Government’s reponse to job losses… give me more!

The economy continues to contract and people continue to lose their jobs. It is also important to remember that companies are reporting losses and people that work on commission, though employed are suffering huge losses in income. All of this means less taxable income to all levels of government. So that would mean less revenue and deep cuts in government programs.

Well not so fast. That is unless you raise sales taxes on everything! You see government is not allowed to do with less. They just have to find another place to take it. So if you aren’t making any money, you still have to buy food. I am sure they will also raise taxes on those that have the fortune to be employed and on any company that dares have any success during the recession.

I appreciate the catch 22, they have services they have guaranteed to people and projects that they “need” to do. And we are just not giving them as much money. How dare we! But just like I have done, projects need to be put on hold, spending needs to be taken way back. So just like the rest of us 8.5% of all government spending should be dropped immediately.

The government cannot grow when the economy is shrinking, it is simple unsustainable. And the economy will adjust to compensate for the higher burden by shrinking once more. Lessons on how to turn a recession into a depression. The only way out is to shrink government spending until the economy recovers and to stimulate the economy to recover faster.

That does not mean giving money to failing companies or paying workers to do nothing or to make up new projects to fund just to keep people busy. To me stimulus means accelerating the natural recovery and failures in the current economy. The only way to do that is to take less money from the people and corporations so that they can help themselves and their corporations effect change. It is basic economics and more and more of us are working through it each day.

We will get there, I am sure; maybe not until after the new depression. It may take that much to get people to remember; government does not create, its abilities to distribute are governed by us, doing works in our best interests to move this country forward. There will be many dark days ahead but the American people, the individual, will once again have our day in the sun.

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Just when you thought it couldn’t get worse…

I think we were all coming to grips with the “Socialist” Obama. Washington is now running the banks, running the auto companies, dictating salaries and planning to move into other sectors should the need arise. Some were convinced that these actions were necessary to stabilize the economy. Others believe that the economy is a convenience to enact these policies planned from the outset. Whichever, the cause and whichever the effect, we have adjusted to the current realities and Republicans and much of the public are gearing up for a fight.

Well, it just got worse. A whole lot worse at the G20 summit. I am digging for the expect text … which of source the media can’t seem to find time to publish. But I have found this from Bloomberg.

The leaders agreed on principles for financial market regulation, including expanded controls on hedge funds and derivatives trading, and tax havens, as well as rules on compensation and bonuses. They also pledged additional financing for the International Monetary Fund and other institutions.

Didi that just say we agreed to take our draconian actions, our socializing of the US economy and blend it with the G20 and the world. Are those “on world currency” folks actually not wackos? We now have the G20; of which we were 50%+ of the GDP and 1/20 of the votes; in charge of our economic policies and executive compensation?

So the big question is what does “on principles” mean? Is it that generally we agree to work together (as we have been) to solve these issues? Well, if it said that then why say anything? We have been doing that! So saying something would seem to indicate a shift. No? A shift to a more Socialist agreement on principals (dare I say controls), is most likely the case.

It could be far worse with a G20 panel appointed to set forth controls, restrictions and fines for non-compliance to the new world order. A board consisting of predominately or completely non-US members, that combined control less then half the world’s money supply, now given the reigns to manipulate our markets to their advantage.

So what does “on principles” mean? Does anyone in the media do any investigation anymore or just regurgitate talking points? YO MEDIA…A LITTLE HELP! The text would be of huge value here. I will find it an update accordingly.

What could you do with $9,000 dollars a year for three years?

+$1.15T being injected into the Financial market. Washington has now put in $9T to “fix” the economy. This is 89,000+ per household in the US. I am trying to find the statistics but I would think we could have just paid up the mortgages on everyone at risk for far less. But like many of these plans that too would have been rewarding failure by taking from the shrinking majority that pay taxes. So what to do.

I would expect that most people do not have a mortgage over $1500 a month. I looked it up. Based on all homes the number is $927. Yeah… always forget when you live in a big city or suburb. This number is also lowered by folks that have $0 cost for housing (paid off home mortgage). There is a number for homes less than four years old ($1,371). If you remove the 112,000 of these folks that have no mortgage the average rises to $1,392. These numbers are from 2007. So a gut check of $1500 a month works.

So for a cost of 9,000 a household the US government could have covered 6 months of payments on the average house for every person in the country. For nearly 44% of homeowners this would cover 100% of their housing costs. [Because of this cost discrepancy this would actually cost less than the price tag]. Allow this exemption for 5 years at a total of 45,000 per family. That would be about $4.5T.

Wouldn’t this have stopped the rash of foreclosures? That would have stabilized the securities market at created a floor on the price of securities. This would have, in turn, stabilized the banks. It would have also [not sure I like this] allowed people to buy houses off of the open market knowing that the first 5 years of mortgage was covered. This would have stabalized housing prices. With a bit of diligence to manage the out years, this could be constrained so that it does not simply defer the problems. For those without a “mortgage crisis” [93% of all homeowners] this would have created spendable income that would likely be used to pay off debt and/or buy things [stimulus].

In summary, for half of the current cost this could have been solved. I would have been content with 3 years (or 1/3 the cost). If some are worried about non-homeowners being left out, don’t fret. I set you up. These numbers include housing costs by households, which includes renters. I checked and there are actually less households (105mill) then homeowners (123mill – owners of multiple homes). Since we don’t want to reward on both homes, we can assume it will cost even less. So for three years every household would get $9,000…. Question..wouldn’t this in effect be an “across-the-board tax cut” [ewwww… I know those are evil]. And this one would be far bigger then the Bush tax cuts. It is important to note that some suggested this (and for only 2009) and were lambasted for not having a Government-centric solution.
..and so we spend.

The economy continues to worsen and the costs to taxpayers keeps rising. Once again proof that “government experts” spend more time reading books and talking to each other about how much smarter they are then the rest of us; no time living life like the rest of us. They look at macro-economic issues and forget that those numbers are driven by the hard work of every American, every day. They all need a new line of work. One that actually produces something for the country. I believe that will help the economy. We have a chance in 2010 to help that along.

"Barack Obama is the smartest President"?

Have you heard it before? We have all heard how “dumb” George Bush is/was. I think it is about time to reveal that there is a big difference between book-smart and street-smart; Obama being the former and in no way the latter. The media being much of the former as well, has little to no respect for the latter. I guess, for the sake of honesty, I would be the reverse. I respect more what people have done and how the interact with people then I do what their grades were and where they went to school.

Obama can’t find the door.
1. Might have seen this one. Yes that is a window. Dear Sir, Please note that there are no hinges or a handle. I am sure you have seen this one (again and again). But note it has handles and hinges and is simply locked. Even when it is covered, Bush must be mentioned and bashed. Mr. Obama simply “hasn’t gotten acquainted” with his surroundings. That was not an excuse for Mr. Bush who was in CHINA. The Bush gaff was often labelled “Bush has no Exit Strategy”; including by the network news (see below). Is also became a top ten list on Letterman.

In the opening tease at 7:00am, co-host Charlie Gibson announced over video of Bush trying to open the locked doors: “No way out. President Bush tries the wrong door on his trip to Asia and has fun for the cameras. But the big question now: Does he have an exit strategy for Iraq?”

Not the same “oops, ha ha” coverage Obama got is it?

Gifts for our UK “friends”.
2. Anyone can make a silly honest mistake…but it take a special person to insult a respected ally. Have you heard about the gift exchange between President Obama and Gordon Brown (UK Prime Minister)? Probably not. This article covered it but missed one of the gifts given to our President; The framed commission from the ship that was used to make his desk. How thoughtful and personal. And from the US 25 pack of DVDs. I hope they were not Region 1 (US) encoded. I am sure their were personalized by making sure they were Region 2. Like school on the weekend… no class.

Obama the stock advisor.
3. The confidence his policies give the stock market has been pretty obvious. Maybe one of those books he reads should have include the definition of P/E Ratio (Price to Earnings). Of course, his definition may explain a lot of his policies. I am so glad we have someone so smart now running our economy. No sense in leaving it in the hands of those Bankers and Finance folks. By the way Price to Earnings only matters when there are Earnings! Otherwise, it is called speculation .. a practice that helped us all so much in the Internet boom.

More brilliance to come, I am sure.

Well played, Mr. Obama

Many is the media are “confused” by the seeming contradictions in the ever expanding spending coming from Washington and the statements about the desire to “balance the budget”. Since most of them are devoid of 5th grade math skills they can’t make the connections that most of the rest of us can make…”this just does not balance out”. But I believe that it does balance out and very quickly. I believe the President is honest is his desires to get the budget deficit cut in half by the end of his first term and that this is in no way a conflict with the current spending or his budget.

The goal is not to try and pay for this or to worry about revenue at this point. The goal is to establish government dependence and control. I believe that President Obama is playing this perfectly. He is spending out of control because the public is demanding that they “do something”. True, this spending will have little impact on stimulating the economy. It will however create entire agencies and government dependence among those that will now survive based on the bailouts. Many believe that this is overplaying their hand. I think not. This is their hand. What will happen to the public economy is obvious to almost everyone and the public outcry shows this as well. But many believe that he is misjudging the economy or the American people. I believe this is exactly the intent.

As these policies and the next budget are passed (there is little chance enough Democrats will change sides to stop it) massive spending will hit many sectors of the economy. Government funding will push out private equity. Dependence will be created. More bailouts, Healthcare takeovers, locking up the energy industry will all limit the economy and limit tax revenue. But Mr. Obama has stated he wants to balance the budget and soon. Unlike many that see this in opposition to his current spending and budget, I take him at his word. Revenues will not go up. Unemployment will not go down. But this increasing crisis is exactly what is needed for the next phase of the project.

That is the “need” to tax everyone at a very high level to balance the budget. Many look at the budget as written and say that this must occur anyway. They are correct and believe that it will therefore be stopped early on. But with a complicit media, no 5th grade math, and a struggling economy, it will pass. Once you lock out private investment, once agencies are established, once your industry, your health care and your energy are a service of the Federal Government; could you (would you) “deny” yourself those services as they are transitioned back to a free market? Not enough will, a new recession and risk will be avoided by the American voters; and under a tax load of greater than 50%; the control is established.

This level of control cannot be undertaking directly. You already see the concern building based on the individual policies today. But Obama has learned from the mistakes of socialized health care that gave us the Republican Revolution in 2000. You cannot get these changes passed in a good economy and in the light of day. He is ensuring that our dependence and need are sufficient so that we have little choice.

Well played Mr. Obama.

Is Obama a muppet or the puppet master?

Those that know me well, know that, during the election, I had the opinion that Obama was a muppet. May argued he was left wing, and that may be true. Other argues that he was more center-left. Though I believed that he was likely far more left then his words, what he said and what he believed was of little consequence in this election. Besides foreign affairs the President if mostly a figurehead. He has little to do with writing or enforcing law. In this case a figurehead for Nancy Pelosi and Harry Reid.

I hoped that I was wrong or even if I was right that he would have a mandate and the quest for power would allow him to manage congress. But like the old Star Trek episode, “Patterns Of Force” where they “instituted a theoretical form of Hitler’s National Socialism upon the lawless Ekosians because he believed that it is the most efficient system of government ever devised”, the government has taken over and supplanted the figurehead.

Obama talked about “fixing roads” and “helping the states” yet the stimulus bill is full of pork and pet projects that dwarf the valuable spending. Now we have a “funding bill” that is full over 4900+ earmarked projects. So I, I believed that I was right. That he had no power and no control over the Congressional leadership and that they he was a puppet to the puppet masters.

At least I thought I was right until Tuesday and Wednesday. He spoke the other night about restoring the upper tax brackets to those under Clinton. To cut spending in non-critical programs and cut the deficit in half in 4 years. Then the news about his plan began to release on Wednesday including 650+ Billion to begin universal healthcare. The numbers simply do not add up. Then the tax increases began to to leak; including limiting home interest deductions [that should help the housing market]. A total “estimated” budget of 3.7 trillion on tax payer funded income of 2 trillion. If the economy contracts a bit more and/or the price tag goes up (duh) then we are talking about government spending on a pace that is double revenues. This does not include the “one time” spending in the bailouts. So we are looking a deficits that would require tax revenues to double or triple in the coming years.

There is no amount of taxation on “the rich” that can cover that bill. Since over 40% of wage earners already pay zero income tax, this burden will be carried by the ever decreasing population of the employed “wealthy” [which will now be defined as anyone that makes over the median income]. The GDP of the US is estimated to be 13.75 Trillion dollars in 2008. So we are talking about taxation at 30% of all GDP (higher to cover the bailouts). To put that in perspective: taxation has never been over 20% of GDP. In fact it is well understood that tax revenue and GDP are tied tightly together at about 18.5%. [I have found reputable sources that have out tax burden at about 30% already. Based on 13.75 Trillion in GDP and 2.67 Trillion in revenue..my simple math gives me 19.4%] . So we will need to get from 2.67 Trillion to well over 4 trillion [note that none of this includes growth in already expanding government programs].

Now it is possible that we will not actually pay for this. Seems that “paying for things” is simply out of vogue right now. But either we will pay for it or our children and grandchildren will pay for it with interest.

Based in these simple facts, I have come to the unfortunate conclusion that the puppet is part of the game (that reminds me of a Twlight Zone episode). That he is using his popularity and oratory skills to say what we want to hear and then turn around and sell us out. So it looks like, some where right, he is a left wing liberal and intent on creating a socialist republic within the United States with an overall tax burden of 40+%. Either that, or his economists have failed 5th grade math and they are completely inept (since they don’t pay taxes maybe this is the lesser of two evils). 2010 is coming, I pray we will not be too late.

Jobs and Industries Democrats are trying to kill

This is meant to become a running list of all of the industries specifically targeted for destruction by the Democrat party. Many of these are obvious but the goal it to look at the ripple effects of each of these decisions and understand the impact on the unemployment picture and the economy as a whole.

Target: Big Oil
Impact: Rig Workers, Parts Manufacturers, Local Service, Gas Prices (which impacts inflation)

Target: Tobacco Companies
Impact: Employees, Farmers, Tax Revenue (all those pet programs “for the kids” supported by this revenue)

Target: Banks
Impact: Employees, New York Restaurants, Las Vegas (and other conference cities), Event planners, wait staff, cooks

Target: Private Jets
Impact: Manufacturer, Small Airports, Pilots, Service Technicians, Oil Companies, Steel Manufacturing, Parts Suppliers

Hope that you do not know anyone in any of these industries or reliant on these industries. The economy is connected, pick and choose winners and losers and the ripples are long and wide. The end results is always the same, lower employment; usually in the service sectors that support these businesses and towns, lower tax revenue and more government control of free enterprise. Make no mistake. This is either the end goal or they are incompetent. I believe they know full well what they are doing and government control of private business is the end game.