Contentment

There is an income number that many people feel will finally make them comfortable and is about twice what they are earning. If a man makes $40,000, he thinks that $80,000 will do the trick. Someone earning $100,000 sees the answer at $200,000 but they never really get there. Having more money is not the answer but what is the answer. Wealth is what you have minus what you want. This leads to two paths to wealth, either earn more or want less. The first means to work more and the second means to be content with what you have. This kind of thinking is foreign to young people because they are caught up in the idea that you can buy happiness. At some age about 90, the whole rat race things seems almost comical but that is a lesson that takes many years to learn. When you are content to stay around friends and take an occasional walk you can finally relax and enjoy your life and think why did it take me so long.

Credit friend or foe

Many Americans look with some alarm at the national debt that keeps rising year after year but many are also living the same way in their families. Spending keeps rising faster than income and the difference is financed through debt accumulation. During the 1950’s and 60’s households lived differently. They avoided debt like the plague. They learned from their parents; frugality based on the necessity that came out of the depression. While it was common to borrow money for a home, other things were purchased with cash. People paid for daily expenses with cash. Many saved a small amount each week to cover the cost of upcoming Christmas presents. Some used the lay away plan. If they wanted an item, they had the store lay it away for them to pick up at some later date after they had saved the money to pay cash for it. When the breadwinner got a raise a part of that was set aside in long term savings. No one ever lived on overtime money. People went grocery shopping with a list and bought only what was on the list. All meals were home cooked and nothing was ever wasted. Any leftovers were used the following days. Many clothes were home made and were kept longer by taking care of things. Kids took lunch to school and saved the paper bags for reuse. Making home repairs was common as was the one car family. Sometimes a dad would take a part time job on Saturday not so they could buy something but so they could pay extra on the mortgage. Vacations were one day holidays in town not two-week trips across the country. Houses were less than 1,000 sq ft even though families were larger. All of this began to change with the introduction of the credit card which was sold as a convenience but was in fact a successful marketing ploy. Today there are many people who pay 20 plus percent interest on credit cards and just keep falling further debt. They cannot resist the next latest thing and thing of it as free when you just put it on the card.

Raise taxes on the rich

As various cities around the country raise taxes on the rich, many rich people are moving to lower tax states. The way to tax the rich is by using the federal income tax system. Democrat Senator Hollen’s has introduced a bill that will increase taxes on the rich and lower taxes on lower income groups. His plan for single filer is an extra 5% on incomes above one million, 10% on incomes above 2 million and 12% on incomes above $5 million. This should be a starting point and taxes would increase further each year. The one restriction should be that the new tax collections be used to reduce the deficit not to install new programs. There could also be a condition that all new government spending cannot increase more than one-half percent below the inflation rate. If they just did the last point this will solve the deficit problem in the long run. Some steps must be taken to close the income gap which is large and continues to widen each year.

Reindustrialization

One of the major aspects of ending globalization is the bringing of manufacturing jobs back to America. The impetus for this is three-fold. First the recognition that national defense depends on having a secure source of materials. Second the cost of transportation has risen dramatically. Third production at home is close to the major markets meaning closer supply chains. The doubling of the industrial base over the next ten years will come from three areas. First the existing US companies operating in the US will expand production. Second, foreign companies currently operating in the US will expand and third foreign will invest additional funds in the US. The last group will occur in three stages. The first step will be preparing the factory sites. Second will be installation of equipment and third the hiring of workers and the purchasing of raw materials. In today’s fast paced world, companies have to be able to change directions quickly. With production close to home meaning shorter supply chains, change can be completed more efficiently. Imports needed for manufacturing will slowly decline as more products are made in the US.

NY City deficit

In 1975 NY City avoided bankruptcy by defaulting on its debt and having a state-supervised bailout to restructure its finances. Over the years the City has skirted financial problems by increasing taxes. Once again, the city is facing a $12 billion dollar deficit and is proposing new benefits of $4.5 billion for free childcare. The city, like many big cities finds itself in a death spiral. They increase taxes on the rich to pay for benefits for the poor. This causes rich people to leave and the tax burden falls heavier on those who remain and this leads to further tax increases. For many cities the money designated for the poor is distributed not directly to the people but through non-governmental agencies (NGO’s) where funds are siphoned off through various, sometimes, illegal means. NY City with a population of 8.5 million has a budget of $124.7 billion or $14,500 per person. Compare that to the state of Florida whose budget is $117.4 billion with a population of $23.7 million or $5,000 per person. In addition, Florida has a $3.8 billion surplus. While Florida is setting up plans to get rid of non-school property tax on personal residences, New York City is planning on raising property tax and a new 2% tax on those earning more than one million per year scheduled to bring in $4 billion. The new mayor Mamdani is following up on his campaign promise to tax the rich and thus the people are getting what they voted for. In 1951 a newspaper writer, Elmer Peterson, said that “democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse (money) from the public treasury”. Will NY City prove that Mr. Peterson was right?

Russia

When Putin came to power some 26 years ago, he said that the greatest catastrophe of the 20th century was the fall of the USSR and he set a goal to revive the past glory as he perceived it to be. His attempt failed and he now sees the futility of the Ukraine War and will not attempt to gain the upper hand by using tactical nuclear weapons. At age 73 and his influence waning a new group will take power. Their goal will also be to bring Russia back to its USSR position in the world but their approach will be much different. They will become part of the Western world economically and will begin to rebuild. By establishing an open society and conducting free and fair trading with Europe and the US they will revive their country. Europe can once again use cheap Russian natural gas and reverse their trend toward deindustrialization. The world will welcome the natural resources from Russia and will prosper. This means that NATO will become irrelevant and the EU will no longer depend on the US for safety from Russia.

Iran War

As the war in the Pacific was coming to a close, Japan wanted a negotiated settlement but Truman wanted unconditional surrender. The result was the dropping atomic bombs on Nagasaki and Hiroshima causing millions of casualties to civilians. By today’s standards if Truman had agreed to a settlement some in the press would have reported that the US lost the war and Japan had won. It brings up the question of how the US should end the war in Iran. Should the lives of millions of civilians be sacrificed in order to have unconditional surrender or should a negotiated settlement be agreed to. Some will say this is apples and oranges because Japan directly attacked the US at Pearle Harbor but Iran has only indirectly attacked the US while pronouncing death to American for 47 years. While Iran would likely not directly attack the US, they might well have some proxy group sneak in a nuclear bomb to some major city and then deny any connection. The question remains, are their threats to America just talk or will they carry out some type of terror plan. Is there ever a time when a preemptive strike is warranted.