuters.com)".
I'm not a big supporter of Iran and from personal experience I have generally found them to be dishonest. However, I am a believer in the rights of private property. If there was a deal whereby India was to buy oil and actually received it and then subsequently welched on payment, Iran has every right to withhold further shipments.
But there may be more than meets the eye. On April 13 (two a half months ago), Iran said that presumably the same dispute had been resolved (http://www.presstv.ir/detail/174553.html). In that description a matter of bank payments and calculations was the subject of controversy. Since the Iranians can be pretty tricky on these matters, it is a matter of conjecture as to whether the Iranians or the Indians are in the right.
The best resolution might be for the Indians to pay what they think is appropriate according to their calculations and find a new supplier for future shipments. It is likely that if they continue to do business with the Iranians, they will continue to have these problems.
I'm not a big supporter of Iran and from personal experience I have generally found them to be dishonest. However, I am a believer in the rights of private property. If there was a deal whereby India was to buy oil and actually received it and then subsequently welched on payment, Iran has every right to withhold further shipments.
But there may be more than meets the eye. On April 13 (two a half months ago), Iran said that presumably the same dispute had been resolved (http://www.presstv.ir/detail/174553.html). In that description a matter of bank payments and calculations was the subject of controversy. Since the Iranians can be pretty tricky on these matters, it is a matter of conjecture as to whether the Iranians or the Indians are in the right.
The best resolution might be for the Indians to pay what they think is appropriate according to their calculations and find a new supplier for future shipments. It is likely that if they continue to do business with the Iranians, they will continue to have these problems.
Thursday, June 30, 2011
Open Letter to Speaker Boehner
Speaker Boehner,
I have read your latest newsletter.
You said, "We have an extraordinary opportunity to do something big for our economy." ABSOLUTELY CORRECT! Congress has been rubber stamping the Administration for years. which is why we now find ourselves in a dire predicament. It is past time to stand up and do the right thing for our country, but still not too late.
You also said, "There will be no debt limit increase unless it includes spending cuts that are larger than the debt limit increase; includes reforms to hold down spending in the future; and is free from tax hikes." Sounds good, like a typical Obama statement, but lacks specificity, which is an indication of lack of resolve. Forget the "unless". Live within your means, which in this case is the present debt limit. Since the government has presumably reached its previously established debt limit, which has also been increased several times to arrive at this level, now is the time to stop.
Don't borrow any more money. Establish a real payment schedule, which will match expected revenue. Note that I did not say "budget", which has become a word meaning "hope". A real payment schedule will force some real expense cuts. The big opportunities are cutting social programs, such as Welfare, Medicare, and Social Security, but you likely will not want to start there, because of expected voter antagonism. Hit the next obvious ones, which are the various government agencies. The voting public generally either looks negatively at these agencies or is neutral. Cuts there will also have the positive effect of decreasing regulatory inhibitions for business and thus promote jobs. Remember that Congress set up these agencies, and funded them. Congress can now stop funding and take them down. Start with the Dept. of Energy, and move into the National Science Foundation, the EPA, etc.
Finally, ABSOLUTELY NO FEDERAL INCOME TAX INCREASE FOR ANYBODY. The Democrats have been playing the jealousy card, by referring to corporate jets and tax breaks for oil companies. Kill the tax breaks and all subsidies. That will make a favorable impression on the voting public and reduce government expense. The present subsidy receivers will be unhappy and cut donations to your campaign fund, but voters will be more favorably impressed, as you use the Democrat tactic of appealing to their jealousy streak. This will be much more effective than any favorable effect you could get from mealy-mouthed advertisements supporting subsidies.
You also need a better communication source to the general public. Something like an NPR or better yet a TV station. Something which the House controls as opposed to a federal Agency. You then use that outlet to convince the American public that it is people who control wealth who make jobs, not government, unions, or the workers. Somebody has to put money into equipment purchase, etc..
If you find such a direct government outlet too crass, how about endorsing some already available programs, such as Fox News, Huckabee, or the Trump program? You need a promotion program to convince the voting public to buy your stuff with their votes. If you don't feel competent in this area, hire one or two good consultants from the advertising industry.
I have read your latest newsletter.
You said, "We have an extraordinary opportunity to do something big for our economy." ABSOLUTELY CORRECT! Congress has been rubber stamping the Administration for years. which is why we now find ourselves in a dire predicament. It is past time to stand up and do the right thing for our country, but still not too late.
You also said, "There will be no debt limit increase unless it includes spending cuts that are larger than the debt limit increase; includes reforms to hold down spending in the future; and is free from tax hikes." Sounds good, like a typical Obama statement, but lacks specificity, which is an indication of lack of resolve. Forget the "unless". Live within your means, which in this case is the present debt limit. Since the government has presumably reached its previously established debt limit, which has also been increased several times to arrive at this level, now is the time to stop.
Don't borrow any more money. Establish a real payment schedule, which will match expected revenue. Note that I did not say "budget", which has become a word meaning "hope". A real payment schedule will force some real expense cuts. The big opportunities are cutting social programs, such as Welfare, Medicare, and Social Security, but you likely will not want to start there, because of expected voter antagonism. Hit the next obvious ones, which are the various government agencies. The voting public generally either looks negatively at these agencies or is neutral. Cuts there will also have the positive effect of decreasing regulatory inhibitions for business and thus promote jobs. Remember that Congress set up these agencies, and funded them. Congress can now stop funding and take them down. Start with the Dept. of Energy, and move into the National Science Foundation, the EPA, etc.
Finally, ABSOLUTELY NO FEDERAL INCOME TAX INCREASE FOR ANYBODY. The Democrats have been playing the jealousy card, by referring to corporate jets and tax breaks for oil companies. Kill the tax breaks and all subsidies. That will make a favorable impression on the voting public and reduce government expense. The present subsidy receivers will be unhappy and cut donations to your campaign fund, but voters will be more favorably impressed, as you use the Democrat tactic of appealing to their jealousy streak. This will be much more effective than any favorable effect you could get from mealy-mouthed advertisements supporting subsidies.
You also need a better communication source to the general public. Something like an NPR or better yet a TV station. Something which the House controls as opposed to a federal Agency. You then use that outlet to convince the American public that it is people who control wealth who make jobs, not government, unions, or the workers. Somebody has to put money into equipment purchase, etc..
If you find such a direct government outlet too crass, how about endorsing some already available programs, such as Fox News, Huckabee, or the Trump program? You need a promotion program to convince the voting public to buy your stuff with their votes. If you don't feel competent in this area, hire one or two good consultants from the advertising industry.
Tuesday, June 21, 2011
US Jobs
Unemployment in the US is now 9.1%. Most everyone considers this high rate unacceptable, and the News is constantly entertaining persons who lament the high unemployment rate. In a few cases suggestions are made on how to decrease it.
I thought we might want to look at unemployment from a limited historical perspective and also some associated conditions involving standard of living. The 1960's started a distrust of government, similar to what we have today, but there seemed to be no significant economic concerns and jobs did seem to be a major consideration. For those reasons and also because it is a nice, even 50 years of time span, I have chosen data from 1961 for an analogy in several areas, but have eliminated farm employment, because of the lack of good data, the varying nature of migrant farm workers and the probability that ignoring it does not make a significant difference in our conclusions. The significant complete data are attached, but I will use portions in this text.
WORKING PEOPLE
Rather than handle "unemployment", I prefer to concentrate on the positive aspects, and I call it "Working People" or "Employment"
In 1961, there were 54.1 million working people (employed), and the total population was 183.7 million people. Therefore, the percentage employed was 29.5%. Those who were not employed included children, retirees, handicapped people, those who could not find work, and those who did not care to work.
In 2011, there are 139.9 million employed and the total population is 311.6 million people. Therefore, the percentage employed is 44.9%. Looks like a higher percentage of people working in 2011 compared to 1961. Am I missing something?
GROSS DOMESTIC PRODUCT (GDP)
GDP is the total value of goods produced and services provided in a country during one year. In other words, it's the total dollar economy, of which everyone gets a piece, even if unequally. Since the 1961 GDP was measured in 1961 dollars, it is necessary to adjust the 1961 GDP to bring it up to present dollar value. The present $1.00 was worth $ 7.14 in 1961.
In 1961, the GDP was $3,891,400 million, and the total population was 183.7 million people. This gave $21,180 per person.
In 2011, the GDP is $14,870,900 million, and the total population is 311.6 million people. This gives $47,700 per person. Unless I'm missing something, that's more than twice what it was in 1961, Surprised? Some may say. "Well, I don't see it". Look more closely. We now have more cars per family, larger and more expensive homes, prevalent air conditioning, more eating in restaurants, more exotic foods, more expensive vacations, nails and hair done once a week, etc. That doesn't sound like suffering. With a greater percentage of the population in the work force, each family has more wage earners, with higher total income.
DISTRIBUTION OF WORK FORCE
Private vs. Government - The work force consists of those who work in the Private sector and those who work for Government. The Private Sector is considerably larger than the Government Sector.
Private - In 1961, 45.4 million people were employed in the Private Sector. That was 83.9% of the work force.
In 2011, 107.3 million people work in the Private Sector. That is 76.6% of the work force. Not a big drop.
Government - In 1961, 8.7 million people worked for government. That was 16.1% of the work force.
In 2011, 22.5 million work for the government. That is 17.3% of the work force. Not a large increase, but enough to attract the attention of those who say government jobs give the economy a double negative effect. They not only take productive jobs from the Private Sector and turn them into non-productive jobs, but also have a negative effect on private industry by imposing various restrictions.
Goods Producing vs. Service - Goods Producing jobs include mining, construction and manufacturing. Service jobs are everything else. Examples of Service employees are school teachers, auto repair mechanics, barbers & hair dressers, lawyers, physicians, etc.
Goods Producing - In 1961, there were 18.6 million persons in Goods Producing jobs. That was 34.4% of the work force.
In 2011, there are 17.8 million persons in Goods Producing jobs. That is 13.7% of the work force, or a drop of 60.2%.
Service - In 1961, there were 35.5 million people in Service jobs. That was 65.6% of the work force.
In 2011, there are 112.1 million people in Service jobs. . That is 86.4% of the work force, or an increase of 31.7%.
ANALYSIS
We have shown that there is now a significantly higher percentage of the population in the work force than there was in 1961. We have shown that the GDP per person has doubled since 1961. Why then do we have the feeling of unrest?
The answer lies in perception and concern.
Note the huge increase in service jobs since 1961. All of these jobs involve a transfer of internal wealth for services which people in 1961 tended to do more themselves. For example, a barber now has what seems to be a cold. Instead of taking two aspirin, he goes to the doctor. The doctor uses that money to take his family to the cinema. The money you pay for a haircut goes to cinema tickets, and it doesn't stop there. It goes round and around, with each pass adding to the GDP. In some ways the GDP is then fictitious, but your haircut was performed by another person.. That was done more efficiently than you could do it yourself and you have more free time for reading, TV, etc.
Note the huge decrease in manufacturing employment. This can come about through several mechanisms. Mining, construction and manufacturing could have become more efficient, so that the same quantity of goods is produced with fewer people. Or, there could be less production of goods. In fact, both have occurred, but since there is no shortage of goods on the market, the shortfall of local production is made up by imports. There are many jokes about "Made in Japan", China, Barbados, etc. Nice deal that we have somebody else doing the work to produce our goods. All we have to do is pay for it, while we spend more time attending sporting events.
That is where the rub comes in. Only Goods Producing Jobs inject new wealth into the system.. Service Jobs only involve a transfer of wealth within the system. If we limit the "system" to the US, transfer of Goods Producing Jobs to foreign countries not only reduces our ability to inject new wealth, it also creates debt. After all, the foreign Goods Producers must be paid for their production, or they will not be increasing their local wealth.
This creates debt in the US. Not only government debt, but TOTAL debt.
The US public has begun to realize it has been living high on the hog at someone else's apparent expense, and the time will come when the piper must be paid. But, realization and acceptance of responsibility to take corrective action are two different matters. The public is not yet ready to accept responsibility. It is at the stage where it puts the blame on someone or something else. In this case, Government. Such blame is not completely misplaced. Government employment has grown and as mentioned previously, it has had a significant role in reducing US Goods Producing Jobs. While there is public unrest, the fact is that we have a high percentage of the population as a Work Force, and we have a high standard of living, even if it is based on a house of cards.
Pogo was right, when he said, "We have met the enemy and they are us".
I thought we might want to look at unemployment from a limited historical perspective and also some associated conditions involving standard of living. The 1960's started a distrust of government, similar to what we have today, but there seemed to be no significant economic concerns and jobs did seem to be a major consideration. For those reasons and also because it is a nice, even 50 years of time span, I have chosen data from 1961 for an analogy in several areas, but have eliminated farm employment, because of the lack of good data, the varying nature of migrant farm workers and the probability that ignoring it does not make a significant difference in our conclusions. The significant complete data are attached, but I will use portions in this text.
WORKING PEOPLE
Rather than handle "unemployment", I prefer to concentrate on the positive aspects, and I call it "Working People" or "Employment"
In 1961, there were 54.1 million working people (employed), and the total population was 183.7 million people. Therefore, the percentage employed was 29.5%. Those who were not employed included children, retirees, handicapped people, those who could not find work, and those who did not care to work.
In 2011, there are 139.9 million employed and the total population is 311.6 million people. Therefore, the percentage employed is 44.9%. Looks like a higher percentage of people working in 2011 compared to 1961. Am I missing something?
GROSS DOMESTIC PRODUCT (GDP)
GDP is the total value of goods produced and services provided in a country during one year. In other words, it's the total dollar economy, of which everyone gets a piece, even if unequally. Since the 1961 GDP was measured in 1961 dollars, it is necessary to adjust the 1961 GDP to bring it up to present dollar value. The present $1.00 was worth $ 7.14 in 1961.
In 1961, the GDP was $3,891,400 million, and the total population was 183.7 million people. This gave $21,180 per person.
In 2011, the GDP is $14,870,900 million, and the total population is 311.6 million people. This gives $47,700 per person. Unless I'm missing something, that's more than twice what it was in 1961, Surprised? Some may say. "Well, I don't see it". Look more closely. We now have more cars per family, larger and more expensive homes, prevalent air conditioning, more eating in restaurants, more exotic foods, more expensive vacations, nails and hair done once a week, etc. That doesn't sound like suffering. With a greater percentage of the population in the work force, each family has more wage earners, with higher total income.
DISTRIBUTION OF WORK FORCE
Private vs. Government - The work force consists of those who work in the Private sector and those who work for Government. The Private Sector is considerably larger than the Government Sector.
Private - In 1961, 45.4 million people were employed in the Private Sector. That was 83.9% of the work force.
In 2011, 107.3 million people work in the Private Sector. That is 76.6% of the work force. Not a big drop.
Government - In 1961, 8.7 million people worked for government. That was 16.1% of the work force.
In 2011, 22.5 million work for the government. That is 17.3% of the work force. Not a large increase, but enough to attract the attention of those who say government jobs give the economy a double negative effect. They not only take productive jobs from the Private Sector and turn them into non-productive jobs, but also have a negative effect on private industry by imposing various restrictions.
Goods Producing vs. Service - Goods Producing jobs include mining, construction and manufacturing. Service jobs are everything else. Examples of Service employees are school teachers, auto repair mechanics, barbers & hair dressers, lawyers, physicians, etc.
Goods Producing - In 1961, there were 18.6 million persons in Goods Producing jobs. That was 34.4% of the work force.
In 2011, there are 17.8 million persons in Goods Producing jobs. That is 13.7% of the work force, or a drop of 60.2%.
Service - In 1961, there were 35.5 million people in Service jobs. That was 65.6% of the work force.
In 2011, there are 112.1 million people in Service jobs. . That is 86.4% of the work force, or an increase of 31.7%.
ANALYSIS
We have shown that there is now a significantly higher percentage of the population in the work force than there was in 1961. We have shown that the GDP per person has doubled since 1961. Why then do we have the feeling of unrest?
The answer lies in perception and concern.
Note the huge increase in service jobs since 1961. All of these jobs involve a transfer of internal wealth for services which people in 1961 tended to do more themselves. For example, a barber now has what seems to be a cold. Instead of taking two aspirin, he goes to the doctor. The doctor uses that money to take his family to the cinema. The money you pay for a haircut goes to cinema tickets, and it doesn't stop there. It goes round and around, with each pass adding to the GDP. In some ways the GDP is then fictitious, but your haircut was performed by another person.. That was done more efficiently than you could do it yourself and you have more free time for reading, TV, etc.
Note the huge decrease in manufacturing employment. This can come about through several mechanisms. Mining, construction and manufacturing could have become more efficient, so that the same quantity of goods is produced with fewer people. Or, there could be less production of goods. In fact, both have occurred, but since there is no shortage of goods on the market, the shortfall of local production is made up by imports. There are many jokes about "Made in Japan", China, Barbados, etc. Nice deal that we have somebody else doing the work to produce our goods. All we have to do is pay for it, while we spend more time attending sporting events.
That is where the rub comes in. Only Goods Producing Jobs inject new wealth into the system.. Service Jobs only involve a transfer of wealth within the system. If we limit the "system" to the US, transfer of Goods Producing Jobs to foreign countries not only reduces our ability to inject new wealth, it also creates debt. After all, the foreign Goods Producers must be paid for their production, or they will not be increasing their local wealth.
This creates debt in the US. Not only government debt, but TOTAL debt.
The US public has begun to realize it has been living high on the hog at someone else's apparent expense, and the time will come when the piper must be paid. But, realization and acceptance of responsibility to take corrective action are two different matters. The public is not yet ready to accept responsibility. It is at the stage where it puts the blame on someone or something else. In this case, Government. Such blame is not completely misplaced. Government employment has grown and as mentioned previously, it has had a significant role in reducing US Goods Producing Jobs. While there is public unrest, the fact is that we have a high percentage of the population as a Work Force, and we have a high standard of living, even if it is based on a house of cards.
Pogo was right, when he said, "We have met the enemy and they are us".
US Jobs
Unemployment in the US is now 9.1%. Most everyone considers this high rate unacceptable, and the News is constantly entertaining persons who lament the high unemployment rate. In a few cases suggestions are made on how to decrease it.
I thought we might want to look at unemployment from a limited historical perspective and also some associated conditions involving standard of living. The 1960's started a distrust of government, similar to what we have today, but there seemed to be no significant economic concerns and jobs did seem to be a major consideration. For those reasons and also because it is a nice, even 50 years of time span, I have chosen data from 1961 for an analogy in several areas, but have eliminated farm employment, because of the lack of good data, the varying nature of migrant farm workers and the probability that ignoring it does not make a significant difference in our conclusions. The significant complete data are attached, but I will use portions in this text.
WORKING PEOPLE
Rather than handle "unemployment", I prefer to concentrate on the positive aspects, and I call it "Working People" or "Employment"
In 1961, there were 54.1 million working people (employed), and the total population was 183.7 million people. Therefore, the percentage employed was 29.5%. Those who were not employed included children, retirees, handicapped people, those who could not find work, and those who did not care to work.
In 2011, there are 139.9 million employed and the total population is 311.6 million people. Therefore, the percentage employed is 44.9%. Looks like a higher percentage of people working in 2011 compared to 1961. Am I missing something?
GROSS DOMESTIC PRODUCT (GDP)
GDP is the total value of goods produced and services provided in a country during one year. In other words, it's the total dollar economy, of which everyone gets a piece, even if unequally. Since the 1961 GDP was measured in 1961 dollars, it is necessary to adjust the 1961 GDP to bring it up to present dollar value. The present $1.00 was worth $ 7.14 in 1961.
In 1961, the GDP was $3,891,400 million, and the total population was 183.7 million people. This gave $21,180 per person.
In 2011, the GDP is $14,870,900 million, and the total population is 311.6 million people. This gives $47,700 per person. Unless I'm missing something, that's more than twice what it was in 1961, Surprised? Some may say. "Well, I don't see it". Look more closely. We now have more cars per family, larger and more expensive homes, prevalent air conditioning, more eating in restaurants, more exotic foods, more expensive vacations, nails and hair done once a week, etc. That doesn't sound like suffering. With a greater percentage of the population in the work force, each family has more wage earners, with higher total income.
DISTRIBUTION OF WORK FORCE
Private vs. Government - The work force consists of those who work in the Private sector and those who work for Government. The Private Sector is considerably larger than the Government Sector.
Private - In 1961, 45.4 million people were employed in the Private Sector. That was 83.9% of the work force.
In 2011, 107.3 million people work in the Private Sector. That is 76.6% of the work force. Not a big drop.
Government - In 1961, 8.7 million people worked for government. That was 16.1% of the work force.
In 2011, 22.5 million work for the government. That is 17.3% of the work force. Not a large increase, but enough to attract the attention of those who say government jobs give the economy a double negative effect. They not only take productive jobs from the Private Sector and turn them into non-productive jobs, but also have a negative effect on private industry by imposing various restrictions.
Goods Producing vs. Service - Goods Producing jobs include mining, construction and manufacturing. Service jobs are everything else.
Examples of Service employees are school teachers, auto repair mechanics, barbers & hair dressers, lawyers, physicians, etc.
Goods Producing - In 1961, there were 18.6 million persons in Goods Producing jobs. That was 34.4% of the work force.
In 2011, there are 17.8 million persons in Goods Producing jobs. That is 13.7% of the work force, or a drop of 60.2%.
Service - In 1961, there were 35.5 million people in Service jobs. That was 65.6% of the work force.
In 2011, there are 112.1 million people in Service jobs. . That is 86.4% of the work force, or an increase of 31.7%.
ANALYSIS
We have shown that there is now a significantly higher percentage of the population in the work force than there was in 1961. We have shown that the GDP per person has doubled since 1961. Why then do we have the feeling of unrest?
The answer lies in perception and concern.
Note the huge increase in service jobs since 1961. All of these jobs involve a transfer of internal wealth for services which people in 1961 tended to do more themselves. For example, a barber now has what seems to be a cold. Instead of taking two aspirin, he goes to the doctor. The doctor uses that money to take his family to the cinema. The money you pay for a haircut goes to cinema tickets, and it doesn't stop there. It goes round and around, with each pass adding to the GDP. In some ways the GDP is then fictitious, but your haircut was performed by another person.. That was done more efficiently than you could do it yourself and you have more free time for reading, TV, etc.
Note the huge decrease in manufacturing employment. This can come about through several mechanisms. Mining, construction and manufacturing could have become more efficient, so that the same quantity of goods is produced with fewer people. Or, there could be less production of goods. In fact, both have occurred, but since there is no shortage of goods on the market, the shortfall of local production is made up by imports. There are many jokes about "Made in Japan", China, Barbados, etc. Nice deal that we have somebody else doing the work to produce our goods. All we have to do is pay for it, while we spend more time attending sporting events.
That is where the rub comes in. Only Goods Producing Jobs inject new wealth into the system.. Service Jobs only involve a transfer of wealth within the system. If we limit the "system" to the US, transfer of Goods Producing Jobs to foreign countries not only reduces our ability to inject new wealth, it also creates debt. After all, the foreign Goods Producers must be paid for their production, or they will not be increasing their local wealth.
This creates debt in the US. Not only government debt, but TOTAL debt.
The US public has begun to realize it has been living high on the hog at someone else's apparent expense, and the time will come when the piper must be paid. But, realization and acceptance of responsibility to take corrective action are two different matters. The public is not yet ready to accept responsibility. It is at the stage where it puts the blame on someone or something else. In this case, Government. Such blame is not completely misplaced. Government employment has grown and as mentioned previously, it has had a significant role in reducing US Goods Producing Jobs. While there is public unrest, the fact is that we have a high percentage of the population as a Work Force, and we have a high standard of living, even if it is based on a house of cards.
Pogo was right, when he said, "We have met the enemy and they are us".
I thought we might want to look at unemployment from a limited historical perspective and also some associated conditions involving standard of living. The 1960's started a distrust of government, similar to what we have today, but there seemed to be no significant economic concerns and jobs did seem to be a major consideration. For those reasons and also because it is a nice, even 50 years of time span, I have chosen data from 1961 for an analogy in several areas, but have eliminated farm employment, because of the lack of good data, the varying nature of migrant farm workers and the probability that ignoring it does not make a significant difference in our conclusions. The significant complete data are attached, but I will use portions in this text.
WORKING PEOPLE
Rather than handle "unemployment", I prefer to concentrate on the positive aspects, and I call it "Working People" or "Employment"
In 1961, there were 54.1 million working people (employed), and the total population was 183.7 million people. Therefore, the percentage employed was 29.5%. Those who were not employed included children, retirees, handicapped people, those who could not find work, and those who did not care to work.
In 2011, there are 139.9 million employed and the total population is 311.6 million people. Therefore, the percentage employed is 44.9%. Looks like a higher percentage of people working in 2011 compared to 1961. Am I missing something?
GROSS DOMESTIC PRODUCT (GDP)
GDP is the total value of goods produced and services provided in a country during one year. In other words, it's the total dollar economy, of which everyone gets a piece, even if unequally. Since the 1961 GDP was measured in 1961 dollars, it is necessary to adjust the 1961 GDP to bring it up to present dollar value. The present $1.00 was worth $ 7.14 in 1961.
In 1961, the GDP was $3,891,400 million, and the total population was 183.7 million people. This gave $21,180 per person.
In 2011, the GDP is $14,870,900 million, and the total population is 311.6 million people. This gives $47,700 per person. Unless I'm missing something, that's more than twice what it was in 1961, Surprised? Some may say. "Well, I don't see it". Look more closely. We now have more cars per family, larger and more expensive homes, prevalent air conditioning, more eating in restaurants, more exotic foods, more expensive vacations, nails and hair done once a week, etc. That doesn't sound like suffering. With a greater percentage of the population in the work force, each family has more wage earners, with higher total income.
DISTRIBUTION OF WORK FORCE
Private vs. Government - The work force consists of those who work in the Private sector and those who work for Government. The Private Sector is considerably larger than the Government Sector.
Private - In 1961, 45.4 million people were employed in the Private Sector. That was 83.9% of the work force.
In 2011, 107.3 million people work in the Private Sector. That is 76.6% of the work force. Not a big drop.
Government - In 1961, 8.7 million people worked for government. That was 16.1% of the work force.
In 2011, 22.5 million work for the government. That is 17.3% of the work force. Not a large increase, but enough to attract the attention of those who say government jobs give the economy a double negative effect. They not only take productive jobs from the Private Sector and turn them into non-productive jobs, but also have a negative effect on private industry by imposing various restrictions.
Goods Producing vs. Service - Goods Producing jobs include mining, construction and manufacturing. Service jobs are everything else.
Examples of Service employees are school teachers, auto repair mechanics, barbers & hair dressers, lawyers, physicians, etc.
Goods Producing - In 1961, there were 18.6 million persons in Goods Producing jobs. That was 34.4% of the work force.
In 2011, there are 17.8 million persons in Goods Producing jobs. That is 13.7% of the work force, or a drop of 60.2%.
Service - In 1961, there were 35.5 million people in Service jobs. That was 65.6% of the work force.
In 2011, there are 112.1 million people in Service jobs. . That is 86.4% of the work force, or an increase of 31.7%.
ANALYSIS
We have shown that there is now a significantly higher percentage of the population in the work force than there was in 1961. We have shown that the GDP per person has doubled since 1961. Why then do we have the feeling of unrest?
The answer lies in perception and concern.
Note the huge increase in service jobs since 1961. All of these jobs involve a transfer of internal wealth for services which people in 1961 tended to do more themselves. For example, a barber now has what seems to be a cold. Instead of taking two aspirin, he goes to the doctor. The doctor uses that money to take his family to the cinema. The money you pay for a haircut goes to cinema tickets, and it doesn't stop there. It goes round and around, with each pass adding to the GDP. In some ways the GDP is then fictitious, but your haircut was performed by another person.. That was done more efficiently than you could do it yourself and you have more free time for reading, TV, etc.
Note the huge decrease in manufacturing employment. This can come about through several mechanisms. Mining, construction and manufacturing could have become more efficient, so that the same quantity of goods is produced with fewer people. Or, there could be less production of goods. In fact, both have occurred, but since there is no shortage of goods on the market, the shortfall of local production is made up by imports. There are many jokes about "Made in Japan", China, Barbados, etc. Nice deal that we have somebody else doing the work to produce our goods. All we have to do is pay for it, while we spend more time attending sporting events.
That is where the rub comes in. Only Goods Producing Jobs inject new wealth into the system.. Service Jobs only involve a transfer of wealth within the system. If we limit the "system" to the US, transfer of Goods Producing Jobs to foreign countries not only reduces our ability to inject new wealth, it also creates debt. After all, the foreign Goods Producers must be paid for their production, or they will not be increasing their local wealth.
This creates debt in the US. Not only government debt, but TOTAL debt.
The US public has begun to realize it has been living high on the hog at someone else's apparent expense, and the time will come when the piper must be paid. But, realization and acceptance of responsibility to take corrective action are two different matters. The public is not yet ready to accept responsibility. It is at the stage where it puts the blame on someone or something else. In this case, Government. Such blame is not completely misplaced. Government employment has grown and as mentioned previously, it has had a significant role in reducing US Goods Producing Jobs. While there is public unrest, the fact is that we have a high percentage of the population as a Work Force, and we have a high standard of living, even if it is based on a house of cards.
Pogo was right, when he said, "We have met the enemy and they are us".
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