There seems to be some confusion in the public mind concerning why a company or corporation exists. Examples of companies or corporations are United Supermarkets, Bain Capital, General Electric, and Exxon Mobil.
The reason for their existence is very simple. They exist only to make a profit, or some say, "make money".
In order to make a profit, they need to supply a desired product or service or both to consumers. Consumers may be the general public, as for example customers for automobiles, or a consumer may be another company needing a software program for their computer operations.
In order to supply a product or service, a company always needs people to operate the supply system. In other words it makes jobs, but those jobs only continue to exist as long as the company continues to make a profit. The balance lies primarily in the effectiveness of the employees. They must make a product or service of customer-desired type and quality and do so at a cost which is as good as or better than the same functions performed by their competitors. The sales organization must bring to a customer's attention the merits of the product, so that the customer will buy and contribute revenue.
Without a high level of revenue and low costs, profit ceases to exist and the company disappears. With the disappearance of a company, jobs are lost.
Note again that the only reason for the company to exist is to make a profit. It is not there to supply products or services to customers, not there to make jobs, not there to pay taxes, not there to create environmental problems and not there to justify government regulations. All of these are ancillary to the company's objective, which is always to make a profit. Without a profit and the disappearance of the company, products and services cease to be generated and available to the public, unemployment develops, there are no taxes, and there's nothing to regulate.
What about the public good? Don't companies have a responsibility to the general public? The answer is an emphatic "No". There are other mechanisms and procedures, which handle the needs of our society.
When a company makes money, the owners of the company and the employees also make money. Each of these uses that money at his own discretion. It can go to a variety of things, such as food rent, RVs, boats, college education, etc., but most people also have an altruistic side. They contribute money primarily to their churches and charities.
There are a multitude of charities including those for blinded veterans, animals support, poor people, etc. All of these have one thing in common. Contrary to companies, charitable organizations do not exist to make a profit. They exist only for the reason to disperse money which is given to them.
Tuesday, May 29, 2012
Tuesday, May 8, 2012
People Who Want Your Money
Ninety per cent of telephone calls I receive are from people who want my money.
By that I mean, they are soliciting funds for supposedly one good cause or
another, and the majority are requests for political contributions to support
campaigns which supposedly will aid me through the establishment of better
government. Similarly, 90% of my mail is in the same category.
As
mentioned, most of these are requests for political money, but those that draw
on my heartstrings through cruelty to animals, blinded and wounded veterans,
cancer etc. are not insignificant.
As I have thought about it, most of
these requests for compassionate money do not make sense except possibly for
lining the pockets of the organization leaders. It is my understanding that we
have the greatest medical support for our military in the world. Through our
taxpayer and government borrowed funds, we have veterans hospitals and other
medical facilities, which presumably are doing their job. I've never heard of a
blinded or otherwise wounded veteran, who has been denied reasonable medical and
psychiatric attention by the Military. Why then do we need private organizations
to solicit funds to do the same thing?.
Similarly for animal cruelty. It
is my understanding that every US community government has at least one person
responsible to enforce local regulations concerning animal cruelty, and we
periodically see in the TV news cases where enforcement has resulted. If we're
doing this on a socialized basis, why do we need to have it done by private
industry, which means your personal money?.
Let's also take cancer, or
diabetes, or blindness. The Federal government, through the National Institute
of Health, has spent billions of dollars and continues to spend billions of
dollars on cancer research and these other diseases. Again, this money comes
from your taxes and federal borrowing against your future. Why again, do we need
private industry to further support this work?
Lastly, let's consider
political solicitations. The simple philosophy behind these requests is that by
the presentation on the phone or through the mail, you will be convinced that
the person or organization requesting the funds will establish for you a better
government, which will improve your life. Most of the solicitations involve
description of the educational background of the candidate, his experience in
government or private industry, any other claims to fame, and finally an
indication of his personal beliefs in government, which may include reducing the
size, or making it more efficient, etc. Some of this information is useful, in
that you can use it to ultimately decide on what lever you press in the voting
booth, but that is not the point of his solicitation. He wants money for TV
advertising and to support a staff of promoters which hopefully will increase
the number of voters who will vote for him. Most people fall for these
solicitations and make contributions, which gives them the general feeling of
having done something to aid in establishing better government for themselves
and for the people. This is usually a misguided effort. The people who actually
profit from these contributions are individuals personally involved in the
campaign and especially the various TV advertisement broadcasting
concerns.
It is well
known in charity giving that specific help to those in need is the most
effective technique. Contributions to organizations soliciting funds and taxes
to government for dispersal to "needy" are primarily wasted. It is granted that
finding those in need is usually more difficult than writing a check in response
to e-mail solicitation from an organization, but there is a great difference in
effectiveness. Do you have a cleaning woman or a gardener working for you? Have
you discussed her/his finances to see whether he could use a little extra
financial support through raising his rates. Have you discussed with him the
pitfalls of scams involving the less educated victims and those least able to
support losses? Does he have children, some of whom may be particularly bright
and need support for education? What about the young person carrying out your
groceries at the supermarket? Does he have a career desire, which you can help
accomplish? Have you talked with him enough to know whether this would be
putting money down a rat hole? You may say, "Well, no. I don't have time". Would
you have time to just write a check to an organization, which will likely waste
your money, because maybe it will do some good?
This is the political
season and requests for campaign funds are rampant. Considerations on how you
spend your money should be the same as how you would spend it on charity. Be
specific for individuals and organizations and know something about them. What
are they actually doing, other than just tell you what they plan to do?. Writing
a check to the Republican Party is probably in the same category as writing a
check to the cancer fund. They already have plenty of money. In most cases, they
just don't properly spend it. It is more likely that you would be better able to
decide how how your money and should be spent.
As an example, I heard on
television this morning Jay Sekulow of the American Center for Law and Justice.
His basic message in the discussion with the news anchor was that the number of
criminal investigations of the Wall Street crowd is the lowest in many years, in
spite of the fact that Pres. Obama and his cabinet have especially targeted
those people for any lawbreaking. It doesn't cost Sekulow anything to be on TV
as a guest, and I've heard him a couple of times. He is obviously doing good
work in pressing the Administration to do its job of law enforcement. He hasn't
asked me for money, and I haven't sent him any. But I would do so before I would
send it to the Republican National Committee, which is basically noncommittal on
anything it does. Rather than just writing a check, phone J. Sekulow at
1.800.684.3110. Be specific. Ask him what his latest project is. Tell him what
you're interested in and ask how any money you send him might be used for an
item of your interest. After that discussion, you then decide whether to forget
the whole thing or write him a check for X dollars.
Are you interested in
a specific candidate. If so, don't start by writing a check. Start with a phone
conversation, and when you are satisfied that your money will be well spent, you
then write the check.
Wednesday, January 25, 2012
Confusion on Federal Income Taxes
Over the past week or two we have heard a lot about federal income taxes in the news. A Presidential contender has been criticized for he and his wife paying federal income taxes at only a 14% rate. However, the amount of taxes he and his wife paid in two years was about $7 million or $3.5 million per year.
During the President's State of the Union speech last evening, Warren Buffett's secretary was given a place of honor to sit with the first lady. The basis of honor, as indicated by the President in his speech, was that she paid more taxes than Warren Buffett. We will give the President an allowance for perhaps having made an honest mistake. What he likely wanted to say was that Warren Buffett's secretary paid her federal income tax at a higher rate than Warren Buffett.
However, this clearly demonstrates the whole problem of federal income tax discussion. It is silly to talk about federal income tax rates. We have some trillions of dollars in the federal budget deficit and in the federal debt. Notice that these measurements are in dollars, not in rates. When I buy a sack of potatoes or fill my tank with gasoline, I pay in dollars, not in rates. So, when we talk about tax payments or receipts, let's talk about real money, which is dollars. Some persons like to to talk about rates, because it intentionally confuses the situation and makes it easier to establish class distinction based on economics.
Just for kicks, I looked up the income tax rate for a husband and wife making an Adjusted Gross Income of $250,000 per year. Adjusted Gross Income is that amount of income which remains after taking deductions for charity, etc. and personal exemptions. The federal income tax would be $50,000 or a 20% rate. If you like to look at the total income, let's say that the couple donated $50,000 to charity, which would have made $300,000 in total income. Paying $50,000 in federal income tax gives a rate of 17%; not very far off from the 14% paid by the Presidential contender and his wife. But that doesn't say anything. A couple paying $3.5 million per year in federal income tax is certainly doing a lot more to support their government than a couple paying $50,000 per year.
Lets quit fooling around with techniques to make numbers look like what we want them to be. The truth on federal income taxes is in real dollars, not rates.
During the President's State of the Union speech last evening, Warren Buffett's secretary was given a place of honor to sit with the first lady. The basis of honor, as indicated by the President in his speech, was that she paid more taxes than Warren Buffett. We will give the President an allowance for perhaps having made an honest mistake. What he likely wanted to say was that Warren Buffett's secretary paid her federal income tax at a higher rate than Warren Buffett.
However, this clearly demonstrates the whole problem of federal income tax discussion. It is silly to talk about federal income tax rates. We have some trillions of dollars in the federal budget deficit and in the federal debt. Notice that these measurements are in dollars, not in rates. When I buy a sack of potatoes or fill my tank with gasoline, I pay in dollars, not in rates. So, when we talk about tax payments or receipts, let's talk about real money, which is dollars. Some persons like to to talk about rates, because it intentionally confuses the situation and makes it easier to establish class distinction based on economics.
Just for kicks, I looked up the income tax rate for a husband and wife making an Adjusted Gross Income of $250,000 per year. Adjusted Gross Income is that amount of income which remains after taking deductions for charity, etc. and personal exemptions. The federal income tax would be $50,000 or a 20% rate. If you like to look at the total income, let's say that the couple donated $50,000 to charity, which would have made $300,000 in total income. Paying $50,000 in federal income tax gives a rate of 17%; not very far off from the 14% paid by the Presidential contender and his wife. But that doesn't say anything. A couple paying $3.5 million per year in federal income tax is certainly doing a lot more to support their government than a couple paying $50,000 per year.
Lets quit fooling around with techniques to make numbers look like what we want them to be. The truth on federal income taxes is in real dollars, not rates.
Saturday, January 21, 2012
Pay Your Fair Share
We hear a periodic refrain from Pres. Obama, "Pay your fair share". He doesn't explain what that means, but I believe he's referring to the cost of federal government and since each citizen benefits equally from federal government, we should each pay an equal share of that cost.
The President has submitted a budget of $3.7 trillion. The number of US taxpayers is about 220 million. An equal share for each taxpayer would be $16,800. For my wife and me, that would be $33,600. President Obama's application is correct. My wife and I are not paying our fair share, even though we obtain all the benefits supplied by the federal government, such as patent protection, border protection from terrorists, food stamp availability, and reduced cost of medical care. Come to think of it, we don't get food stamps. Could we get a little credit to reduce our tax for that?
On second thought, I have heard that there are a lot of citizens who don't pay any federal income tax. That makes me feel a little better about my wife and I not paying our fair share, but why aren't these other people paying their fair share?
On another thought, I have heard that 5% of the US citizens are paying 90% of all federal income taxes, even though the total is less than $3.7 trillion. I feel a little sorry for them, because they are paying considerably more than their fair share. But I can rationalize that into thinking that they should be paying more than their fair share, because they're rich. My natural tendency to jealousy makes me believe they probably got rich by stealing from others. I'm not rich, because I don't steal, and yet I am as smart as they are and work as hard as they do. They must be crooks. Some say that rich people are rich, because they work smart and dedicate themselves to accumulating money, and that I could have done the same. I wonder if there's any truth in that?
I have heard that Presidential contender Romney pays only 15% tax on his income. When we start talking about percentages, I get a little confused. I like to talk about real money. The average taxpayer income is said to be $55,000 a year and the average tax is 11%. That means the average taxpayer is paying only about $6500 per year in federal taxes, when his fair share is $16,800. Looks like the average taxpayer is not paying his fair share. It is also said that if the taxpayer earns less than $50,000 a year, his tax rate is only 5%. That means he's only paying $2500 per year, which is way off the fair share. But let's get back to Romney. If his income is $2 million per year, he is paying $300,000 a year. Hey! That's way over his fair share. But then again he's rich and my jealousy streak says forget "the fair share" idea, soak him!
Well. If the fair share idea is not working, why not make it even a little better for most of us. Let's make everybody contribute all their assets to a general pool, which we then divide up, or maybe it would be better to leave it in the hands of the federal government, since the average taxpayer really doesn't know how best to make and spend money. The downside on this might be that few citizens would have any incentive to work. Maybe we can then get out the whips and get back to slavery. That has worked for a few thousand years.
The President has submitted a budget of $3.7 trillion. The number of US taxpayers is about 220 million. An equal share for each taxpayer would be $16,800. For my wife and me, that would be $33,600. President Obama's application is correct. My wife and I are not paying our fair share, even though we obtain all the benefits supplied by the federal government, such as patent protection, border protection from terrorists, food stamp availability, and reduced cost of medical care. Come to think of it, we don't get food stamps. Could we get a little credit to reduce our tax for that?
On second thought, I have heard that there are a lot of citizens who don't pay any federal income tax. That makes me feel a little better about my wife and I not paying our fair share, but why aren't these other people paying their fair share?
On another thought, I have heard that 5% of the US citizens are paying 90% of all federal income taxes, even though the total is less than $3.7 trillion. I feel a little sorry for them, because they are paying considerably more than their fair share. But I can rationalize that into thinking that they should be paying more than their fair share, because they're rich. My natural tendency to jealousy makes me believe they probably got rich by stealing from others. I'm not rich, because I don't steal, and yet I am as smart as they are and work as hard as they do. They must be crooks. Some say that rich people are rich, because they work smart and dedicate themselves to accumulating money, and that I could have done the same. I wonder if there's any truth in that?
I have heard that Presidential contender Romney pays only 15% tax on his income. When we start talking about percentages, I get a little confused. I like to talk about real money. The average taxpayer income is said to be $55,000 a year and the average tax is 11%. That means the average taxpayer is paying only about $6500 per year in federal taxes, when his fair share is $16,800. Looks like the average taxpayer is not paying his fair share. It is also said that if the taxpayer earns less than $50,000 a year, his tax rate is only 5%. That means he's only paying $2500 per year, which is way off the fair share. But let's get back to Romney. If his income is $2 million per year, he is paying $300,000 a year. Hey! That's way over his fair share. But then again he's rich and my jealousy streak says forget "the fair share" idea, soak him!
Well. If the fair share idea is not working, why not make it even a little better for most of us. Let's make everybody contribute all their assets to a general pool, which we then divide up, or maybe it would be better to leave it in the hands of the federal government, since the average taxpayer really doesn't know how best to make and spend money. The downside on this might be that few citizens would have any incentive to work. Maybe we can then get out the whips and get back to slavery. That has worked for a few thousand years.
Thursday, January 19, 2012
Disbanding the National Science Foundation
I previously wrote a blog recommending that the National Science Foundation (NSF) be disbanded. "Anonymous" responded that the budget of the NSF should be increased.
The National Science Foundation (NSF) is a research agency of the federal government. The 2011 fiscal year appropriation for this agency was $6.9 billion, of which $5.6 billion was specified for research and research equipment. Almost $1 billion was specified for Education and Human Resources.
While the NSF does some research in-house, most of its research is farmed out to universities in the form of grants. The primary question is whether these University grants are of any significant value to the taxpayer.
It is likely that most of the general public is not very clear on what research is. Perhaps the best way to describe it is in its application to private industry. Generally, private industry budgets approximately 5% of total company revenue for research. The purpose of spending money for research is for consideration of whether there are new technolgies, which should be recognized and identified for the ongoing health of the business. An example, is the recent announcement of Kodak's bankruptcy. Kodak had been a world leasder in the manufacture and sale of photographic film. With the advent of the digital camera, the film market dried up, as the public moved to use of the new digital camera in its photography. This is similar to the classic example of the collapse of the buggy whip industry, as automotive vehicles replaced horse drawn vehicles.
A second company research objective is to develop new products, which are consistent with the company's product line and which will help to increase revenue. For example, a faster drying paint for a paint company, or a better braking system for an automobile manufacturer.
However, companies must be alert to see that research expenditures are consistent with the general business plan and not excesive with respect to revenues. Some years ago, Anheuser Busch, the beer producer in St. Louis, was having difficulty with its stock performance, because profits were low. The board of directors decided that since beer was their main business and they had been in the beer business for so long that there was very little to learn further from research, they would disband the research department. In other words, the research budget was cut to zero. This decision and subsequent action considerably helped company profits to return to a normal position. It should be noted that when Anheuser Busch made this decision on limiting its research, it was not bankrupt, was not in budget deficit, nor had extreme debt which it could not pay. Notice the financial difference between Anheuser Busch and the present financial state of the US federal government.
With a fiscal 2011 appropriation of $6.9 biillion, NSF has 1700 employees. Most of these people do not do research. Rather, they oversee the the issuance of 10,000 grants per year. From the Internet, a few of these grants are: "Structural engineering of automobiles". I thought most car manufacturing companies do this routinely in order to remain competitive; "Connect students to real world science". I thought this was the job of local school boards, with some assistance from each state. "How humans & animals affect water quality and the reverse". I thought this was the job of municipal health departments.
About the year 1938, some physicists working in a laboratory in Germany obtained pictures showing that an atom of uranium 235 split with the release of energy. Using this basic research information, a collaboration of US companies and the US government was able to develop
an atomic bomb, which significantly reduced the length of the war with Japan and saved the lives of many American soldiers. Notice that the basic research was from Germany, not the US. American companies have routinely shown their ingenuity by developing a tremendous array of new products from their own research or from anyone else's rresearch, as in the atomic bomb example. Rather than companies frittering away their revenues on adhering to a grand list of federal business restrictions, would it not be more appropriate to have those companies spend some of that revenue on research for new products and their subsequent development? If that sounds like a reasonable approach, the obvious plan should be to eliminate government research, because we can't afford it, and engage in retraction of the various government restrictions which presently inhibit business.
"Anonymous" also said that "eliminating [the NSF] would have as a consequence a drastic decrease of quality and stature of US scientific research, with top foreign students and scientists preferring to work/study in more attractive countries". I was in graduate school in 1942, as a candidate for a Masters in Organic Chemisty. I had chosen a top US Uniiversity, but there were many others of similar stature. In spite of the fact that the NSF did not exist at the time (NSF created in May 1950), we had many forign students. US universities were then recognized as the best in the world. They are stiil the best, but I cannot agree that it is only because of the present contribution of the NSF. There is no doubt that pumping $6 billion of NSF/taxpayer funds into American Universities each year is bound to make American Universities more financially attractive to all university students (cite the "trickle down effect"), but it stiil doesn’t say American Universities would not be the best in the world without these funds. Consider also the rise of the public universities at taxpayer expense, without the NSF.
"Anonymous" says that only the socialist countries have shown to be leaders in government research. My response is what socialist countries? What kind of research? If we mean the Soviet Union, where is it now? Kaput! Did they spend too much money to help them into bankruptcy? Do we remember any outstanfding piece of research they accomplished. What about Cuba? Lots of good research coming from there? What about N. Korea? Same! Yugoslavia? In shambles! East Germany? Absorbed by West Germany! Contrary to these others, China is a growth country., but it is not known for its research. It is known for its development using the research and engineering developed by others, mostly US companies.
As a final personal condemnation, I refer to a basic characteristic of mankind, which is to seek and maintain a oersonal advantage over others. University professors are only human. They see in NSF grants an opportunuty to obtain finances to expand their pet projects, whether of traceable public advantage or not. As intellectually capable as most of these people are, they tend to ignore the idiocy of using the gravy train. The gravy train eventually runs out, but they believe in "get it while you can". The NSF gravy train will eventaully run out, either with the awakening of the general public, which supplies the gravy, or the demise of the US, when there is no more gravy, as in the other defunct socialistic countries. Keep in mind that there are many other applicants for the gravy, through food stamps, unemployment benefits, pensions, etc., which will make it run out faster.
The National Science Foundation (NSF) is a research agency of the federal government. The 2011 fiscal year appropriation for this agency was $6.9 billion, of which $5.6 billion was specified for research and research equipment. Almost $1 billion was specified for Education and Human Resources.
While the NSF does some research in-house, most of its research is farmed out to universities in the form of grants. The primary question is whether these University grants are of any significant value to the taxpayer.
It is likely that most of the general public is not very clear on what research is. Perhaps the best way to describe it is in its application to private industry. Generally, private industry budgets approximately 5% of total company revenue for research. The purpose of spending money for research is for consideration of whether there are new technolgies, which should be recognized and identified for the ongoing health of the business. An example, is the recent announcement of Kodak's bankruptcy. Kodak had been a world leasder in the manufacture and sale of photographic film. With the advent of the digital camera, the film market dried up, as the public moved to use of the new digital camera in its photography. This is similar to the classic example of the collapse of the buggy whip industry, as automotive vehicles replaced horse drawn vehicles.
A second company research objective is to develop new products, which are consistent with the company's product line and which will help to increase revenue. For example, a faster drying paint for a paint company, or a better braking system for an automobile manufacturer.
However, companies must be alert to see that research expenditures are consistent with the general business plan and not excesive with respect to revenues. Some years ago, Anheuser Busch, the beer producer in St. Louis, was having difficulty with its stock performance, because profits were low. The board of directors decided that since beer was their main business and they had been in the beer business for so long that there was very little to learn further from research, they would disband the research department. In other words, the research budget was cut to zero. This decision and subsequent action considerably helped company profits to return to a normal position. It should be noted that when Anheuser Busch made this decision on limiting its research, it was not bankrupt, was not in budget deficit, nor had extreme debt which it could not pay. Notice the financial difference between Anheuser Busch and the present financial state of the US federal government.
With a fiscal 2011 appropriation of $6.9 biillion, NSF has 1700 employees. Most of these people do not do research. Rather, they oversee the the issuance of 10,000 grants per year. From the Internet, a few of these grants are: "Structural engineering of automobiles". I thought most car manufacturing companies do this routinely in order to remain competitive; "Connect students to real world science". I thought this was the job of local school boards, with some assistance from each state. "How humans & animals affect water quality and the reverse". I thought this was the job of municipal health departments.
About the year 1938, some physicists working in a laboratory in Germany obtained pictures showing that an atom of uranium 235 split with the release of energy. Using this basic research information, a collaboration of US companies and the US government was able to develop
an atomic bomb, which significantly reduced the length of the war with Japan and saved the lives of many American soldiers. Notice that the basic research was from Germany, not the US. American companies have routinely shown their ingenuity by developing a tremendous array of new products from their own research or from anyone else's rresearch, as in the atomic bomb example. Rather than companies frittering away their revenues on adhering to a grand list of federal business restrictions, would it not be more appropriate to have those companies spend some of that revenue on research for new products and their subsequent development? If that sounds like a reasonable approach, the obvious plan should be to eliminate government research, because we can't afford it, and engage in retraction of the various government restrictions which presently inhibit business.
"Anonymous" also said that "eliminating [the NSF] would have as a consequence a drastic decrease of quality and stature of US scientific research, with top foreign students and scientists preferring to work/study in more attractive countries". I was in graduate school in 1942, as a candidate for a Masters in Organic Chemisty. I had chosen a top US Uniiversity, but there were many others of similar stature. In spite of the fact that the NSF did not exist at the time (NSF created in May 1950), we had many forign students. US universities were then recognized as the best in the world. They are stiil the best, but I cannot agree that it is only because of the present contribution of the NSF. There is no doubt that pumping $6 billion of NSF/taxpayer funds into American Universities each year is bound to make American Universities more financially attractive to all university students (cite the "trickle down effect"), but it stiil doesn’t say American Universities would not be the best in the world without these funds. Consider also the rise of the public universities at taxpayer expense, without the NSF.
"Anonymous" says that only the socialist countries have shown to be leaders in government research. My response is what socialist countries? What kind of research? If we mean the Soviet Union, where is it now? Kaput! Did they spend too much money to help them into bankruptcy? Do we remember any outstanfding piece of research they accomplished. What about Cuba? Lots of good research coming from there? What about N. Korea? Same! Yugoslavia? In shambles! East Germany? Absorbed by West Germany! Contrary to these others, China is a growth country., but it is not known for its research. It is known for its development using the research and engineering developed by others, mostly US companies.
As a final personal condemnation, I refer to a basic characteristic of mankind, which is to seek and maintain a oersonal advantage over others. University professors are only human. They see in NSF grants an opportunuty to obtain finances to expand their pet projects, whether of traceable public advantage or not. As intellectually capable as most of these people are, they tend to ignore the idiocy of using the gravy train. The gravy train eventually runs out, but they believe in "get it while you can". The NSF gravy train will eventaully run out, either with the awakening of the general public, which supplies the gravy, or the demise of the US, when there is no more gravy, as in the other defunct socialistic countries. Keep in mind that there are many other applicants for the gravy, through food stamps, unemployment benefits, pensions, etc., which will make it run out faster.
Saturday, January 14, 2012
Reducung Federal Government Spending is Just Talk
On his morning radio show, Neal Boortz recently related federal government finances to that of those of the average US family. He did this by eliminating eight zeros from the federal budget numbers and came up with the following numbers. I don't recall Neal's exact numbers, but these are in the ballpark. Average family income was $21,000. Average family annual expenses were $38,000 (note the annual budget deficit of $17,000). Credit card debt was $270,000. With this kind of activity, what could this family due to eventually become solvent? Perhaps a more important question is how long will the credit card company continued\ to advance $17,000 per year in additional debt, when there seems to be no possibility of ever recovering the $250,000?
There has been continuing talk on how to reduce the federal budget and start to pay off the horrendous national debt. The only problem is that it is just talk and nothing is being accomplished.
There are 16 Federal Departments under control of the President, although Congress is responsible for funding. Some of the better-known departments are Department of Energy, Department of education, Department of Defense, and Department of Health and Human Services. Each of these departments has a number of agencies. For example, the National Institutes of Health fall under the Department of Health and Human Services. The Environmental Protection Agency is an independent agency, not associated with any Department.
The Congress recently passed an omnibus appropriations bill for nine agencies. This was on top of an appropriations passed in November. It is difficult to obtain a complete picture from the Internet on the individual appropriations, but a few of them are:
DOEn $25.7 billion
NIH $30.7 billion
EPA $8.4 billion
DOD $72.4 billion
DOEd $39.9 billion
These few Departments and Agencies are only a sprinkling of the 16 Departments and agencies running into 100. Yet, the total appropriation for those few is $536 billion. Using the Boortz technique of knocking off eight zeros to reduce it to family budget analogy, the expenditure is $5360 per year in the family budget. This is obviously a considerable expenditure for a family of $21,000 average income and spending $38,000. If we knocked out this $5360, we could make a significant dent in the family budget deficit. The same could apply to the federal government deficit. Perhaps more significantly, it should be noted that the $536 billion appropriation is approximately the same as it was last year, which means no progress was made to reduce federal expenditures.
There has been continuing talk on how to reduce the federal budget and start to pay off the horrendous national debt. The only problem is that it is just talk and nothing is being accomplished.
There are 16 Federal Departments under control of the President, although Congress is responsible for funding. Some of the better-known departments are Department of Energy, Department of education, Department of Defense, and Department of Health and Human Services. Each of these departments has a number of agencies. For example, the National Institutes of Health fall under the Department of Health and Human Services. The Environmental Protection Agency is an independent agency, not associated with any Department.
The Congress recently passed an omnibus appropriations bill for nine agencies. This was on top of an appropriations passed in November. It is difficult to obtain a complete picture from the Internet on the individual appropriations, but a few of them are:
DOEn $25.7 billion
NIH $30.7 billion
EPA $8.4 billion
DOD $72.4 billion
DOEd $39.9 billion
These few Departments and Agencies are only a sprinkling of the 16 Departments and agencies running into 100. Yet, the total appropriation for those few is $536 billion. Using the Boortz technique of knocking off eight zeros to reduce it to family budget analogy, the expenditure is $5360 per year in the family budget. This is obviously a considerable expenditure for a family of $21,000 average income and spending $38,000. If we knocked out this $5360, we could make a significant dent in the family budget deficit. The same could apply to the federal government deficit. Perhaps more significantly, it should be noted that the $536 billion appropriation is approximately the same as it was last year, which means no progress was made to reduce federal expenditures.
Monday, January 2, 2012
Telephne Taxes at a 64% Rate!
Open E-mail to Rep. Neugebauer:
Randy,
I just paid my monthly land line telephone bill.
Suddenlink's charge for the service was $15.35. Taxes were $9.81.
THE TAX RATE WAS 64%.
Is this part of Obama's Plan to tax the rich or is it something Congress dreamed up?
Randy,
I just paid my monthly land line telephone bill.
Suddenlink's charge for the service was $15.35. Taxes were $9.81.
THE TAX RATE WAS 64%.
Is this part of Obama's Plan to tax the rich or is it something Congress dreamed up?
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