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Ok, after listening to the President's speech and Boehner's speeches I have a few thoughts.
The President is correct that both sides share in the blame of this problem AND he is also correct in piling a little more blame on the Republicans. The President throughout this whole thing has bent over backwards to try and get a deal done, and has even said he was willing to touch entitlement programs (mainly Social Security and Medicare). What more do the Republicans want him to do? Yes I admit that you do have to cut some spending (for example the F-22 which is grounded indefinitely, the F-35 which we really don't need, tax cuts that haven't resulted in job growth, etc), BUT that can't be your ONLY solution. At some point there has to be a revenue increase (and I'm sorry simply growing the economy isn't enough).
Look at it from a business perspective. Say Mr Deeds has 2 stores but he is running in the red. The Republican solution to his problem would be to simply cut his staff in half, keep giving himself a bonus, not take on ANY debt even if that debt is required to expand his business (aka balanced budget amendment), and leave prices unchanged. This banks on the idea that you can do more with less and that your customer service won't suffer. But if your customer service DOES decline (which is extremely likely) you are in an even worse situation than before, because you are still losing money but now you are also losing your loyal customers. How can you make money in that scenario? Whereas what the President would tell Mr Deeds is to cut about 1/4 of his staff, stop giving himself a bonus, AND raise his prices, say 5 cents. Customers, from what I have seen (and airlines are a good example) are far more willing to accept an increase in price, although grudgingly, than they are willing to accept a steep decline in the quality of customer service. With this scenario you may take a slight hit in customer service but people would still frequent his business, especially if what he offers is in demand. It also allows him to take on some debt (once his business starts to turn a profit) to expand his business.
Now you tell me which of those is the better solution long term
Monday, July 25, 2011
Saturday, June 4, 2011
The Farse of Federal Pay
Ok it is time that Republicans STOP with this “federal employees get so much more than private sector employees” bull shit. The rank and file federal employee makes as much or LESS than people in the private sector.
In the story below, the report cited in it claims that 77,000 people make more money as federal employees than the governors of the states in which they live. 77,000 out of about 2 million, which equals an earth shattering 3.85% federal employees. They are seriously trying to make a case that 77,000 people are budget busters?!
If the Republicans want to cut federal pay SO badly, then they need to start with themselves. They need to now wait 6 months before receiving any benefits when they first get their jobs as Reps or Senators (as us lowly employees do). They must pay into their own TSP with a maximum 10% agency match (like we do) and only have their TSP and Social Security as their government provided retirement (any new employee in the last 20 years or so doesn’t get any type of pension). They also have to have their starting pay reduced to $40,000 and have ALL their “expense accounts” terminated. No more jets, drivers, etc. Also, and I know I’m gonna get hell for this but it’s true, if they are truly serious about reducing federal employees’ pay and benefits then they need to start downsizing the military. Now let me be clear, I think the military is actually UNDER paid but I’m not the one demanding cuts. When you consider the costs of training, moving, normal salary, health care, equipment (buying and maintaining), etc. the military is by far the most expensive group of government employees.
Here is a thought, how about they, and the Democrats, stop acting like 2 year olds and actually THINK!
http://www.washingtonpost.com/local/politics/report-some/2011/06/01/AGZYAkGH_story.html
In the story below, the report cited in it claims that 77,000 people make more money as federal employees than the governors of the states in which they live. 77,000 out of about 2 million, which equals an earth shattering 3.85% federal employees. They are seriously trying to make a case that 77,000 people are budget busters?!
If the Republicans want to cut federal pay SO badly, then they need to start with themselves. They need to now wait 6 months before receiving any benefits when they first get their jobs as Reps or Senators (as us lowly employees do). They must pay into their own TSP with a maximum 10% agency match (like we do) and only have their TSP and Social Security as their government provided retirement (any new employee in the last 20 years or so doesn’t get any type of pension). They also have to have their starting pay reduced to $40,000 and have ALL their “expense accounts” terminated. No more jets, drivers, etc. Also, and I know I’m gonna get hell for this but it’s true, if they are truly serious about reducing federal employees’ pay and benefits then they need to start downsizing the military. Now let me be clear, I think the military is actually UNDER paid but I’m not the one demanding cuts. When you consider the costs of training, moving, normal salary, health care, equipment (buying and maintaining), etc. the military is by far the most expensive group of government employees.
Here is a thought, how about they, and the Democrats, stop acting like 2 year olds and actually THINK!
http://www.washingtonpost.com/local/politics/report-some/2011/06/01/AGZYAkGH_story.html
Sunday, April 24, 2011
Tax cuts vs Tax Increases and why the latter is the better (when used wisely)
Tax cuts against tax raises is one of the oldest fights in politics. I am going to lay out for you why I believe wise tax increases will prove more fruitful.
I begin with tax cuts. Who doesn't want more money instantly? Everyone of course. Who benefits the most from them? The middle class, the rich and the poor. So why you may ask do I dislike them as sound government policy? Let me explain it to you. The biggest problem with tax cuts, especially in a recession, is that there is absolutely nothing that forces those who receive such cuts, to spend the extra money to grow the economy. The whole point of a business is to make as much money as possible with your product(s) while at the same time trying to minimize your risk as much as possible.
Now if a person is already wealthy (for reference let's say $350,000 of income a year) and owns a productive business, is he/she going to automatically jump up and spend more on the business if given a tax cut? In booming economic times, when his/her product(s) is in great demand, sure it will get spent on the business. The benefits in this case out-weigh the risks. The business is already profitable and by using the extra money from the cuts to expand into new markets the business can earn even more profit. This in turn allows the employees to potentially (key word) to earn more money, which allows more spending, and in turn fuels the economy. Now what happens if there is an economic recession?
Again, a business's goal is to make money as fast and as possible with minimal risk. Even if the business is still doing fairly well, in a down economy is the risk of spending the extra cash from tax cuts on expansion worth the gain? Maybe. Notice we have gone from the benefits far out-weighing the risks, to maybe. If you are successful can a person, in a down economy, take a chance and risk losing money on a "maybe"? From a sound business point of view the answer is no. As it stands your business is making money as is, but if you expand and the market can't support you then you risk losing everything. In a down economy the smart business move is to put the extra money into investments. You can spend it on cheap stocks, bonds, lock it away in CDs, put it in savings accounts, etc. By spending the extra cash in that sense the risk is lowered by diversifying, and most, if not all, of that invested money can be quickly accessed and moved around.
That is the safest bet to play in a down economy, which in fact is what we are seeing today. Businesses are scoring profits, and the wealthy have gained wealth but that hasn't led to a massive increase in the economy and jobs. This of course means that the economy becomes more and more stagnant, and in turn reduces the chances of businesses expanding causing the cycle to continue. Also, from the government side, tax cuts do in fact cost the government money. You are reducing the net income of the government which is in essence a cost. If you cut taxes and the economy doesn't grow then you are now out potentially trillions of dollars.
The other option is tax raises. A tax increase is a very toxic issue, especially in an economic recession, but it is a sure fire way to raise revenue. Unlike tax cuts, tax increases promise an influx of income because people ALWAYS earn money and people ALWAYS have to spend it in order to live in today's world. Now yes, a tax increase does reduce the amount of spendable income for both individuals and businesses, however, you can have an effective tax increase with only a small percentage (going from 36 to 39% on the wealthiest income taxes for example) which in turn limits the impact on that spending.
Going back to the goal of businesses, if their taxes go up they have two choices: cut (which will hurt you eventually), or take out a loan and try to expand your market to make up for the difference. The chance of losing income through the tax reduces the risks of expansion. If a business can see a reduction in profits either way it makes more sense to expand that business while you can and tap into new markets. By expansion you are forced to hire, which gives people more money, which they will likely spend in your business, which grows the economy as well as the business' bottom line. Eventually you find your profits at equal, or greater levels than it would have been had the business done nothing.
Now don't misunderstand me, I am not saying that taxes be raised a little every year. In fact tax raises have two faces. You can raise taxes on existing tax bases OR you go find a new tax base. By finding a new tax base you can raise your taxes by 3% without effecting profits or income. In addition if you find multiple new bases, you spread that 3% out and reduce it on each base (2 new tax bases set at 1.5% for example).
Now by no means is one a cure all answer because you have to analyze each month, each year, each day. But by keep to one of the other is a recipe for disaster. We have had the current tax rates since 2001, and they simply have not paid themselves off with economic growth. As much as people try to deny it and make excuses, that is the true fact. 10 years and only a certain part of the country has grown wealthier (and it isn't the biggest part of the country). If businesses and people aren't spending enough, then maybe its time to change policies and force the job creators to choose whether to stand pat and lose money in taxes, or to try and expand to make up the difference. Reagan and Bush senior raised taxes during troubled economic times (Savings and Loan crisis) and in the late 90s we had a booming economy with a multibillion dollar government surplus. If it was good enough for Reagan and Bush why isn't it good enough to try now?
I begin with tax cuts. Who doesn't want more money instantly? Everyone of course. Who benefits the most from them? The middle class, the rich and the poor. So why you may ask do I dislike them as sound government policy? Let me explain it to you. The biggest problem with tax cuts, especially in a recession, is that there is absolutely nothing that forces those who receive such cuts, to spend the extra money to grow the economy. The whole point of a business is to make as much money as possible with your product(s) while at the same time trying to minimize your risk as much as possible.
Now if a person is already wealthy (for reference let's say $350,000 of income a year) and owns a productive business, is he/she going to automatically jump up and spend more on the business if given a tax cut? In booming economic times, when his/her product(s) is in great demand, sure it will get spent on the business. The benefits in this case out-weigh the risks. The business is already profitable and by using the extra money from the cuts to expand into new markets the business can earn even more profit. This in turn allows the employees to potentially (key word) to earn more money, which allows more spending, and in turn fuels the economy. Now what happens if there is an economic recession?
Again, a business's goal is to make money as fast and as possible with minimal risk. Even if the business is still doing fairly well, in a down economy is the risk of spending the extra cash from tax cuts on expansion worth the gain? Maybe. Notice we have gone from the benefits far out-weighing the risks, to maybe. If you are successful can a person, in a down economy, take a chance and risk losing money on a "maybe"? From a sound business point of view the answer is no. As it stands your business is making money as is, but if you expand and the market can't support you then you risk losing everything. In a down economy the smart business move is to put the extra money into investments. You can spend it on cheap stocks, bonds, lock it away in CDs, put it in savings accounts, etc. By spending the extra cash in that sense the risk is lowered by diversifying, and most, if not all, of that invested money can be quickly accessed and moved around.
That is the safest bet to play in a down economy, which in fact is what we are seeing today. Businesses are scoring profits, and the wealthy have gained wealth but that hasn't led to a massive increase in the economy and jobs. This of course means that the economy becomes more and more stagnant, and in turn reduces the chances of businesses expanding causing the cycle to continue. Also, from the government side, tax cuts do in fact cost the government money. You are reducing the net income of the government which is in essence a cost. If you cut taxes and the economy doesn't grow then you are now out potentially trillions of dollars.
The other option is tax raises. A tax increase is a very toxic issue, especially in an economic recession, but it is a sure fire way to raise revenue. Unlike tax cuts, tax increases promise an influx of income because people ALWAYS earn money and people ALWAYS have to spend it in order to live in today's world. Now yes, a tax increase does reduce the amount of spendable income for both individuals and businesses, however, you can have an effective tax increase with only a small percentage (going from 36 to 39% on the wealthiest income taxes for example) which in turn limits the impact on that spending.
Going back to the goal of businesses, if their taxes go up they have two choices: cut (which will hurt you eventually), or take out a loan and try to expand your market to make up for the difference. The chance of losing income through the tax reduces the risks of expansion. If a business can see a reduction in profits either way it makes more sense to expand that business while you can and tap into new markets. By expansion you are forced to hire, which gives people more money, which they will likely spend in your business, which grows the economy as well as the business' bottom line. Eventually you find your profits at equal, or greater levels than it would have been had the business done nothing.
Now don't misunderstand me, I am not saying that taxes be raised a little every year. In fact tax raises have two faces. You can raise taxes on existing tax bases OR you go find a new tax base. By finding a new tax base you can raise your taxes by 3% without effecting profits or income. In addition if you find multiple new bases, you spread that 3% out and reduce it on each base (2 new tax bases set at 1.5% for example).
Now by no means is one a cure all answer because you have to analyze each month, each year, each day. But by keep to one of the other is a recipe for disaster. We have had the current tax rates since 2001, and they simply have not paid themselves off with economic growth. As much as people try to deny it and make excuses, that is the true fact. 10 years and only a certain part of the country has grown wealthier (and it isn't the biggest part of the country). If businesses and people aren't spending enough, then maybe its time to change policies and force the job creators to choose whether to stand pat and lose money in taxes, or to try and expand to make up the difference. Reagan and Bush senior raised taxes during troubled economic times (Savings and Loan crisis) and in the late 90s we had a booming economy with a multibillion dollar government surplus. If it was good enough for Reagan and Bush why isn't it good enough to try now?
My ideas to tackle the budget
Ok so I have been slamming the Republicans repeatedly for what they are trying to cut out of the budget to try and balance it. Now one thing I think the Republicans don't get is that there is no way in hell you are going to balance the budget in one year. It is going to take 2 or 3 years. That being said, here is what I would do, and keep in mind with what I am going to propose that I am of the liberal political persuasion:
1) The Social Security age has to be raised to 70 or 75 years old. Not in 5 years, that has to happen now. People are living far longer now than they did in the 40s, 50s, and 60s. When you are pulling it out at 65 and living until you are 95, that is a lot of money. Social Security should be used to compliment certain people's retirement, but it shouldn't comprise the WHOLE thing. Also, people who have retirement incomes over say $50,000 a year (I'm willing to change this) should NOT be able to draw Social Security. For 2 people (each earning $50,000), with their house paid for, that should be more than enough to live comfortably. Now people will say "well I paid into it so I should get some" well guess what, every single person (at least in Utah) is paying for YOUR kids to go to school even though they have none of their own. Or a family with 2 kids is helping to pay for your 10 kids to go through school. Don't get me wrong, I am all for public schools but the fact is that some people will pay into it and never see a direct benefit.
2) DO NOT PRIVATIZE SOCIAL SECURITY! This is the absolute thing that could happen. As we saw with the recent recession, we can't afford to put that much risk on Social Security.
3) Stop the Medicare/Medicaid double dipping. If you can afford to pay for your own insurance premiums then you should not be able to use Medicare. With the recent health care reform bill, ANYONE can get insurance (granted I would have liked to see a Medicare for all but whatever) so the fear of being rejected due to age or medical conditions is gone. Also, if you retired from the military and as a result are covered by Tricare for life, then you should not be able to get Medicare/Medicaid. This may sound harsh but if you already get benefits we simply can't afford right now for those benefits to be doubled.
4) Cut the DoD budget. Secretary Gates has already said he is willing to cut $80 billion out of his budget, so let him. No one else is daring to do it, but the fact is that it has to be done. The DoD budget is one of the biggest after Medicare and Social Security and it cannot be ignored.
5) You HAVE to raise taxes. Even Reagan, who Republicans treat as a god, realized that he had to raise revenue. He did it by raising the gas tax and a few other things. There was an article on Yahoo Finance that said the population of millionaires in the U.S. has grown 8%. 8% in a recession! The tax rates on the wealthiest Americans needs to go up, at least back to the level it was at during Clinton (which I believe was 38%) or even just a tad higher.
6) Close the tax loopholes so that people who can afford to get accountants to wiggle out of paying ANY taxes will have to pay them.
7) Greatly eliminate farm subsidies. I know farming can be an expensive endeavor BUT some of these subsidies haven't done shit (such as ethanol).
8) Eliminate the tax breaks/loopholes for oil, coal, and natural gas companies. These guys are making PLENTY of money without the government helping them out.
9) End the War on Drugs and at least legalize pot. It stops some wasteful spending, and gives you a new tax base. It also betters the health of Americans because when you legalize it, you can put in safety and quality controls so that users don't end up getting something that contains something that could kill them.
These are the bulk of what I would do, and most would need time to see how they work out. They aren't easy to take in some cases but most need to be done.
http://finance.yahoo.com/news/US-millionaires-population-cnnm-649773567.html?x=0
http://www.cnn.com/2011/POLITICS/03/17/house.of.reps.npr.funding/index.html?hpt=T2
1) The Social Security age has to be raised to 70 or 75 years old. Not in 5 years, that has to happen now. People are living far longer now than they did in the 40s, 50s, and 60s. When you are pulling it out at 65 and living until you are 95, that is a lot of money. Social Security should be used to compliment certain people's retirement, but it shouldn't comprise the WHOLE thing. Also, people who have retirement incomes over say $50,000 a year (I'm willing to change this) should NOT be able to draw Social Security. For 2 people (each earning $50,000), with their house paid for, that should be more than enough to live comfortably. Now people will say "well I paid into it so I should get some" well guess what, every single person (at least in Utah) is paying for YOUR kids to go to school even though they have none of their own. Or a family with 2 kids is helping to pay for your 10 kids to go through school. Don't get me wrong, I am all for public schools but the fact is that some people will pay into it and never see a direct benefit.
2) DO NOT PRIVATIZE SOCIAL SECURITY! This is the absolute thing that could happen. As we saw with the recent recession, we can't afford to put that much risk on Social Security.
3) Stop the Medicare/Medicaid double dipping. If you can afford to pay for your own insurance premiums then you should not be able to use Medicare. With the recent health care reform bill, ANYONE can get insurance (granted I would have liked to see a Medicare for all but whatever) so the fear of being rejected due to age or medical conditions is gone. Also, if you retired from the military and as a result are covered by Tricare for life, then you should not be able to get Medicare/Medicaid. This may sound harsh but if you already get benefits we simply can't afford right now for those benefits to be doubled.
4) Cut the DoD budget. Secretary Gates has already said he is willing to cut $80 billion out of his budget, so let him. No one else is daring to do it, but the fact is that it has to be done. The DoD budget is one of the biggest after Medicare and Social Security and it cannot be ignored.
5) You HAVE to raise taxes. Even Reagan, who Republicans treat as a god, realized that he had to raise revenue. He did it by raising the gas tax and a few other things. There was an article on Yahoo Finance that said the population of millionaires in the U.S. has grown 8%. 8% in a recession! The tax rates on the wealthiest Americans needs to go up, at least back to the level it was at during Clinton (which I believe was 38%) or even just a tad higher.
6) Close the tax loopholes so that people who can afford to get accountants to wiggle out of paying ANY taxes will have to pay them.
7) Greatly eliminate farm subsidies. I know farming can be an expensive endeavor BUT some of these subsidies haven't done shit (such as ethanol).
8) Eliminate the tax breaks/loopholes for oil, coal, and natural gas companies. These guys are making PLENTY of money without the government helping them out.
9) End the War on Drugs and at least legalize pot. It stops some wasteful spending, and gives you a new tax base. It also betters the health of Americans because when you legalize it, you can put in safety and quality controls so that users don't end up getting something that contains something that could kill them.
These are the bulk of what I would do, and most would need time to see how they work out. They aren't easy to take in some cases but most need to be done.
http://finance.yahoo.com/news/US-millionaires-population-cnnm-649773567.html?x=0
http://www.cnn.com/2011/POLITICS/03/17/house.of.reps.npr.funding/index.html?hpt=T2
On the obsession of education cuts and a blip on gun control
In a time of tight budgets, I wanted to express my distaste for this obsession with cutting the budgets for education. How can people stand and preach about getting this country back on top on one hand and then demand the elimination of its education system on the other? I understand that our system isn’t the greatest but it is a hell of a lot better than cutting it out completely! If you cut public education you are severely hurting the future of this country because without public education people would be forced to enroll their kids in private schools. Now for some this would be an improvement but what about those who have single parents or parents who can barely afford health insurance let alone paying for a private education. Yes for the most part private schools are often superior to public schools BUT that is because of their price, size, etc. If you cut public education and funnel huge amounts of kids into private schools you suddenly eliminate many of their advantages. You crowd their classrooms, forcing prices to increase, which would force more people to choose debt or an educated child. Sure cutting education and other social programs are great talking points, but the reality is that doing so would in the long run hurt this country far more than it would help.
This is just a small portion of Rand Paul's, and Tea Party supported, proposed budget. The link below will give you more of a taste of how absurd this guy really is in terms of what he wants to do to the budget. This country tried to have a tiny central government, which is what the Tea Party wants, once before, it was called the Articles of Confederation and it failed bad enough that people decided a new constitution was needed.
http://articles.latimes.com/2011/jan/25/news/la-pn-0125-rand-paul-budget-20110125
On the subject of guns, again, I believe that gun control IS constitutional and in fact demanded. Thanks to an interview Mike Bloomberg gave to Lawrence O’Donnell tonight I went back and reread the 2nd Amendment and immediately saw what he stated and which I have overlooked a lot. The 2nd Amendment does grant the right for us to carry guns in this country BUT the first four words of the amendment are “A well regulated Militia”. If people are going to pound their chests about their 2nd Amendment rights, then they have to accept the ENTIRE amendment. Not only does the amend say you can have a gun, but it REQUIRES those guns to be well regulated. Therefore an assault weapons ban, extended clip bans, requiring permits, etc are TOTALLY constitutional.
This is just a small portion of Rand Paul's, and Tea Party supported, proposed budget. The link below will give you more of a taste of how absurd this guy really is in terms of what he wants to do to the budget. This country tried to have a tiny central government, which is what the Tea Party wants, once before, it was called the Articles of Confederation and it failed bad enough that people decided a new constitution was needed.
http://articles.latimes.com/2011/jan/25/news/la-pn-0125-rand-paul-budget-20110125
On the subject of guns, again, I believe that gun control IS constitutional and in fact demanded. Thanks to an interview Mike Bloomberg gave to Lawrence O’Donnell tonight I went back and reread the 2nd Amendment and immediately saw what he stated and which I have overlooked a lot. The 2nd Amendment does grant the right for us to carry guns in this country BUT the first four words of the amendment are “A well regulated Militia”. If people are going to pound their chests about their 2nd Amendment rights, then they have to accept the ENTIRE amendment. Not only does the amend say you can have a gun, but it REQUIRES those guns to be well regulated. Therefore an assault weapons ban, extended clip bans, requiring permits, etc are TOTALLY constitutional.
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