Mar

7

If we are going to have a civil and meaningful discussion and get to an “end-game” we all need to agree on a few basic principles.

First and Foremost: “You don’t get something for nothing”

Most of the voting bloc routinely votes in politicians that run on the platform of giving us something for nothing. We routinely vote out politicians that are straight with us on this accord.

Second: Fiscal Responsibility

It is high time to amend our constitution and require that the Federal Budget be balanced. Whether you are an individual, a company, or a government you can only spend more than you make for so long. At some point one has to pay their debts.

Third: Save For a Rainy Day

When times our good we seem to think they will last forever. When times are bad we get into this funk that time will always be bad. Fact: If you look at the history of this nation (or any nation for that matter) you will see that there are economic cycles. No matter what we seem to do, seem to legislate this is just a reality. Saving for a rainy day seems to be something our government has never tried. There are many of you that practice this principle and understand how it can save you during tough times.

Fourth: Where money is concerned their will always be greed and corruption.

I could make this list 100 miles long and not begin to cover all the incidences of this. The power of money and wealth can corrupt the most well meaning people.

If we have agreement on these four items we can begin the discussion

Mar

3

Dude, I am actually with you on reforming social security but you are a numbers guy so I want you to look at these numbers. I too am a numbers guy.

I am 52. Myself and my employer have collectively paid $186,000 into Social Security thus far. By the time I retire that figure will be roughly $398,000. At 3% interest on this money (which is a very modest rate of return) the Federal Government will owe me around $793,000.

With an average life expectancy of 78, I went out to the Social Security website and calculated what I would receive if I retired at 62.  The amount I would receive would be about $632,000 (these number assume I live to 78). If I waited until I was 67, the amount I would recieve would add up to $698,000. Both these numbers fall short to what I and my employers paid into the system.

First, I am all for reform. If your idea is not going to screw me over, or the millions of others in my relative age group I am all ears.

BUT, the facts are that I paid cold hard cash into this system for well over 30 years. Real dollars. Social Security may have been an entitlement program the first 20-30 years it was run, but, it is not an entitlement for people like me. We have paid into this system and we expect back what we paid in.

The fact that you and all the elected officials before you took the Social Security surpluses and spent them is not our problem it is yours. We expect you to fix it. I am all for ideas that keep this program solvent and sustainable. I am NOT willing to give up my real investment into this (mandatory) program because of your fiscal irresponsibility, or the fiscal irresponsibility of both parties over the years. No one else that has paid into this system is willing to give their capital investment up as well.

DO NOT MESS WITH OUR MONEY! Y’all can solve this problem without screwing us.

Feb

28

Tax OTC Derivatives

February 28, 2010 | Leave a Comment

There are 683 trillion dollars in OTC Derivatives contracts. I am not kidding. I am not making this up (http://www.everydollarmatters.com/otc_derivatives.php). Thinking that we can regulate this nonsense is a joke. We do not need to regulate this we need to stop it altogther. Here is my solution. It is one that could also significantly reduce out national debt in the next few years.

Tax OTC Derivatives.

First, on all new derivative contracts we will require a 1/2% on the face value of the contract itself, payable at time of the contract signing.  1/2% may not seem like much but on a $100 million dollar contract (which is not a big contract in that world) that comes out to a cool $500,000. For every trillon dollars written, Uncle Sam collects 5 billion dollars.

Derivatives started in 1980 (roughly) and have grown from 0 to $683 trillion in contracts. Simple math puts us at about 23 trillion per year in new contracts (Actually the number is much higher that that), but we will use that as our figure. This gives us 100 billion each year in new tax revenues.

But we are not done.

For payouts on a derivatives contract Uncle Sam collects a flat 25% tax.

We could be out of debt very quickly. In all reality, what will happen is this taxation will force this sector to quickly regulate itself.

 

Jan

20

In 7 of the 8 years Bush was in office we received a tax cut. Since I do want to spark civil unrest I will not even tell you what people with incomes over 100,000 got out of the deal (much more than the numbers you see below).

My source for this information is 100% solid. I used the IRS Tax Tables to determine this information. If you think I am snowing you, Google and look for yourself. They are readily available on the net.

If you were married with a total income of $25,000 your average tax break over his 8 years was $2.80 a month.

If you were married with a total income of $50,000 your average tax break over his 8 years was $7.55 (1.1%) a month. 

If you were married with a total income of $95,000 your average tax break over his 8 years was $39.55 (2.8%) a month. 

Share with me how those numbers increased the quality of your life? As I said, these are not B.S. numbers, they are straight out of the tax tables you and I use to file our taxes.

So, what did this cost us? [This is where Macro and Micro are worlds apart]

The Bush tax cuts will cost the American Public $2.48 trillion over the 2001-2010 period. This includes the revenue loss of $2.11 trillion that results directly from the Bush tax cuts as well as the $379 billion in additional interest payments on the national debt. The tax cuts were DEBT FINANCED! China I believe covered most of the costs.

 

Apr

26

Is your job secure (as much as it can be for these times)?

Have you been saving to buy a home?

Is your credit good?

…and the Government has a program that could put up to $8000 dollars you pay to them back into your pocket.

For more information read “First time home buyer tax credit.”

Feb

22

My hat is off to both Charlie Crist and and Arnold Schwarzenegger for working with the new Administration as well as their local governments in solving the current problems we face. In my eyes you are both still conservatives and have not “sold out.” The majority of Americans applaud you.

Feb

12

How about if the Federal Government gave us a healthy tax credit for charitable giving. I am talking about for every dollar of giving, getting a .35 cent straight reduction off our taxes.

In a time when there are going to be many in need this would be a great partnership between Washington and the People.

Jan

13

Next time you screw up really big with your money or your job wouldn’t it be great if the U.S .Government cut and sent you a check for you to right-your-wrong and cover your losses. 80 billion to AIG, billions into our banking system.  800 billion allocated to bail out the the mortgage meltdown and not a dime spent on that problem. The crap that is happening now beyond stupidity.

Obama has yet to take office and his plan is to cut taxes and increase spending. This would be different from the Bush agenda how?

Huge job cuts are on the horizon, we are not close to a bottom in the market, the economy has pretty much ground to a halt, social security is a ponzi scheme that will shortly not work, and medicare/medicaid is being payed for with IOUs that that areed not even account for as part of our growing national debt. Hmmmm, have I missed anything.

Let us all make sure we try to fix all these problems that took years and decades to create in a few weeks or months. This makes sense and is reasonable.

Business as usual. Welcome to the looney bin.

Dec

27

How much government debt is ok?

I have been reading that in past years our government has been fiscally responsible. I have read and heard through the media that Roosevelts greatest fault was not deficit spending to get us out of the great depression quicker. I even heard this from some of our most prominent economists and financial leaders.

Guess what?

It is just not true. I can prove this to you with figures provided to us by our federal government. In fact, since 1913 we have had only 23 years of Federal budget surpluses and 73 years of deficits. Here are some interesting facts:

So what about all of this?

The question I have is does that 712 billion dollars still matter? Does it really need to be paid back? Think about this for a moment. These are dollars that were paid by our government to other entities (businesses, governments, individuals) both domestic and foreign.

1980 was 28 years ago. That is a long time. Is it not the role of government to regulate the monetary supply in a way that does not lead to excessive inflation, or deflation? I am not suggesting that we continue to crank up the printing presses and fund more debt. We can look to the Weimar Republic from the end of WWI until the beginning of WWII where money got so out of control that it took a wheel barrow of paper money to buy a loaf of bread. We can also look to Argentina from the mid seventies until the early eighties. In 1975 the largest bill they printed was 1000 pesos. In 1981 the largest denomination bill they printed was 1,000,000 pesos.

So how much government debt is ok?

I am not sure anyone really knows the answer to this question. The more I study all of this historical data the more I am convinced that the debts of the past just do not matter anymore. Seriously, lets say we retire the 712 billion in debt we accrued from 1913 until 1980. So what?

What I am saying is that governments are the source of our money supply, and because of this it makes them different than you or I. Businesses are different as well. However, businesses can sell stock as a means to raise money. In a sense this is a lever similar to the govenments printing press.

Have I changed my tune?

Not really. I think the current level of deficit spending during the Bush administration (1.75 trillion from 2002 until 2007) is too much. Of course his father, Bush one, deficit spent 1.44 trillion in todays dollars (930 billion in real dollars) in only four years. Reagan spent 2.6 trillion in todays dollars during his administration (1.3 trillion in actual dollars). I think if Obama does not have a sensible plan for his stimulus that we could end up in a period of high inflation. Of course if he does not act we could end up moving into a period of deflation. If this holiday season was not early evidence of that I am not sure what is.

I think the financial and mortgage meltdown is still going to take our economy into a tailspin leading to double-digit unemployment and a further deterioration of the dissapearing middle class.

I still believe more than ever in personal fiscal responsibility with ones money. I believe rampant consumer credit by a small percentage of our population has helped to contribute to the deterioration of our economy.

I believe we all need to live within our means, government included (though they seem to be able to get away with a certain degree of deficit spending, I am just not sure, nor is anyone lese what this degree is).

I believe we have a healthcare and social security crisis that is going to swallow us whole if we do not deal with it within the next few years. Social security is a ponzi scheme whose end is near.

I believe there is a level of trust and faith that applies to any economy that has little to do with the fundamentals.
Some of the sources used in writing this blog:
http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm
http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?rsCPI_currentPage=0
http://www.whitehouse.gov/omb/budget/fy2004/pdf/hist.pdf
www.gpoaccess.gov/usbudget/fy08/sheets/hist01z1.xls

Dec

16

STOP STOP STOP

December 16, 2008 | Leave a Comment

What is the matter with you idiots? Another band-aid, trying to solve a problem decades in the making with yet another ignorant short term fix. This is a sad, sad day in America. We have all lost our minds. Where is Obama? How is he going to deal with trillions more in debt piled on before he takes over? We need fiscal sanity!!! We need fiscal sanity NOW!!!

So tell me federal government, you have put us trillions in debt and your latest solution is to drop the Federal Fund Rate from 1% to .25%. For those of you that are not sure the Federal Fund Rate is the rate that the government loans money to financial institutions.

What does this mean for you? It means you can put your damn money in the mattress because it will earn more than it will in the bank and it will be more accessible to you.

What does it mean to the government? Well this is one of the means how our government makes income to support our national infrastructure. So our federal government that is in debt cuts revenue as a means to solve this problem. Think I am full of it? Read here for big picture (http://www.wsws.org/articles/2004/jan2004/imf-j12.shtml), read here (http://www.imf.org/external/pubs/nft/op/227/index.htm) for coma inducing details.

Let me excerpt a prophetic and sobering statement from the first link I provided you: ‘The warning came in a 60-page report entitled “US Fiscal Policies and Policies for Long-Run Stability” published last Wednesday. It said that large US budget deficits posed “significant risks” for the US and the rest of the world and that the rising US external debt, estimated to hit the equivalent of 40 percent of gross domestic product within the next few years—an “unprecedented level” for a large industrial country—could destabilise international financial markets.’

This warning came in Q1 2004!!!!!!!

Let’s just cut through the crap. We have our insolvent federal government cutting sources that they derive revenue from, pledging trillions they don’t have to bailout companies with inept senior management that are essentially bankrupt and will continue to lead. These companies getting the money are announcing initial profound job cuts. SO WHO THE HECK ARE WE BAILING OUT? We are bailing out the companies, not the workers. What are government is doing is pledging is the uncollected tax revenue of future generations that has yet to be collected.

ALL OF YOU. I MEAN ALL OF YOU need to read this and write your congressman and tell them to STOP. 

Folks I am tired of the crap. I am tired of people telling us we are just being negative. This is likely the last chance we have as a nation to dig out and the decisions that are being made by our current incumbant federal government both Democrat and Republican, and our inept leaders of industry is going to put us to the brink of no return if we have not already arrived. There is no quick fix for this. Looking at what is going on we are headed for a situation that is going to make the great depression look like a cruise to the Bahamas.

— keep looking »

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