Sunday, January 16, 2011
too big
Are “Muni’s” the next too big to fail product. While states cannot file for bankruptcy cities can and the way many cities finance their long term debt is by selling municipal bonds (Muni’s). As more and more cities face financial difficulties it is becoming more difficult to sell these bonds. Investors are leery. Cities can file for bankruptcy under a special provision called Chapter 9. Since many cities like most states are broke or going broke they will try to sell bonds and if the market collapses the federal government will step in and buy these bonds and thus the next bail out for too big to fail. Much of the long term debt of cities is like the states in that it revolves around legacy benefits for employees, things like pensions and health insurance for retirees. As this happens more and more non public employees are going to rebel against using tax payer money to provide these benefits. There could be a revolt especially when it becomes known that public employee benefits far exceed those of private employees.
earmarks
A few weeks ago I wrote about one of the problems associated with “ear marks”, which are add ons to a major piece of legislation in that they sometimes encourage a person to vote for a bill they really don’t like. This allows bad bills to pass. There is another reason why ear marks should be discouraged and that is the relationship between lobbyist who push for certain ear marks and then reward the congressmen who votes for them with campaign contributions. This is how the process is contaminated by special interest. You vote for my ear mark and I will give you money for your re-election. Since over 90% of incumbents are re-elected this becomes a vicious circle that is often times not in the best interest of the country.
The current Omnibus bill before the congress is 1.2 trillion and contains 6,000 ear marks totaling 8 billion dollars which is only a small part of the total bill but is equal to 1.3 million dollars per ear mark. Say Senator Smith is asked of 1.3 million dollars to provide for research into the sex life of a fly. He gets this paid as an ear mark and the people who get the money provide him with $50,000 for his next campaign.
This is legalized corruption.
The current Omnibus bill before the congress is 1.2 trillion and contains 6,000 ear marks totaling 8 billion dollars which is only a small part of the total bill but is equal to 1.3 million dollars per ear mark. Say Senator Smith is asked of 1.3 million dollars to provide for research into the sex life of a fly. He gets this paid as an ear mark and the people who get the money provide him with $50,000 for his next campaign.
This is legalized corruption.
cash
Here is another example of a news story that gives a misleading impression by leaving out pertinent information. It was announced that the four big banks that got TARP money have now repaid it all with interest. End of story. What was not reported is that the treasury in order to get cash to spend loaned these banks money at zero interest and then allowed these same banks to purchase government bonds that paid three percent interest thus giving them a risk free guaranteed profit. It is from this profit that the banks repaid the TARP loans.
Why do this? The government gives them cash and when they buy bonds they pay for those with cash and now the government has cash and the government can deny that they are just printing money which is called monetizing the debt which the government said they would not do. Another example of our government at work.
Why do this? The government gives them cash and when they buy bonds they pay for those with cash and now the government has cash and the government can deny that they are just printing money which is called monetizing the debt which the government said they would not do. Another example of our government at work.
estate
The news today is about estate tax. When I first started in the finance business the estate tax limit was set at $200,000. This meant that when you died the government totaled up everything you owned and if it came to more than $200,000 you had to pay tax which started at 35% and went as high as 55%. We would call on farmers and help them prepare for this event. For example most farmers and asset rich and cash poor, meaning they owned land and equipment that might be worth millions but the price of commodities was so low that they barely made enough to get by. When they died the estate tax was due in 9 months so part of the farm had to be sold to pay the tax. Now a farm is a unit with equipment sized to the acreage and when part of it is sold it disrupts the whole operation. Many times this resulted in the farm being sold to some large corporate farm and as time passed we had fewer and fewer small farmers and that trend continues to this day.
About 30 years ago they raised the tax limit from $200,000 to $600,000 and that helped a lot and then it went to $2,000,000 and the Bush tax cuts of 2001 removed the estate tax completely until this January one when the new bill suggest $5,000,000 for individuals and $10,000,000 limit for couples and at tax rate of 35%.
This is the kind of bill that will protect most small farmers and most very rich people have professional estate planners who limit their tax. For those who have that much money and still don’t plan, I say let them pay
About 30 years ago they raised the tax limit from $200,000 to $600,000 and that helped a lot and then it went to $2,000,000 and the Bush tax cuts of 2001 removed the estate tax completely until this January one when the new bill suggest $5,000,000 for individuals and $10,000,000 limit for couples and at tax rate of 35%.
This is the kind of bill that will protect most small farmers and most very rich people have professional estate planners who limit their tax. For those who have that much money and still don’t plan, I say let them pay
court case
The big news this week is that the Virginia court struck down Obama care based on the commerce clause of the constitution. This clause gives the federal government the right to regulate interstate commerce. Commerce by definition means having a buyer and a seller and interstate means that these two are in different states. An Iowa corn farmer sells his corn to an elevator in Illinois. The challenge in this case is that there is no buyer and the government is stepping in and forcing a person to buy and for this reason the Supreme Court is likely to agree with the Virginia lower court. That however is only the first challenge. The second part has to do with enforcement. The Obama care law says that you must buy health insurance and if you don’t you can be fined $750. However the law further states that if you refuse to pay the fine then there is nothing else the government can do. The reason this is important is that the law has removed the pre-existing conditions clause, which means anyone with any kind of health problem can buy insurance with no questions asked. If this is the case then people will not buy health insurance until they get sick which will destroy the Obama care idea of insuring everyone. Cost sharing is based on the idea that everyone sign up and pay premiums when they are healthy.
This currently happens with Medicaid as many people who are eligible do not sign up until they are sick since there is no pre-existing condition clause in Medicaid.
The way around this is too change Obama care to include stiff penalties for those who choose not to purchase health insurance, however this is some concern that it is not constitutional to penalize someone for not buying a product thus the reason for the lack of enforcement in the plan.
Does all this sound like a federal government plan!
This currently happens with Medicaid as many people who are eligible do not sign up until they are sick since there is no pre-existing condition clause in Medicaid.
The way around this is too change Obama care to include stiff penalties for those who choose not to purchase health insurance, however this is some concern that it is not constitutional to penalize someone for not buying a product thus the reason for the lack of enforcement in the plan.
Does all this sound like a federal government plan!
work
Dick Morris reports that since Fox News is now the station of record for things political they plan to conduct debates with the Republican candidates for president on a regular basis starting next years. This will give lots of exposure to these candidates and more importantly it will allow the voters to decide if these people are qualified to be president.
I find this particularly interesting because most people have concerns about Sarah Palin in regards to her understanding of the major issues. If she has been doing her home work and is able to answer questions with knowledge based answers she can turn around the view that many if not most people currently have of her.
Since many of the talking heads consider her to be some kind of dunce the bar is set low and she could easily surprise her critics and rise to the top of the group. If she has not done her homework she will quickly been seen as a loser.
The really interesting part is that most people can learn about the issues but most cannot be taught charisma which is her strong point.
If she proves that she is in charge of the major issues she will be hard to stop and with her way with people she would present a formidable challenge to Obama in any debate format especially since teleprompters would not be allowed.
I find this particularly interesting because most people have concerns about Sarah Palin in regards to her understanding of the major issues. If she has been doing her home work and is able to answer questions with knowledge based answers she can turn around the view that many if not most people currently have of her.
Since many of the talking heads consider her to be some kind of dunce the bar is set low and she could easily surprise her critics and rise to the top of the group. If she has not done her homework she will quickly been seen as a loser.
The really interesting part is that most people can learn about the issues but most cannot be taught charisma which is her strong point.
If she proves that she is in charge of the major issues she will be hard to stop and with her way with people she would present a formidable challenge to Obama in any debate format especially since teleprompters would not be allowed.
Palin
Dick Morris reports that since Fox News is now the station of record for things political they plan to conduct debates with the Republican candidates for president on a regular basis starting next years. This will give lots of exposure to these candidates and more importantly it will allow the voters to decide if these people are qualified to be president.
I find this particularly interesting because most people have concerns about Sarah Palin in regards to her understanding of the major issues. If she has been doing her home work and is able to answer questions with knowledge based answers she can turn around the view that many if not most people currently have of her.
Since many of the talking heads consider her to be some kind of dunce the bar is set low and she could easily surprise her critics and rise to the top of the group. If she has not done her homework she will quickly been seen as a loser.
The really interesting part is that most people can learn about the issues but most cannot be taught charisma which is her strong point.
If she proves that she is in charge of the major issues she will be hard to stop and with her way with people she would present a formidable challenge to Obama in any debate format especially since teleprompters would not be allowed.
I find this particularly interesting because most people have concerns about Sarah Palin in regards to her understanding of the major issues. If she has been doing her home work and is able to answer questions with knowledge based answers she can turn around the view that many if not most people currently have of her.
Since many of the talking heads consider her to be some kind of dunce the bar is set low and she could easily surprise her critics and rise to the top of the group. If she has not done her homework she will quickly been seen as a loser.
The really interesting part is that most people can learn about the issues but most cannot be taught charisma which is her strong point.
If she proves that she is in charge of the major issues she will be hard to stop and with her way with people she would present a formidable challenge to Obama in any debate format especially since teleprompters would not be allowed.
start
The hot news item of the day is the “START” treaty which is designed to reduce the number of nukes that the US and Russia can have and most people see this as a good thing since both sides have enough to obliterate the other side many times over. All these excess nukes increase the probability that one or more could disappear which offers the second reason to eliminate some. So why are some Republican senators opposed to this treaty? In 2001 Bush withdrew from the ABM treaty which the allowed the US to further develop an anti ballistic system, the concept that Reagan proposed and was ridiculed as “Star Wars”. Since that time technology has advanced to the point where the US has used such missiles to shoot down incoming rockets but the US is the only country to have such know how and the US is improving the reliability of such systems.
Recently it was brought to the attention of some senators that The Obama state department people have been negotiating in private with Russia and some suspect that they have agreed to some kind of limitation on the US’s ability to continue the development of the anti ballistic system and these senators want us to have the ability to knock down incoming missiles. These senators have asked the state department for copies of the private meetings and they have been refused. In the past when treaties were negotiated in this manner the secret papers were handed over to the senators. Thus the senators refuse to approve the treaty until such time that they are assured that we have not given up our right to continue to develop anti ballistic missiles.
This can be very important since in the future other countries like North Korea will have long range missiles and nuke warheads and our only defense against an attack would be an anti ballistic missile.
Recently it was brought to the attention of some senators that The Obama state department people have been negotiating in private with Russia and some suspect that they have agreed to some kind of limitation on the US’s ability to continue the development of the anti ballistic system and these senators want us to have the ability to knock down incoming missiles. These senators have asked the state department for copies of the private meetings and they have been refused. In the past when treaties were negotiated in this manner the secret papers were handed over to the senators. Thus the senators refuse to approve the treaty until such time that they are assured that we have not given up our right to continue to develop anti ballistic missiles.
This can be very important since in the future other countries like North Korea will have long range missiles and nuke warheads and our only defense against an attack would be an anti ballistic missile.
November
This is something that I wrote some years back that I like to re-read this time of year
A NOVEMBER MORNING WALK
A November morning walk is a special event. The gray clouds hang low on the horizon. The North wind, now filled with the first chilling reminder of winter, pushes the Autumn leaves across the pavement, rolling and crackling on their way to winter graves. The trees, that only last week, were bright with red and gold, now stand partially disrobed and dull brown against the morning sky. The heated activity of the past summer has subsided, and the time for regrouping is at hand.
I look inward, and wrap myself up in the warm blanket of my feelings, as I prepare to hibernate with thoughts of peace and contentment. It is my time for preventive maintenance, and proper care of the soul. When I was in the first half of life, I had not time for such foolish behavior. I did not realize the joy of resting quietly in the forest, for I was busy rubbing the sticks of ambition and materialism together, to start the fires of progress that would set the forest ablaze. As I look back upon the charred remains of all this activity, I am thankful that I didn’t burn myself out.
I will cherish each day of this seemingly forgotten month, as I build up my enthusiasm for giving and forgiving in the coming year, and then as the month comes to an end, it is appropriate that it burst open with a great thanksgiving for the past year. Now is the time when I will check my moral foundation, and my spiritual working parts, so that I am properly prepared to face the challenges that lie ahead. With all things in good working order I will best be able to share my gifts with others, and experience the truth, joy and love that is my destiny.
Today’s reminder:
Lean on me, when you’re not strong
And I’ll be your friend
I’ll help you carry on
For it won’t be long
Till I’m gonna need
Somebody to lean on
Lyrics from the song,”Lean On Me” by Bill Withers
A NOVEMBER MORNING WALK
A November morning walk is a special event. The gray clouds hang low on the horizon. The North wind, now filled with the first chilling reminder of winter, pushes the Autumn leaves across the pavement, rolling and crackling on their way to winter graves. The trees, that only last week, were bright with red and gold, now stand partially disrobed and dull brown against the morning sky. The heated activity of the past summer has subsided, and the time for regrouping is at hand.
I look inward, and wrap myself up in the warm blanket of my feelings, as I prepare to hibernate with thoughts of peace and contentment. It is my time for preventive maintenance, and proper care of the soul. When I was in the first half of life, I had not time for such foolish behavior. I did not realize the joy of resting quietly in the forest, for I was busy rubbing the sticks of ambition and materialism together, to start the fires of progress that would set the forest ablaze. As I look back upon the charred remains of all this activity, I am thankful that I didn’t burn myself out.
I will cherish each day of this seemingly forgotten month, as I build up my enthusiasm for giving and forgiving in the coming year, and then as the month comes to an end, it is appropriate that it burst open with a great thanksgiving for the past year. Now is the time when I will check my moral foundation, and my spiritual working parts, so that I am properly prepared to face the challenges that lie ahead. With all things in good working order I will best be able to share my gifts with others, and experience the truth, joy and love that is my destiny.
Today’s reminder:
Lean on me, when you’re not strong
And I’ll be your friend
I’ll help you carry on
For it won’t be long
Till I’m gonna need
Somebody to lean on
Lyrics from the song,”Lean On Me” by Bill Withers
earmarks
This past week the big talk in Washington has centered around “ear marks”. These are small appropriations attached to larger bills that bring home the bacon. For example the spending for military bill might be before congress and most want it to pass so some congressman will attach an amendment to the bill asking for $10 million for a local airport. This is an earmark and as a part of the total budget earmarks are chump change but they can persuade a congressman to vote for a large bill that he may otherwise not vote for and thus this represents the real problem with earmarks.
inflation
Something unheard of happened this week in the world of finance. The government sold ten billion dollars in bonds with a negative interest rate. Who would buy such things can be best understood by first explaining what are called “Treasury inflation protected securities” or TIPS. These bonds first started in 1997 have interest rates pegged to the consumer price index (CPI). If the CPI goes up, the interest these bonds goes up correspondingly. People who believe that high inflation is on the way will purchase these bonds as a hedge against inflation. Experts say that if these bonds were not available the price of gold would be over $3,000 per ounce instead of the current price of $1,300. People who purchased TIPS would otherwise buy gold.
The sale this week was for 10 B in ten year TIPS with a negative rate if .55% percent. In other word you had to put up $1,000 to guarantee that in ten years you would get back $995. Why do this? Assume that inflation goes up 5% per year each year over the next ten years and you will collect $50 per year and at the end of ten years get $995 back. The higher inflation the greater the return. Anyone who bought these bonds expects inflation. Who is the biggest buyer? China. They know that the US plans to pay off it’s debt using inflated dollars so they are covering by buying TIPS.
I see this as an early warning signal that inflation is coming back in a big way. This will bring back the value of fallen real estate, people will be getting a big raise each year and the government will be reducing its debt. Most like inflation when it starts but as time passes all the gains are wiped out with high prices.
The sale this week was for 10 B in ten year TIPS with a negative rate if .55% percent. In other word you had to put up $1,000 to guarantee that in ten years you would get back $995. Why do this? Assume that inflation goes up 5% per year each year over the next ten years and you will collect $50 per year and at the end of ten years get $995 back. The higher inflation the greater the return. Anyone who bought these bonds expects inflation. Who is the biggest buyer? China. They know that the US plans to pay off it’s debt using inflated dollars so they are covering by buying TIPS.
I see this as an early warning signal that inflation is coming back in a big way. This will bring back the value of fallen real estate, people will be getting a big raise each year and the government will be reducing its debt. Most like inflation when it starts but as time passes all the gains are wiped out with high prices.
getting older
There is a popular ad on TV for a product called “Progene”. The claim is that this product replaces testosterone that men lose as they age. They speak of the benefits of remaining young, strong and energetic but they have very little understanding of what it means to grow up.
Have you ever wondered why a group of 40 or 50 year old men standing around the water cooler suddenly become like Junior High boys in the locker room when an attractive young women walks by. This, my friend, is the downside to testosterone. One of the reasons that you often hear men in their 70’s say they don’t want to be young again is not because they don’t want to have more energy but because they don’t want to be burdened with the disruptive effect of excess testosterone.
When your brain is submerged in testosterone it makes it difficult to relate to others on a very personal basis. The pressure to be right is more important than developing a relationship. The pressure to compete is more important than cooperating. Thinking is more important than feeling. Making money is more important than making friends. Family takes a back seat to work.
It is only in a mans later years that he begins to see the world with a clear vision, a vision not affected by hormones, a vision that enables him to see into the hearts of others and encourages in him a desire to share his talent and experience in ways that can be helpful to others. He has learned that true happiness comes from reaching out to help and he looks for opportunities to do just that.
No I don’t want any Progene, even though it might get rid of my morning aches and pains. The price is too high.
Have you ever wondered why a group of 40 or 50 year old men standing around the water cooler suddenly become like Junior High boys in the locker room when an attractive young women walks by. This, my friend, is the downside to testosterone. One of the reasons that you often hear men in their 70’s say they don’t want to be young again is not because they don’t want to have more energy but because they don’t want to be burdened with the disruptive effect of excess testosterone.
When your brain is submerged in testosterone it makes it difficult to relate to others on a very personal basis. The pressure to be right is more important than developing a relationship. The pressure to compete is more important than cooperating. Thinking is more important than feeling. Making money is more important than making friends. Family takes a back seat to work.
It is only in a mans later years that he begins to see the world with a clear vision, a vision not affected by hormones, a vision that enables him to see into the hearts of others and encourages in him a desire to share his talent and experience in ways that can be helpful to others. He has learned that true happiness comes from reaching out to help and he looks for opportunities to do just that.
No I don’t want any Progene, even though it might get rid of my morning aches and pains. The price is too high.
more corruption
Here is another example of how corruption is open for all to see.
Franklin Raines was born into a working class family and through hard work and scholarships graduated from Harvard Law School and went on as a Rhodes Scholar.
Starting in 1969 he started working behind the scenes for various political figures from both parties. In between his government jobs he worked for the law firm of Lazard Freres which is a subsidiary of the world wide investment banking firm of Lazard LTD.
In 1991 he became vice chairman of Fannie Mae and left that post to become Director of Office of Management and Budget in the Clinton Administration where he worked for two years and then became director of Fannie Mae in 1999.
Up to this point it is an admirable career of the little guy makes good.
Recall it was during the Clinton years where the call went out to encourage more people to reach the American dream of home ownership. Clinton told his manager of HUD to use “creative financing” to increase home ownership and thus sent us down the path of no down payment, no documentation, interest only, negative amortization loans which culminated in today’s mess where millions of people who should never had a home loan and now losing their homes.
The large increase in home loans thus created by these new programs allowed Fannie Mae, the largest home finance company, to grow at a rapid rate. As they grew the payment for the Director, Mr. Raines grew proportionally.
While these bonuses meant millions for Mr. Raines it was apparently not enough so he adjusted the books to move money from one year to the next to increase the bonus many times over and for this maneuver he received $90 million in bonus money by overstating earnings by 6.3 billion dollars.
Civil charges were filed against Raines and he had to pay a fine of 3 million which by the way was paid by the Fannie Mae insurance company, plus donate 1.3 million in stock and give up another 5 million in benefits.
Here is a follow up posted in April of 2008.
WASHINGTON — Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal.
Raines, former Fannie chief financial officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.
Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million,
If you do the math you see he came out about 60 million ahead and no criminal charges were ever filed.
As you watch the news each day and see the number of poor working stiffs who are losing their home you can comfort yourself with the knowledge that Mr. Raines is living on easy street.
Franklin Raines was born into a working class family and through hard work and scholarships graduated from Harvard Law School and went on as a Rhodes Scholar.
Starting in 1969 he started working behind the scenes for various political figures from both parties. In between his government jobs he worked for the law firm of Lazard Freres which is a subsidiary of the world wide investment banking firm of Lazard LTD.
In 1991 he became vice chairman of Fannie Mae and left that post to become Director of Office of Management and Budget in the Clinton Administration where he worked for two years and then became director of Fannie Mae in 1999.
Up to this point it is an admirable career of the little guy makes good.
Recall it was during the Clinton years where the call went out to encourage more people to reach the American dream of home ownership. Clinton told his manager of HUD to use “creative financing” to increase home ownership and thus sent us down the path of no down payment, no documentation, interest only, negative amortization loans which culminated in today’s mess where millions of people who should never had a home loan and now losing their homes.
The large increase in home loans thus created by these new programs allowed Fannie Mae, the largest home finance company, to grow at a rapid rate. As they grew the payment for the Director, Mr. Raines grew proportionally.
While these bonuses meant millions for Mr. Raines it was apparently not enough so he adjusted the books to move money from one year to the next to increase the bonus many times over and for this maneuver he received $90 million in bonus money by overstating earnings by 6.3 billion dollars.
Civil charges were filed against Raines and he had to pay a fine of 3 million which by the way was paid by the Fannie Mae insurance company, plus donate 1.3 million in stock and give up another 5 million in benefits.
Here is a follow up posted in April of 2008.
WASHINGTON — Former Fannie Mae chief Franklin Raines and two other top executives have agreed to a $31.4 million settlement with the government announced today over their roles in a 2004 accounting scandal.
Raines, former Fannie chief financial officer Timothy Howard and former controller Leanne Spencer were accused in a civil lawsuit in December 2006 with manipulating earnings over a six-year period at the company, the largest U.S. financer and guarantor of home mortgages.
Raines, a Seattle native and prominent Washington figure who was President Clinton's budget director, is relinquishing company stock options, proceeds from stock sales and other benefits. His part of the settlement is worth $24.7 million,
If you do the math you see he came out about 60 million ahead and no criminal charges were ever filed.
As you watch the news each day and see the number of poor working stiffs who are losing their home you can comfort yourself with the knowledge that Mr. Raines is living on easy street.
song
I had mentioned that I attended the Glenn Beck 8-28 gathering in Washington DC and it was a very patriotic group and recently as I thought more about it I was reminded of a Sinatra song from back in the late 40’s and I thought you might like to hear it. I am sure my daughter has never heard this before.
http://www.youtube.com/watch?v=k8TThWTeFsY&feature=related
http://www.youtube.com/watch?v=k8TThWTeFsY&feature=related
corruption
We have all witnessed government corruption in some way during our lifetime and one of the big complaints that outsiders have against government is the corruption. The thing that amazes me about it is the way it is openly displayed. I am not picking on Rahm Emanuel but he has been in the news and I will use him as an example.
He was just an ordinary citizen of modest means and he decided to help out on some political campaigns in Illinois, his home state. He first worked on Senator Paul Simons campaign and this got him a position on the Clinton campaign.
In 1998 he resigned from the Clinton administration and took a job as a banker with the firm Dresdner-Kleinwort. He has a B.A. in liberal arts and Masters in speech. He had never worked in a bank and certainly his education was not in banking.
He became managing director of the firms Chicago office in 1999 and in the next two and one-half years he made 16 million dollars as a banker.
He resigned from that job and Clinton named him to the Board of Directors of the Freddie Mac and on this job he had no specific assignment but attended board meeting at 6 times per year and his salary for this was $320,000 per year. It was estimated that these meetings lasted two hours so his pay was $26,000 per hour.
During his time on the board Freddie Mac was plagued with scandals.
You would think that this type of activity would be secret so as not to arouse suspicion that something might be remiss, but not so. Corruption has become so rampant that the corruptors no longer have to hide it.
Now you know why people are finally getting fed up and this coming election will bring some new faces to Washington. Whether this means that things will change is yet to be decided.
He was just an ordinary citizen of modest means and he decided to help out on some political campaigns in Illinois, his home state. He first worked on Senator Paul Simons campaign and this got him a position on the Clinton campaign.
In 1998 he resigned from the Clinton administration and took a job as a banker with the firm Dresdner-Kleinwort. He has a B.A. in liberal arts and Masters in speech. He had never worked in a bank and certainly his education was not in banking.
He became managing director of the firms Chicago office in 1999 and in the next two and one-half years he made 16 million dollars as a banker.
He resigned from that job and Clinton named him to the Board of Directors of the Freddie Mac and on this job he had no specific assignment but attended board meeting at 6 times per year and his salary for this was $320,000 per year. It was estimated that these meetings lasted two hours so his pay was $26,000 per hour.
During his time on the board Freddie Mac was plagued with scandals.
You would think that this type of activity would be secret so as not to arouse suspicion that something might be remiss, but not so. Corruption has become so rampant that the corruptors no longer have to hide it.
Now you know why people are finally getting fed up and this coming election will bring some new faces to Washington. Whether this means that things will change is yet to be decided.
districts
It seems that all the talk about the elections is centered around the house and senate but I think they are missing the point. The governorships are where the real power lies because this is the year of redistricting. The state legislators have the responsibility for redistricting but the governor has to approve. The way the people in power use the jerrymandering of district lines gives them an advantage for the next ten years.
This kind of reminds me of how often in presidential races the possible appointment of Supreme Court judges sometimes takes a back seat to policy differences.
This kind of reminds me of how often in presidential races the possible appointment of Supreme Court judges sometimes takes a back seat to policy differences.
my politics
Someone asked me the other day about my personal politics and I recently sent a letter to an old friend of my with whom I often disagree but I think it explains where I am coming from and perhaps where I stand today. Here is a copy.
Thursday, September 16, 2010
Hi, Lloyd and Ramona,
It occurred to me while we were talking, why we always seem to be at odds when it comes to politics and that always surprised me since I consider myself a moderate. You once told me that you vote for the party and not the man because you believe in the principals laid down in the party platform and while things may change depending on the candidate the principals would remain. This is a solid argument and can be helpful in understanding why a person may vote the party line.
There have been a number of famous politicians who have made the statement, “I didn’t leave the party, the party left me”. If you believe these people then the party principals are not carved in stone and do change over time.
Take President Kennedy for one example. Here are a couple of quotes from him to illustrate my point.
Upon assuming the Presidency, JFK's Inaugural Address was as hawkish as one could ever get. "Let every nation know, whether it wishes us well or ill, that we will pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and the success of liberty."
Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government."
One could imagine Ronald Reagan saying things like this.
I have been a careful observer of things political since my first vote for Stevenson against Ike in 1956 and over the years I have voted for four Republicans, four Democrats and two Independents. I am what people call a fiscal conservative and a social liberal. I understand that government takes money from one group of people and after taking a cut for operating expenses, spends the rest on other people. Government takes from the rich and gives to the poor, takes from the poor and gives to the rich and just about every combination in between. The basic difference between Rep and Dem is from whom they are taking and to whom they are giving.
I feel that this giving and taking is necessary at times but not so at other times. When Clinton said welfare should be a helping hand and not a way of life he got my vote. It is just like raising children in that you can do too much for them or too little. In just about every case of government giving there are what I call the unexpected consequence of good intentions and often times the results are tragic and in most cases the programs are fraught with waste and fraud. The problem has gotten worse over the years because the country has grown and by necessity the government has grown. We often see examples of how the government is just too big to properly react when needed and one of the most recent events was Katrina.
One of the main reasons the federal government seems so inept is that politics gets in the way and by that I mean that elected officials are more interested in the party than they are in the country and this attitude carries over to the electorate. I personally know people who were hoping that the war would go really bad in Iraq and I know people today who are hoping the economy will tank.
This is what we have come to and when I ask myself why this has happened, I come to the conclusion that the elected officials have discovered that as long as they can keep us fighting with each other, it allows them certain latitude to keep control and the best example of this is what I call the teen age defense. When someone screws up the first thing they do is to point out how the other party did the same thing but only worse.
On another subject I sent an email to Ramona and will follow up with some family pictures when she confirms that she got my email.
I hadn’t seen you for some years and you look just the same. You must be enjoying your life. I enjoyed our visit and next time I will call ahead.
John Novick
Thursday, September 16, 2010
Hi, Lloyd and Ramona,
It occurred to me while we were talking, why we always seem to be at odds when it comes to politics and that always surprised me since I consider myself a moderate. You once told me that you vote for the party and not the man because you believe in the principals laid down in the party platform and while things may change depending on the candidate the principals would remain. This is a solid argument and can be helpful in understanding why a person may vote the party line.
There have been a number of famous politicians who have made the statement, “I didn’t leave the party, the party left me”. If you believe these people then the party principals are not carved in stone and do change over time.
Take President Kennedy for one example. Here are a couple of quotes from him to illustrate my point.
Upon assuming the Presidency, JFK's Inaugural Address was as hawkish as one could ever get. "Let every nation know, whether it wishes us well or ill, that we will pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and the success of liberty."
Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government."
One could imagine Ronald Reagan saying things like this.
I have been a careful observer of things political since my first vote for Stevenson against Ike in 1956 and over the years I have voted for four Republicans, four Democrats and two Independents. I am what people call a fiscal conservative and a social liberal. I understand that government takes money from one group of people and after taking a cut for operating expenses, spends the rest on other people. Government takes from the rich and gives to the poor, takes from the poor and gives to the rich and just about every combination in between. The basic difference between Rep and Dem is from whom they are taking and to whom they are giving.
I feel that this giving and taking is necessary at times but not so at other times. When Clinton said welfare should be a helping hand and not a way of life he got my vote. It is just like raising children in that you can do too much for them or too little. In just about every case of government giving there are what I call the unexpected consequence of good intentions and often times the results are tragic and in most cases the programs are fraught with waste and fraud. The problem has gotten worse over the years because the country has grown and by necessity the government has grown. We often see examples of how the government is just too big to properly react when needed and one of the most recent events was Katrina.
One of the main reasons the federal government seems so inept is that politics gets in the way and by that I mean that elected officials are more interested in the party than they are in the country and this attitude carries over to the electorate. I personally know people who were hoping that the war would go really bad in Iraq and I know people today who are hoping the economy will tank.
This is what we have come to and when I ask myself why this has happened, I come to the conclusion that the elected officials have discovered that as long as they can keep us fighting with each other, it allows them certain latitude to keep control and the best example of this is what I call the teen age defense. When someone screws up the first thing they do is to point out how the other party did the same thing but only worse.
On another subject I sent an email to Ramona and will follow up with some family pictures when she confirms that she got my email.
I hadn’t seen you for some years and you look just the same. You must be enjoying your life. I enjoyed our visit and next time I will call ahead.
John Novick
spread income
There is a lot of talk among liberals about the redistribution of wealth but in fact they mean the redistribution of income. They will work on assets later.
Income in this country is about $12 trillion and the top 1% get 35% of that while the next 20% get 50% and the remaining 80% gets 15%. This breaks down as follows:
Top 1% 4.2 trillion = $1,400,000 per person
Next 19% 6 trillion = $105,000 per person
Bottom 80% 1.8 trillion. = $7,500 per person
Let us take 90% of the top group and share that with the bottom group which results in the top group getting $140,000 per person and the bottom group getting $23,000 per person.
Still not good enough?
Lets take 95% of the top groups money. This brings the top group down to $70,000 per person and raises the bottom group up to $24,000.
Not good enough…lets take half of the middle groups money and give that to the lower group. This brings the middle group down to $52,000 and brings the bottom group up to $37,000
Now the figures for the three groups are
Top $70,000, Middle $52,000 and Bottom $37,000.
Now increasing these incomes four fold to represent a family of four we have Top $280,000, Middle $208,000 and Bottom $148,000. That seems like an equitable income distribution. The question is who is going to hire you.
Income in this country is about $12 trillion and the top 1% get 35% of that while the next 20% get 50% and the remaining 80% gets 15%. This breaks down as follows:
Top 1% 4.2 trillion = $1,400,000 per person
Next 19% 6 trillion = $105,000 per person
Bottom 80% 1.8 trillion. = $7,500 per person
Let us take 90% of the top group and share that with the bottom group which results in the top group getting $140,000 per person and the bottom group getting $23,000 per person.
Still not good enough?
Lets take 95% of the top groups money. This brings the top group down to $70,000 per person and raises the bottom group up to $24,000.
Not good enough…lets take half of the middle groups money and give that to the lower group. This brings the middle group down to $52,000 and brings the bottom group up to $37,000
Now the figures for the three groups are
Top $70,000, Middle $52,000 and Bottom $37,000.
Now increasing these incomes four fold to represent a family of four we have Top $280,000, Middle $208,000 and Bottom $148,000. That seems like an equitable income distribution. The question is who is going to hire you.
your money
The big question this week, is what can Obama do between now and the election, to turn things around and while watching Thomas Friedman on ABC today the answer was presented. I thought it significant since it lays out the basic differences between liberals and conservatives. Liberals believe that government is the solution and conservatives see private business as the answer. Friedman in a classic example of double speak said if we just lower taxes that will run up the deficit so we should add more stimulus. It apparently never occurred to him that would also run up the deficit and no one on the panel brought that to his attention. The question that must be asked is it better for the government to spend your money with more stimulus or is it better if you spend your own money through lower taxes.
pensions x
This is from an essay I wrote several months back
The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return.
Here is a quote from yesterdays news
The SEC's civil case, for which New Jersey paid no monetary penalties, concerned $26 billion of municipal bonds sold by the state between 2001 and 2007. It charged the Garden State with tricking investors into believing it was adequately funding the two largest funds in the $66.9 billion New Jersey retirement system.
Among other things, the SEC said, the state didn't disclose in bond sale documents that it had abandoned a five-year plan to fund the pension plans, the $34 billion Teachers' Pension and Annuity Fund and the $28 billion Public Employees' Retirement System.
I wonder when the SEC will get around to New York, Illinois, and California and then work there way through the rest of the states and then to Municipalities over the land
The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return.
Here is a quote from yesterdays news
The SEC's civil case, for which New Jersey paid no monetary penalties, concerned $26 billion of municipal bonds sold by the state between 2001 and 2007. It charged the Garden State with tricking investors into believing it was adequately funding the two largest funds in the $66.9 billion New Jersey retirement system.
Among other things, the SEC said, the state didn't disclose in bond sale documents that it had abandoned a five-year plan to fund the pension plans, the $34 billion Teachers' Pension and Annuity Fund and the $28 billion Public Employees' Retirement System.
I wonder when the SEC will get around to New York, Illinois, and California and then work there way through the rest of the states and then to Municipalities over the land
Blago
The Blago verdict is in and he is not-guilty on all charges except lying to the FBI. The irony is that what he lied about doing was not even illegal but non the less he will get off with a slap on the wrist.
The interesting thing to me was that all of the tapes of Blago on the phone were played for the jury but the tapes of his interviews with the FBI were not played. I am wondering what was on those tapes as the first time I heard that they would not be played was several months ago and my first thought was that there were things on there that might implicate some higher ups. Then I heard that the prosecution did not present a strong case and this further heightened my curiosity about the case. Then there was Blago’s confident attitude and insisting that he was going to testify and at the last minute deciding not to take the stand. As I add all of this up I came to the conclusion that he was told that if he kept his mouth shut he would get off. We will find out when they interview the jury how many jurors voted not guilty and if there was only one my suspicious mind would lead me to believe that this person might have been a plant.
One final thing that while the FBI tapes are kept quiet the tapes of CIA interviewing terrorist were to be made public which confirms my idea that there is something very damaging on those tapes and I don’t mean damaging to Blago.
We will see how this plays out.
The interesting thing to me was that all of the tapes of Blago on the phone were played for the jury but the tapes of his interviews with the FBI were not played. I am wondering what was on those tapes as the first time I heard that they would not be played was several months ago and my first thought was that there were things on there that might implicate some higher ups. Then I heard that the prosecution did not present a strong case and this further heightened my curiosity about the case. Then there was Blago’s confident attitude and insisting that he was going to testify and at the last minute deciding not to take the stand. As I add all of this up I came to the conclusion that he was told that if he kept his mouth shut he would get off. We will find out when they interview the jury how many jurors voted not guilty and if there was only one my suspicious mind would lead me to believe that this person might have been a plant.
One final thing that while the FBI tapes are kept quiet the tapes of CIA interviewing terrorist were to be made public which confirms my idea that there is something very damaging on those tapes and I don’t mean damaging to Blago.
We will see how this plays out.
loans
The president came out with a program to help save the homes of people in financial trouble but the banks did not promote it. The plan is called Mortgage Modification Program. It was designed to help people whose payments were more than they could afford by modifying the loan to reduce payments.
When you take out a mortgage it is called the first mortgage and these mortgages are often sold to pension companies as investments. When you take out a second mortgage the bank normally retains possession of these. Now if you get in trouble the second mortgage is subservient to the first so if the bank has to forgive part of your loan it will be the second and thus a direct loss to the bank. It is not surprising that the banks were uncomfortable with this program and thus only a small number of home owners were helped. Here is a quote from the Financial Times of London.
The resistance of many banks to modify loans never made any sense to me, since a home sold at aforeclosure auction often sells for much, much less money than it bring through a conventional sale. Also, a significant number of foreclosed homes are damaged once their owners are forced out, which only drags the value down further since it's hard to sell a home that's covered in spray paint with broken windows. Banks should be highly motivated to avoid having to seize and auction properties.
But it turns out banks have another motive. Many of the banks that service home loans also have made second mortgages to these properties, as the FT points out. A second mortgage is subservient to the first mortgage, so the first mortgage is supposed to be paid first.
That means if the terms of the primary loan are changed, the secondary loan could be wiped out. Some secondary mortgage lenders are fighting to share the losses with the primary lender, according to the FT
Just one more example of the unexpected consequences of good intentions. Seems our government never learns.
When you take out a mortgage it is called the first mortgage and these mortgages are often sold to pension companies as investments. When you take out a second mortgage the bank normally retains possession of these. Now if you get in trouble the second mortgage is subservient to the first so if the bank has to forgive part of your loan it will be the second and thus a direct loss to the bank. It is not surprising that the banks were uncomfortable with this program and thus only a small number of home owners were helped. Here is a quote from the Financial Times of London.
The resistance of many banks to modify loans never made any sense to me, since a home sold at aforeclosure auction often sells for much, much less money than it bring through a conventional sale. Also, a significant number of foreclosed homes are damaged once their owners are forced out, which only drags the value down further since it's hard to sell a home that's covered in spray paint with broken windows. Banks should be highly motivated to avoid having to seize and auction properties.
But it turns out banks have another motive. Many of the banks that service home loans also have made second mortgages to these properties, as the FT points out. A second mortgage is subservient to the first mortgage, so the first mortgage is supposed to be paid first.
That means if the terms of the primary loan are changed, the secondary loan could be wiped out. Some secondary mortgage lenders are fighting to share the losses with the primary lender, according to the FT
Just one more example of the unexpected consequences of good intentions. Seems our government never learns.
ss
When the presidents committee on how to solve the debt problem makes their report in December one of the problems that will be discussed in social security but it will be used by both sides to scare people. One of the many things wrong with out present system is how it discriminates against certain groups and here is just one example.
THE CASE FOR PRIVATIZING SOCIAL SECURITY
Social security takes in about $800 billion per year. It can be privatized over a 20 year period at 5% per year at a cost of $16B the first year and rises each year after. Currently we pay 6.2% of our wages into social security and our employer matches that amount. Social security has three parts. First, the retirement fund, second survivor benefits and third benefits for the disabled. 2.2% must remain as is to cover the survivors and disabled but the remaining 4% can be transferred to private accounts over the 20 year time period.
A person who averaged $30,000 per year in salary over the past 45 years would have contributed 4 percent into his social security account and his employer would have added another similar amount. If they had earned 3% interest they would have about $225,000 in their account at age 65. This person would be eligible for $15,000 per year in social security benefits or enough to last 15 years not counting any interest earned on the remaining balance.
What this means is, under the current system black males are supporting white females since white females have a life expectancy of 81 and black males of 70. A black male that retires will collect five years at $15,000 per year or $75,000 and the remainder of his social security or $150,000 will be used to pay for white females who will collect 17 years at $15,000 per year or $255,000.
If we were on the private investment plan this $150,000 left over from the black male could be passed on to his children and in a relatively short time there would be a large transfer of wealth to poor people.
The point here is that black leaders like Jesse Jackson oppose the private option and I don’t believe that most black males realize how this effects their retirement.
One wonders about the motives of these leaders.
Federal employees have had such a system for many years and they are very satisfied. There are five investment accounts in which they can invest. If we changed the present social security system to private accounts there would be a large influx of cash into the stock market, which would provide money for investment in new business and expanding business.
In 20 years the system would be privatized and allow the government to direct its efforts to other endeavors.
THE CASE FOR PRIVATIZING SOCIAL SECURITY
Social security takes in about $800 billion per year. It can be privatized over a 20 year period at 5% per year at a cost of $16B the first year and rises each year after. Currently we pay 6.2% of our wages into social security and our employer matches that amount. Social security has three parts. First, the retirement fund, second survivor benefits and third benefits for the disabled. 2.2% must remain as is to cover the survivors and disabled but the remaining 4% can be transferred to private accounts over the 20 year time period.
A person who averaged $30,000 per year in salary over the past 45 years would have contributed 4 percent into his social security account and his employer would have added another similar amount. If they had earned 3% interest they would have about $225,000 in their account at age 65. This person would be eligible for $15,000 per year in social security benefits or enough to last 15 years not counting any interest earned on the remaining balance.
What this means is, under the current system black males are supporting white females since white females have a life expectancy of 81 and black males of 70. A black male that retires will collect five years at $15,000 per year or $75,000 and the remainder of his social security or $150,000 will be used to pay for white females who will collect 17 years at $15,000 per year or $255,000.
If we were on the private investment plan this $150,000 left over from the black male could be passed on to his children and in a relatively short time there would be a large transfer of wealth to poor people.
The point here is that black leaders like Jesse Jackson oppose the private option and I don’t believe that most black males realize how this effects their retirement.
One wonders about the motives of these leaders.
Federal employees have had such a system for many years and they are very satisfied. There are five investment accounts in which they can invest. If we changed the present social security system to private accounts there would be a large influx of cash into the stock market, which would provide money for investment in new business and expanding business.
In 20 years the system would be privatized and allow the government to direct its efforts to other endeavors.
inner city
Recently I wrote about the Minnesota law stating that the math requirement for graduation is that you either pass the test or you flunk it three times and this got me to thinking about the mess that the inner city schools are in. I realize it was just one more example of the results of government helping out. Back in the 60’s when the government stepped in to aid single moms they set up a situation where any girl who got pregnant could have her own place to live with all expenses paid and today we have 75% of black children born into families with no father around. With no fathers around to teach respect for authority these kids grow up with crime and drugs as the norm. The discipline problems in school add to the already dismal results that show that many of those who graduate read and write at a sixth grade level. Many “problem kids” are passed along each year and end up illiterate. Blacks are 12% of the general population and 36% of the prison population. There are more black men in prison than black men in college.
The latest boondoggle foisted upon these same people was the concept that everyone should qualify for the American dream of home ownership and the result was all those who supposedly were helped to purchase homes are now forced into bankruptcy.
We now have three generations of people who have grown up living on public assistance and they have become so dependent on government that they no longer can care for themselves. The primary responsibility of a parent is to raise children who can go out in the world and care for themselves and many children have not been afforded this opportunity. During Hurricane Katrina many people living in New Orleans did not have cars and were told to wait for buses to take them to the Super Dome. Some of these people were elderly, some quite young and others were disabled but the majority were able bodied citizens who could easily walk the three miles to the Dome but did not do so. They had been trained over the years to follow the government so they no longer had the personal initiative to act on their own. This same lack of initiative is what keeps them from improving their life styles. In the past I would make excuses for this lack of initiative but after witnessing the many who have risen above their humble beginnings to become productive citizens, I can see now that the choice is theirs. Under the guise of helping the government is promoting dependence. Why they would do this I can only offer an opinion and that is they want a permanent underclass to secure votes. I will give them the benefit of the doubt and say that they believe they are helping but that does not help to solve the problem.
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The latest boondoggle foisted upon these same people was the concept that everyone should qualify for the American dream of home ownership and the result was all those who supposedly were helped to purchase homes are now forced into bankruptcy.
We now have three generations of people who have grown up living on public assistance and they have become so dependent on government that they no longer can care for themselves. The primary responsibility of a parent is to raise children who can go out in the world and care for themselves and many children have not been afforded this opportunity. During Hurricane Katrina many people living in New Orleans did not have cars and were told to wait for buses to take them to the Super Dome. Some of these people were elderly, some quite young and others were disabled but the majority were able bodied citizens who could easily walk the three miles to the Dome but did not do so. They had been trained over the years to follow the government so they no longer had the personal initiative to act on their own. This same lack of initiative is what keeps them from improving their life styles. In the past I would make excuses for this lack of initiative but after witnessing the many who have risen above their humble beginnings to become productive citizens, I can see now that the choice is theirs. Under the guise of helping the government is promoting dependence. Why they would do this I can only offer an opinion and that is they want a permanent underclass to secure votes. I will give them the benefit of the doubt and say that they believe they are helping but that does not help to solve the problem.
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volt
GM announced today that their new electric car the “Volt” will cost $41,000 even though the government is subsidizing each car with a $7,500 gift to GM. If not for this you would be looking at close to $50,000.
The Volt can travel 40 miles on its battery charge and an additional 340 miles on a gasoline-powered generator
I believe that certain environmental types will pay that and then plug in the car each night but asking the general public to go this route is tenuous at best.
Since 1997 Toyota has sold 850,000 Prius’s world wide and a Prius cost between $22,000 and $32,000.
I have never considered myself a marketing expert but this doesn’t look too good for GM.
It could be that all new technology starts out like this and over time improvements encourage more and more purchases. We shall see. In the meantime I will continue to purchase small front wheel drive four cylinder cars.
The Volt can travel 40 miles on its battery charge and an additional 340 miles on a gasoline-powered generator
I believe that certain environmental types will pay that and then plug in the car each night but asking the general public to go this route is tenuous at best.
Since 1997 Toyota has sold 850,000 Prius’s world wide and a Prius cost between $22,000 and $32,000.
I have never considered myself a marketing expert but this doesn’t look too good for GM.
It could be that all new technology starts out like this and over time improvements encourage more and more purchases. We shall see. In the meantime I will continue to purchase small front wheel drive four cylinder cars.
talk shows
I often hear people question why conservative shows have more appeal than liberal shows and I believe I have an answer or at least a plausible opinion. If you want to talk for several hours about a subject it has to be something that you can be completely honest about. If you are a conservative you believe in the individual’s ability to succeed but if you are a liberal you feel that many people need the help of government to be successful and there in lies the problem. As a liberal you are convinced that because of past real or perceived mistreatment many people need to have a leg up from the government in order to level the playing field but you cannot let them know you feel that way. If you don’t handle this carefully you come across as telling people they cannot take care of themselves and they don’t believe that and don’t want to hear that. They think they are perfectly capable of caring for themselves but they have been victimized by society which leads you as a liberal to confirm their status as victims. You must convey the message to them that their lack of success is not because they are not capable but because of circumstances beyond their control. I maintain that you can do this in a normal conversation but if you have to talk for one, two or three hours your true feelings will slip though and while your audience will not turn you off in anger they will just drift away from you because the true message will come through and they do not want to hear it.
While we all live in the same environment the news is replete with examples of individuals who have faced adversity and won. I don’t need to list names as everyone can think of Horatio Alger stories. I personally know at least a dozen people who succeeded against tremendous odds.
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While we all live in the same environment the news is replete with examples of individuals who have faced adversity and won. I don’t need to list names as everyone can think of Horatio Alger stories. I personally know at least a dozen people who succeeded against tremendous odds.
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tax cuts
With the expiration of the Bush tax cuts set for the end of this year, congress is trying to decide on whether or not to extend them and this has given us an opportunity to examine just who benefited from these cuts, as the Democrats have proposed retaining the tax cuts for those earning less than $200,000 per year.
Democratic plan is neither cheap nor paid for. Making permanent all tax cuts for the middle class will cost the Treasury $2.7 trillion over 10 years, according to the Joint Committee on Taxation, at a time when Washington has already added trillions
Keeping all of the tax cuts in force will cost 3.7 trillion.
Making permanent the 2001 and 2003 tax cuts and AMT relief would have a direct cost of $3.7 trillion over the next ten years (fiscal year 2009 through 2018),
This shows us that 2.7 divided by 3,7 or 72% of the tax savings went to those earning less than $200,000 per year leaving 28% for the so called rich. Now if we investigate who pays taxes we find that those earning more than $200,000 pay over 50%
Nationally, taxpayers earning under $50,000 collectively earned 22 percent of the nation's total AGI, but paid just 8 percent of all federal income taxes at an effective rate of 5 percent. Those making over $200,000 collectively earned 29 percent of total AGI but paid more than half of all federal income taxes at an effective rate of 22 percent.
To summarize the rich people (those with family incomes over $200,000 received 28% of the cuts under the Bush tax cuts and those same people still paid over 50% of all income tax. Since the inception of the Bush tax cuts they have been described as favoring the rich but I am not so sure that was accurate
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Democratic plan is neither cheap nor paid for. Making permanent all tax cuts for the middle class will cost the Treasury $2.7 trillion over 10 years, according to the Joint Committee on Taxation, at a time when Washington has already added trillions
Keeping all of the tax cuts in force will cost 3.7 trillion.
Making permanent the 2001 and 2003 tax cuts and AMT relief would have a direct cost of $3.7 trillion over the next ten years (fiscal year 2009 through 2018),
This shows us that 2.7 divided by 3,7 or 72% of the tax savings went to those earning less than $200,000 per year leaving 28% for the so called rich. Now if we investigate who pays taxes we find that those earning more than $200,000 pay over 50%
Nationally, taxpayers earning under $50,000 collectively earned 22 percent of the nation's total AGI, but paid just 8 percent of all federal income taxes at an effective rate of 5 percent. Those making over $200,000 collectively earned 29 percent of total AGI but paid more than half of all federal income taxes at an effective rate of 22 percent.
To summarize the rich people (those with family incomes over $200,000 received 28% of the cuts under the Bush tax cuts and those same people still paid over 50% of all income tax. Since the inception of the Bush tax cuts they have been described as favoring the rich but I am not so sure that was accurate
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banks
The Federal Deposit Insurance Corp. issued its quarterly report on the U.S. banking industry Thursday, saying the group earned $18 billion during the first quarter of 2010, with more than half of banks and thrifts reporting year-over-year improvements.
Now looking at this you might assume that these bankers must be very smart earning this much in a down economy but upon further inspection their secret is revealed. You see the government loans money to these banks at zero percent interest and then these banks turn around and purchase government bonds that pay three percent. This gives the banks automatic profits with no risk and allows the government to have money to spend on other things.
I want to give everyone the benefit of the doubt but when the senator responsible for all of this, Chris Dodd, has decided not to run for re-election I wonder if he will receive a nice retirement gift from these banks. Call me cynical but this does not pass the smell test.
Now looking at this you might assume that these bankers must be very smart earning this much in a down economy but upon further inspection their secret is revealed. You see the government loans money to these banks at zero percent interest and then these banks turn around and purchase government bonds that pay three percent. This gives the banks automatic profits with no risk and allows the government to have money to spend on other things.
I want to give everyone the benefit of the doubt but when the senator responsible for all of this, Chris Dodd, has decided not to run for re-election I wonder if he will receive a nice retirement gift from these banks. Call me cynical but this does not pass the smell test.
amnesty
In the early 1940’s the country was in need of laborers and an agreement was reached between the United States and Mexico which allowed for guest workers and was know as the Bracero Program. This guest worker program ran from 1942 until 1964 and sponsored some 4.5 million Mexican workers.
During the 60’s a number of labor leaders tried to organize farm workers but every time they called for a strike the management would hire Mexican guest workers to replace them and thusly broke the strike. It was only after the Bracero program was cancelled that the United Farm Workers organized.
President Bush tried to reinstitute a guest worker program but it failed in congress.
by James Parks, Apr 10, 2007
Share
In today’s Los Angeles Times, AFL-CIO President John Sweeney and Pablo Alvarado, executive director of the National Day Laborer Organizing Network, describe how temporary worker programs will negatively impact immigrant workers—and the nation.
Today organized labor faces a dilemma. They do not want immigrants since they lead to lower wages, but they want immigrants since they vote Democratic.
One way to solve this problem is to legalize all and then they can join the union since temporary workers cannot join.
June 25, 2009, 4:55 PM
Guest Worker Program Poses Obstacle for Obama on Immigration Push
President Obama said on Thursday that he was committed to passing a comprehensive immigration plan, but Republicans attending a bipartisan meeting at the White House expressed skepticism a deal could be reached unless Mr. Obama endorsed a guest worker program that Democratic-leaning labor unions oppose.
The best thing that could happen to the president and his party would be amnesty.
During the 60’s a number of labor leaders tried to organize farm workers but every time they called for a strike the management would hire Mexican guest workers to replace them and thusly broke the strike. It was only after the Bracero program was cancelled that the United Farm Workers organized.
President Bush tried to reinstitute a guest worker program but it failed in congress.
by James Parks, Apr 10, 2007
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In today’s Los Angeles Times, AFL-CIO President John Sweeney and Pablo Alvarado, executive director of the National Day Laborer Organizing Network, describe how temporary worker programs will negatively impact immigrant workers—and the nation.
Today organized labor faces a dilemma. They do not want immigrants since they lead to lower wages, but they want immigrants since they vote Democratic.
One way to solve this problem is to legalize all and then they can join the union since temporary workers cannot join.
June 25, 2009, 4:55 PM
Guest Worker Program Poses Obstacle for Obama on Immigration Push
President Obama said on Thursday that he was committed to passing a comprehensive immigration plan, but Republicans attending a bipartisan meeting at the White House expressed skepticism a deal could be reached unless Mr. Obama endorsed a guest worker program that Democratic-leaning labor unions oppose.
The best thing that could happen to the president and his party would be amnesty.
stars
I have always been optimistic about life and continue to this day to see the glass half full, but that does not mean that I ignore the problems that we face. One of those problems, that is not easy to put into a box, is the downward trend toward mediocrity. Examples periodically pop up and remind me of this trend. Recently I discovered that in the state of Minnesota in order to graduate from high school you must either pass a math test or flunk it three times. I will give you a second to allow that to sink it and no I did not make this up. Many schools have done away with the valedictorian idea since it is not fair to the others. Many in the younger grades participate in games where they do not keep score for fear of hurting the feelings of those who may lose. We all know of situations where kids are promoted regardless of performance until we end up with high school graduates who read at fourth grade level.
It seems that since we are not able to bring everyone up to excellence we have decided to discourage excellence under the guise of equality. We have forgotten that it is equality of opportunity we should strive for and not equality of results. Instead of providing opportunities for all, to help even the playing field, we have decided to take the fruits of labor from those who have earned them and pass them on to those who have not.
On the other end of the spectrum is my belief that America is the greatest country in the history of the world. To deny American Exceptionalism is to deny history. I could list many examples to illustrate the point but I will point out two. At the end of WW11 the Russians took one half of Europe and the US took a cemetery in France to bury 66,000 dead Americans who gave their lives for freedom. Throughout history the victors in wars have taken territory but not the US. Another example is the almost eradication of polio, a disease that devastated the globe when I was child. Since the Noble prize was started Americans have won 75% of the medals and we represent only 5% of the population.
Right now we are in a battle. Are we going to allow our country to head down the path toward mediocrity or will we rise to the occasion and seek excellence? I say we might be down but we are not out and soon we will regain our balance and once again reach for the stars.
To quote Robert Browing,
“Ah, but a man's reach should exceed his grasp, or what's a heaven for?”
It seems that since we are not able to bring everyone up to excellence we have decided to discourage excellence under the guise of equality. We have forgotten that it is equality of opportunity we should strive for and not equality of results. Instead of providing opportunities for all, to help even the playing field, we have decided to take the fruits of labor from those who have earned them and pass them on to those who have not.
On the other end of the spectrum is my belief that America is the greatest country in the history of the world. To deny American Exceptionalism is to deny history. I could list many examples to illustrate the point but I will point out two. At the end of WW11 the Russians took one half of Europe and the US took a cemetery in France to bury 66,000 dead Americans who gave their lives for freedom. Throughout history the victors in wars have taken territory but not the US. Another example is the almost eradication of polio, a disease that devastated the globe when I was child. Since the Noble prize was started Americans have won 75% of the medals and we represent only 5% of the population.
Right now we are in a battle. Are we going to allow our country to head down the path toward mediocrity or will we rise to the occasion and seek excellence? I say we might be down but we are not out and soon we will regain our balance and once again reach for the stars.
To quote Robert Browing,
“Ah, but a man's reach should exceed his grasp, or what's a heaven for?”
slaves
On the news today a man from Arizona was pointing out that illegal aliens are treated like slaves in that they are asked to work long hours, under adverse conditions for below minimum wage pay.
This caused me to review the past forty years since the start of the Great Society. Over these years we find in the inner cities of most metro areas, pockets of slaves. We have 75% of children born out of wedlock, dead beat dads abound, 25% high school graduation rates, whole neighborhoods of welfare recipients, high crime, illegal drugs, and black on black murders. This economic slavery is the result of good intentions by government and has produced millions of people who can no longer care for themselves and must rely on the good graces of government to survive.
This is the result of elected officials and other leaders in the black community using their power and influence to keep these people living in distressful conditions by promising more benefits. After pursuing this course for the past 45 years and looking at the end results you would think that those responsible would feel just a little uncomfortable, but maybe that is asking too much.
This caused me to review the past forty years since the start of the Great Society. Over these years we find in the inner cities of most metro areas, pockets of slaves. We have 75% of children born out of wedlock, dead beat dads abound, 25% high school graduation rates, whole neighborhoods of welfare recipients, high crime, illegal drugs, and black on black murders. This economic slavery is the result of good intentions by government and has produced millions of people who can no longer care for themselves and must rely on the good graces of government to survive.
This is the result of elected officials and other leaders in the black community using their power and influence to keep these people living in distressful conditions by promising more benefits. After pursuing this course for the past 45 years and looking at the end results you would think that those responsible would feel just a little uncomfortable, but maybe that is asking too much.
S&L
The S&L crisis of the 80’s was predictable and was destined to happen. These type companies known as, “Thrifts” originate from the Civil War days but only became prominent when they started making home mortgage loans in the 1930’s as anyone who has watched the movie, “It’s A Wonderful Lilfe”, can attest. The reason they were doomed to a crisis is mathematical. If you offer a $100,000 mortgage at 6% for 30 years your monthly payment is $600. Even if you assume that is all interest it is a return of 7.2% per year. Well all it takes to get the Thrift in trouble is for short term rates to go higher than 7.2%. If interest rates increase above 7.2% say to 8% the bank must now pay 8% on deposits and they are receiving less than that on their earnings. They can, of course, start charging more on new mortgages but they will have a large portion of their portfolio earning the lower rate. As rates continue to climb the situation is exacerbated and eventually the crisis of 1987 happened. The bailout for that was several hundred billions which at that time seemed like a lot of money but pales by today’s standards.
Now we have the same situation involving commercial banks. Here is an excerpt from Investment Banking magazine dated July 12, 2010.
The practice of short-term borrowing and long-term lending contributed to the near-collapse of the world financial system in late 2008 when short-term financing dried up. Banks suddenly found themselves starved for cash, and some would have collapsed without central bank support.
Get ready for some more bailouts to go along with state debts, and pension debts.
Now we have the same situation involving commercial banks. Here is an excerpt from Investment Banking magazine dated July 12, 2010.
The practice of short-term borrowing and long-term lending contributed to the near-collapse of the world financial system in late 2008 when short-term financing dried up. Banks suddenly found themselves starved for cash, and some would have collapsed without central bank support.
Get ready for some more bailouts to go along with state debts, and pension debts.
taxes
I am going to make a prediction as to how Obama will handle the Bush Tax cuts that are set to expire at the end of this year. These tax cuts contained considerable benefits for higher income people such as reducing the tax rate on dividend from 39.5% to 15%. They also had some nice benefits for middle class, things like increasing the child tax credit from $500 to $1,000 and moving the lowest tax rate to 10% down from 15%. My prediction is that Obama will allow the tax cuts to end and then he will come in with an Obama tax cut plan directed toward the middle class.
For those who do not follow tax law like I do, I want to go back to the time before Reagan and explain how things worked in the old days. Back then tax law was described using a water pump. The Republicans believed in priming the pump at the top and the Democrats wanted to prime at the bottom. Republicans believed that if you give tax breaks to the rich they will have more profits and use the money to expand business. The Democrats felt that if you gave tax breaks to the middle class they would have more purchasing power and demand for goods would rise and business would expand to meet the demand.
As a young man I witnessed both ways and they both worked so I did not really have strong preference either way, but when Reagan lowered taxes on the wealthy something knew happened. Businesses did not expand by building knew facilities but instead just bought up existing businesses. Someone figured out that it was more efficient to buy an existing business than to start a new one so since that time I have been for priming the pump at the bottom. This is what Obama will do and I think it is a good idea.
Just as a review understand that in the 40’s the top tax rate was 94% and President Kennedy lowered it to 75% and Reagan lowered it to 28%. Clinton raised it to 39% and Bush lowered it to 35% so if Obama allows it to go back to 39% that would not be such a big deal. Having the dividend tax rate go from 15% to 39% will be a big deal as will increasing capital gains from 15% to 20% but I believe this is the plan.
For those who do not follow tax law like I do, I want to go back to the time before Reagan and explain how things worked in the old days. Back then tax law was described using a water pump. The Republicans believed in priming the pump at the top and the Democrats wanted to prime at the bottom. Republicans believed that if you give tax breaks to the rich they will have more profits and use the money to expand business. The Democrats felt that if you gave tax breaks to the middle class they would have more purchasing power and demand for goods would rise and business would expand to meet the demand.
As a young man I witnessed both ways and they both worked so I did not really have strong preference either way, but when Reagan lowered taxes on the wealthy something knew happened. Businesses did not expand by building knew facilities but instead just bought up existing businesses. Someone figured out that it was more efficient to buy an existing business than to start a new one so since that time I have been for priming the pump at the bottom. This is what Obama will do and I think it is a good idea.
Just as a review understand that in the 40’s the top tax rate was 94% and President Kennedy lowered it to 75% and Reagan lowered it to 28%. Clinton raised it to 39% and Bush lowered it to 35% so if Obama allows it to go back to 39% that would not be such a big deal. Having the dividend tax rate go from 15% to 39% will be a big deal as will increasing capital gains from 15% to 20% but I believe this is the plan.
Islam
The president said that NASA’s main mission is to reach out to Muslim nations and point out Islams great contributions to math and science. Gulp. Shortly after 9/11 I read a couple of books on Islam, the most informative was written by Bernard Lewis, a man considered to be the foremost scholar on the Middle East. He said that the first 500 years of Islam were the glory years and the religion spread across three continents but for the next 1000 years nothing of significance happened. The reason was that Muslims did not like to live in non Muslim countries as they felt it was not compatible with their religious beliefs. The net result was the west went through the industrial revolution which included a revolution in science and technology and the Muslim world reminded in the 12th century where it is at today.
As the west emerged from the Dark Ages the Muslim world stayed behind. Today many Muslim countries see the value in the results of western ingenuity but they are fearful of being contaminated by the culture. They like color TV but not half dressed women in the ads. They are caught in the trap that comes with a theocracy, in that they desire the productivity and the conveniences of modern life but it does not fit well with Sharia Law, the Muslim law that says that their religion is a way of life. Until they agree to separate church and state they will not fit well into western society.
As the west emerged from the Dark Ages the Muslim world stayed behind. Today many Muslim countries see the value in the results of western ingenuity but they are fearful of being contaminated by the culture. They like color TV but not half dressed women in the ads. They are caught in the trap that comes with a theocracy, in that they desire the productivity and the conveniences of modern life but it does not fit well with Sharia Law, the Muslim law that says that their religion is a way of life. Until they agree to separate church and state they will not fit well into western society.
pot
In previous correspondence I have pointed out how cities, states and businesses have paid for current expenses by pushing legacy cost (pensions and health care) down the road, the same way the federal government has dealt with social security cost. Well now we have a new member to this illustrious group, that being, the California push to legalize pot. They estimate that the tax revenues will be over one billion dollars per year but the future health cost will be ten times that amount but that cost will come later as smokers develop lung cancer and other serious illnesses. What a country!
New subject:
Yesterday on the news a talking head was interviewing three physicians and the subject of a recent poll came up regarding intimacy. The poll showed that 87% of women faked organisms and they felt that intercourse in general was not worth the effort. From this I envision a new world order. I can see the day in the future when women all decide to marry women. They will not have to put up with the headache of intercourse, they will have a companion they can have intimate chats with, someone they can go shopping with and someone they can share the house hold chores with. They will not have to contend with men who go fishing and golfing on weekends, or have poker night out with the boys. Not to mention the number of men who drink too much, gamble too much, spend too much on toys and of course those who drink too much and abuse their wives. They can use sperm banks and artificial insemination if they decide to have children and have two income families to cover expenses. As the years pass they can use technical procedures to only have female children and one day there will be no more men. This will leave us with a world with far less crime, and likely be the end of wars. I think I will stop here because this is starting to sound too good.
Happy Forth!
New subject:
Yesterday on the news a talking head was interviewing three physicians and the subject of a recent poll came up regarding intimacy. The poll showed that 87% of women faked organisms and they felt that intercourse in general was not worth the effort. From this I envision a new world order. I can see the day in the future when women all decide to marry women. They will not have to put up with the headache of intercourse, they will have a companion they can have intimate chats with, someone they can go shopping with and someone they can share the house hold chores with. They will not have to contend with men who go fishing and golfing on weekends, or have poker night out with the boys. Not to mention the number of men who drink too much, gamble too much, spend too much on toys and of course those who drink too much and abuse their wives. They can use sperm banks and artificial insemination if they decide to have children and have two income families to cover expenses. As the years pass they can use technical procedures to only have female children and one day there will be no more men. This will leave us with a world with far less crime, and likely be the end of wars. I think I will stop here because this is starting to sound too good.
Happy Forth!
paintings
Be careful what you wish for is an old adage that might very well apply to the Republicans who want to retake the house this November. The big domestic issues are jobs and deficit spending and I am not sure they have a plan. The jobs one will be the easiest to explain as they will say just make things more favorable for small business and that will likely work but it will take some time. They are not going to increase taxes so if they want to tackle the deficit they will have to reduce spending which means cut benefits. To make any kind of dent in the problem they will have to do more than not renew unemployment checks. They will not want to cut defense during war so they will have to go after the big items like social security and Medicare. The only way to avoid cuts is to have enough growth to cover the debt and that is possible and could very well happen if and when small business feels comfortable in expanding.
New subject to prove that I am interest other than politics
Starting back some 30 plus years ago it became common for expensive paintings to be auctioned off to bidders who were unidentified and the purchase was made over the telephone by a third party. These paintings often sell for more than 50 million dollars. I have always been suspicious when I see these mysterious sales as I believe they could be tax scams. If I purchase a painting for 5 million and sell it a year and a day later I have a long term capital gain and pay 15% tax on the 45 million or 6.7 million. If I am rich I am in the 45% tax bracket when you count federal and state taxes so I gave the painting to a museum I could deduct it as a charitable contribution and save 45% of 50 million or 22 million in taxes. Now I would not do that if my only concern was saving taxes but if I had a partner working with me, I could set up the following scheme. My partner buys a painting for 5 million at the same time that I buy mine and a year and day later he sells his to an unknown buyer for 50 million just as I did. Now here is the scheme. I bought his and he bought mine. Now let us see where we stand. I paid him 50 million for a painting he bought for 5 million and he paid me 50 million for a painting I bought for 5 million. At this point we are both out 5 million. We each donate our respective paintings to the museum and we both take a 50 million dollar charitable deduction which saves us 22 million in taxes. This is a nice return our 5 million investment. There is a limit of 50% of adjusted gross income on charitable contributions so each of us would have to have an AGI of at least 100 million but the people that would do this have billions so that would not be a problem. As far as establishing the value of the gift the general rule is the value is what a willing buyer will pay a willing seller and we clearly established that at the auction.
New subject to prove that I am interest other than politics
Starting back some 30 plus years ago it became common for expensive paintings to be auctioned off to bidders who were unidentified and the purchase was made over the telephone by a third party. These paintings often sell for more than 50 million dollars. I have always been suspicious when I see these mysterious sales as I believe they could be tax scams. If I purchase a painting for 5 million and sell it a year and a day later I have a long term capital gain and pay 15% tax on the 45 million or 6.7 million. If I am rich I am in the 45% tax bracket when you count federal and state taxes so I gave the painting to a museum I could deduct it as a charitable contribution and save 45% of 50 million or 22 million in taxes. Now I would not do that if my only concern was saving taxes but if I had a partner working with me, I could set up the following scheme. My partner buys a painting for 5 million at the same time that I buy mine and a year and day later he sells his to an unknown buyer for 50 million just as I did. Now here is the scheme. I bought his and he bought mine. Now let us see where we stand. I paid him 50 million for a painting he bought for 5 million and he paid me 50 million for a painting I bought for 5 million. At this point we are both out 5 million. We each donate our respective paintings to the museum and we both take a 50 million dollar charitable deduction which saves us 22 million in taxes. This is a nice return our 5 million investment. There is a limit of 50% of adjusted gross income on charitable contributions so each of us would have to have an AGI of at least 100 million but the people that would do this have billions so that would not be a problem. As far as establishing the value of the gift the general rule is the value is what a willing buyer will pay a willing seller and we clearly established that at the auction.
soap
As most of you know I have some serious concerns about the important issues facing our country but the most important of these has not made the headlines. I am deeply disturbed by the lack of detergent commercials on TV. What is going on. Remember “Tides Inside” and “Duz does everything”. We need a congressional investigation. Something is afoot!
congress
After searching diligently for the past several years I have found a corollary between the average person and a congressman. Congress over the years has passed a number of so called consumer protection plans that are for the common man. This means that when you buy a house you have thirty pages of documents to sign, none of which make sense and would only be understood if you had two lawyers by your side interpreting. The result is that you sign the papers and worry about what they mean later. Congress has now passed national health care and financial reform both of which were over 2000 pages that no one read and members concluded that they will figure out what these bills mean after they are in force.
Quote from Congressman Conyers regarding health care bill.
“I love these members, they get up and say, ‘Read the bill,’” said Rep. John Conyers. “What good is reading the bill if it’s a thousand pages and you don’t have two days and two lawyers to find out what it means after you read the bill?”
Quote from Nancy Palosi regarding heath care bill.
But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.
Quote from Senator Dodd after passing the finance bill
“It’s a great moment. I’m proud to have been here,” said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. “No one will know until this is actually in place how it works.
Do you find it a little unnerving that we are acting like congressmen?
Quote from Congressman Conyers regarding health care bill.
“I love these members, they get up and say, ‘Read the bill,’” said Rep. John Conyers. “What good is reading the bill if it’s a thousand pages and you don’t have two days and two lawyers to find out what it means after you read the bill?”
Quote from Nancy Palosi regarding heath care bill.
But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.
Quote from Senator Dodd after passing the finance bill
“It’s a great moment. I’m proud to have been here,” said a teary-eyed Sen. Christopher J. Dodd (D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate. “No one will know until this is actually in place how it works.
Do you find it a little unnerving that we are acting like congressmen?
pension reform
The pending crisis in pensions is looming larger each day. When a pension fund does not have enough money to meet its promises it is called underfunded. This has happened in the past, most recently in the late 70’s when inflation hit double digits. The funds that are adversely affected are not the 401 K types but those called defined benefit plans and most state employee plans are in this category. Recall how these plans work. The fund has a factor, usually between one and two percent. The factor is multiplied by the number of years you worked and that is the percent of your salary that you will receive at full retirement. If the factor is 1.5% and you have worked there for 30 years you will retire at 45% of salary. Some people have suggested that the factor be lowered to save the fund and this would work but I have a better suggestion. Remember that the benefit is determined by the factor, the years of service and final salary. I suggest that the states announce that all future pay raises will be one half of the inflation rate and this will hold wages down. People who are close to retirement will not be affected but younger workers will and they will have time to make up for the pension loss with other savings. All employees will know that they are not going to receive pay raises comparable to those in other jobs and they can look elsewhere if they are not happy. New hires will know up front what they are getting into and so no surprises for them. How long this restriction on wages lasts depends on the economy and may someday be adjusted. Take one example. Employee A is 30 years old and earns $40,000 per year. If inflation over the next 30 years is 5% his wage at age 60 would be $172,800 per year and if he retired at 45% his pension would be $77,800 per year. If his salary was allowed to increase by only 2.5% his final pay would be $83,900 and his pension would be $37,700. As you can see the reduction in wages would not have to be as drastic as one half of the inflation rate and it could be calculated to make the pension whole again. My experience with pension tells me that holding wages down by a small amount over a long period of time would be the least painful way to solve this problem.
While what I am suggesting here looks and is drastic there are other ideas that are even more troublesome. One is for congress to pass a law that allows states to file bankruptcy after which they can renegotiate the pensions agreements and get them properly funded. In any event you will be hearing a lot more about underfunded pensions in the near future.
While what I am suggesting here looks and is drastic there are other ideas that are even more troublesome. One is for congress to pass a law that allows states to file bankruptcy after which they can renegotiate the pensions agreements and get them properly funded. In any event you will be hearing a lot more about underfunded pensions in the near future.
soccer
I generally check in on the English Al Jazzera site and in today’s news they pointed out that the entire Arab world was pulling for Algeria in the soccer game. In line with the Obama policy of going out of our way to try and get along, I think we should have lost the game on purpose and then all those Arabs would like us better. We missed an opportunity to engender good vibs from our Arab friends.
I wonder if Patraeus demanded that the July 11th pull out date be rescinded as well as the don’t shoot until your shot at rule before he agreed to take the job. Recall that Senator Obama was outspokenly against the surge in Iraq which Patraeus successfully handled. After the success Obama had a change of heart
Barack Obama purges Web site critique of surge in Iraq
BY JAMES GORDON MEEK
DAILY NEWS WASHINGTON BUREAU
Monday, July 14th 2008, 8:10 PM
·
WASHINGTON - Barack Obama's campaign scrubbed his presidential Web site over the weekend to remove criticism of the U.S.troop "surge" in Iraq, the Daily News has learned.
I wonder if Patraeus demanded that the July 11th pull out date be rescinded as well as the don’t shoot until your shot at rule before he agreed to take the job. Recall that Senator Obama was outspokenly against the surge in Iraq which Patraeus successfully handled. After the success Obama had a change of heart
Barack Obama purges Web site critique of surge in Iraq
BY JAMES GORDON MEEK
DAILY NEWS WASHINGTON BUREAU
Monday, July 14th 2008, 8:10 PM
·
WASHINGTON - Barack Obama's campaign scrubbed his presidential Web site over the weekend to remove criticism of the U.S.troop "surge" in Iraq, the Daily News has learned.
oil rigs
For anyone who might have skipped geography class, I would like to remind you that the island of Cuba sticks out right into the Gulf of Mexico. In recent years Cuba has made arrangements with China, Russian, Spain and Italy which will permit the construction of off shore oil rigs in the Gulf. Using slant drilling these rigs will tap into the vast reserves that were assumed to belong to the US and Mexico. In addition Venezuelan has recently contracted with Cuba to build a large refinery in Cuba. Recent news items have suggested that the oil platforms may move to Brazil or Africa but the may only move a few miles into Cuban waters and start pumping oil for Russia who will then sell it to the US further increasing our dependence on foreign oil.
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Even if they lift the ban on drilling it is likely that new regulations that will not affect Cuban waters will increase the cost of drilling….things like safety equipment, insurance and other government regs. With these additional cost it may be better business to move into Cuban waters
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Even if they lift the ban on drilling it is likely that new regulations that will not affect Cuban waters will increase the cost of drilling….things like safety equipment, insurance and other government regs. With these additional cost it may be better business to move into Cuban waters
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general
I cannot let this day pass without putting in my two cents worth on the General McChrystal situation. His actions indicate a degree of immaturity which disqualifies him from his position. There is nothing wrong with disagreeing with the president but it is best to express his concerns face to face in private and if he cannot carry out the orders given to him he should resign. Some say that it was his plan that Obama asked him to carry out but that is not the whole story. He asked for 60,000 troops and received only 30,000. After he agreed to the plan the president announced a date to start withdrawing and later placed restrictions on how the troops in the field should behave, going so far as to say they should not fire unless fired upon. I believe McChrystal should have resigned when the July of 2011 start of withdrawal was announced. To tell an enemy who fades in and out of the woodwork that you plan to start leaving next July is an unacceptable military policy and McChrystal knows that, but chose to stay in spite of it.
One wonders what he will say after he retires on his speaking tours. Will he undermine the Obama war effort or will he put the safety of the troops first and keep quiet. Will Obama be concerned about what he might say and keep him on. Stay tuned!
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John/Jack
One wonders what he will say after he retires on his speaking tours. Will he undermine the Obama war effort or will he put the safety of the troops first and keep quiet. Will Obama be concerned about what he might say and keep him on. Stay tuned!
\
John/Jack
pensions
About a month ago I wrote about pensions and how the benefits are determined and how easy it is to manipulate calculations to get a desired result. In the news yesterday is the latest gimmick that states like Illinois plan to use to help their budgets. They say that all new hires will have to accept lower pension benefits so they can reduce the amount of money they must put into the plan today and thus have those funds available to pay for current benefits like salaries. Recall that when determining current contributions to pension you must consider benefits that may not pay out for many years. This way they can keep the pension promises they made to current employees and reduce benefits only to new hires and of course this is easy to enact and they can worry about new hires in the future. Can’t you just see this future situation where I was hired a year before the change and you and I are now retiring you with 39 years of service and me with 40 years and my pension is $25,000 and yours is $20,000. That might cause some controversy but that is a long way off and someone else problem.
It has been the history of pensions that problems were pushed on down the road for the next guy to handle and this case is no exception.
My brother lives near New Orleans and I asked for his thoughts on the oil spill and here is his response.
Slidell is about 40 miles north of New Orleans no problems yet. Thank for asking.
Now thisoil spill is BP's fault for sure, but I fault the administration (obama) slow response turning down help from the Dutch and other who are very experienced in these matters, they offered skimmer boats and other aid 3 days after the explosion and was turned down because of the Jones act (Unions). I believe that 90 to 95% would been captured.
This is a political BS Tto try to get cap and tax. They also need to investigate the governmnet agencies who's it is to over see and insepct these rigs.
obama is putting 1000's of people out of work out of work the moritorium on oil drilling and wants BP to pay for is agenda for people out of work and cap and tax.
If they had been allowed to drill in shallower water like Gov Jindal authorized they would not have had this problem.
Mike
Jack/John
It has been the history of pensions that problems were pushed on down the road for the next guy to handle and this case is no exception.
My brother lives near New Orleans and I asked for his thoughts on the oil spill and here is his response.
Slidell is about 40 miles north of New Orleans no problems yet. Thank for asking.
Now thisoil spill is BP's fault for sure, but I fault the administration (obama) slow response turning down help from the Dutch and other who are very experienced in these matters, they offered skimmer boats and other aid 3 days after the explosion and was turned down because of the Jones act (Unions). I believe that 90 to 95% would been captured.
This is a political BS Tto try to get cap and tax. They also need to investigate the governmnet agencies who's it is to over see and insepct these rigs.
obama is putting 1000's of people out of work out of work the moritorium on oil drilling and wants BP to pay for is agenda for people out of work and cap and tax.
If they had been allowed to drill in shallower water like Gov Jindal authorized they would not have had this problem.
Mike
Jack/John
claims
Recently there have been a number of cases where candidates for office have exaggerated their resumes and got caught because so many people take the time to check things out on the Internet. The same is true for those already in office as I know a number of people like myself who look up claims made by politicians. Here is an example of two senators making statements about their proposed legislation and I decided to do a few calculations.
Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) found many reasons to gloat after getting the 74-page study that showed the overall costs from their legislation’s major global warming provisions would cost an average household between $80 to $150 per year.
“There’ll be some people who will want to demagogue that politically, but that’s less than $1 a day,” Lieberman told reporters. “Is the American household willing to pay less than $1 so we don’t have to buy oil from foreign countries, so we can create millions of new jobs, so we can clean up our environment? I think the answer is going to be yes.”
We currently import 4 billion barrels of oil per year and at the current price of $70 that comes to the tidy sum of $280 billion. There are 112 families in the US so the annual cost per family is $2,500 or $6.84 per day per family. Now this is six times more than what Lieberman says and I would be willing to pay that to get rid of all imported oil, but since these senators have come up with this misleading information I am concerned about everything else they say about their bill.
It has become increasingly difficult to get accurate information out of the government officials. As more and more people learn to check out claims by using data collected on line it is going to be more difficult for these politicians to make blanket statements and expect people to take them at their word. I know I certainly don’t and I have friends who check things out like I do.
Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) found many reasons to gloat after getting the 74-page study that showed the overall costs from their legislation’s major global warming provisions would cost an average household between $80 to $150 per year.
“There’ll be some people who will want to demagogue that politically, but that’s less than $1 a day,” Lieberman told reporters. “Is the American household willing to pay less than $1 so we don’t have to buy oil from foreign countries, so we can create millions of new jobs, so we can clean up our environment? I think the answer is going to be yes.”
We currently import 4 billion barrels of oil per year and at the current price of $70 that comes to the tidy sum of $280 billion. There are 112 families in the US so the annual cost per family is $2,500 or $6.84 per day per family. Now this is six times more than what Lieberman says and I would be willing to pay that to get rid of all imported oil, but since these senators have come up with this misleading information I am concerned about everything else they say about their bill.
It has become increasingly difficult to get accurate information out of the government officials. As more and more people learn to check out claims by using data collected on line it is going to be more difficult for these politicians to make blanket statements and expect people to take them at their word. I know I certainly don’t and I have friends who check things out like I do.
paygo
Most of us who have been around for a while understand that politicians running for office tell us what we want to hear and our president was no exception to the rule when he was a candidate. In spite of this the president said the reason he did not call the CEO of BP is because
I have not spoken to him directly – and here’s the reason: because my experience is when you talk to a guy like a BP CEO, he’s going to say all the right things to me.
Here is one example from the campaign and when he was in office
Jan 30,2010
By Anne E. Kornblut
Pledging to curb federal budget deficits, President Obama used his weekly radio address Saturday to praise the Senate's passage of a measure requiring that increased spending be offset with cuts and to tout his proposed freeze on non-discretionary budget spending. The idea is called pay as you go or paygo.
The problem is that all the government has to do is to declare an emergency and they can bypass paygo
Pay-go gets passed, then it gets bypassed
By Walter Alarkon - 02/16/10 09:33 PM ET
The ink is barely dry on the pay-as-you-go law, and Democrats are seeking to bypass it to enact parts of their job-creation agenda.
Democratic leaders said extensions of unemployment insurance and COBRA healthcare benefits should be emergency spending that isn’t subject to the pay-as-you-go statute, which requires new non-discretionary spending to be offset with spending cuts or tax increases.
This is not just my criticism of Obama but one of the main reasons why many Americans are unhappy with their government. This sort of double talk has been going on for many years now and I could fill up a book with examples like the above.
I have not spoken to him directly – and here’s the reason: because my experience is when you talk to a guy like a BP CEO, he’s going to say all the right things to me.
Here is one example from the campaign and when he was in office
Jan 30,2010
By Anne E. Kornblut
Pledging to curb federal budget deficits, President Obama used his weekly radio address Saturday to praise the Senate's passage of a measure requiring that increased spending be offset with cuts and to tout his proposed freeze on non-discretionary budget spending. The idea is called pay as you go or paygo.
The problem is that all the government has to do is to declare an emergency and they can bypass paygo
Pay-go gets passed, then it gets bypassed
By Walter Alarkon - 02/16/10 09:33 PM ET
The ink is barely dry on the pay-as-you-go law, and Democrats are seeking to bypass it to enact parts of their job-creation agenda.
Democratic leaders said extensions of unemployment insurance and COBRA healthcare benefits should be emergency spending that isn’t subject to the pay-as-you-go statute, which requires new non-discretionary spending to be offset with spending cuts or tax increases.
This is not just my criticism of Obama but one of the main reasons why many Americans are unhappy with their government. This sort of double talk has been going on for many years now and I could fill up a book with examples like the above.
we all count
My wife called her sister today to wish her happy birthday, something she does on a regular basis, since there are ten girls in her family, but this reminded me of the last time I talked with this particular sister. It was about five years ago and she was telling me about a local TV person who wanted to interview her about some current affairs and she declined saying that she wouldn’t know much about the subject. I was upset when she told me that story and I explained why I always feel that my opinion counts as much as others.
You can take any controversial subject and you will find people on both sides of the issue who are experts, people who have spent years investigating the facts, and have reached certain conclusions. Since these people disagree you could flip a coin and have just as good a chance as being right as they have, but the problem is in the word right. In most of these situations the “right” is very hard to define and is subject to the foibles of human bias and misunderstanding.
I told her that she could use her 80 years of life experience along with her God given common sense and come up with an answer that would be just as good as anyone else. I told her that I wouldn’t place too much faith in “experts”. We have all heard the definitions of experts and my favorite is.
An expert is a man who knows more and more about less and less until he finally knows everything about nothing.
When I see these experts on TV I want to inject one thought into their heads and it is an old adage that is one of my favorite sayings.
When you change the way you look at things, the things you look at change.
I will close with a comment on one of my favorite sports figures, Coach John Wooden who died this past week at the age of 99. He was the first college coach to take in the inner city boys and teach them about life and treat them like sons, an approach that is followed by most coaches today.
My favorite quote from Coach Wooden was
The finest thing a man can do for his children is to love their mother.
Jack/John
You can take any controversial subject and you will find people on both sides of the issue who are experts, people who have spent years investigating the facts, and have reached certain conclusions. Since these people disagree you could flip a coin and have just as good a chance as being right as they have, but the problem is in the word right. In most of these situations the “right” is very hard to define and is subject to the foibles of human bias and misunderstanding.
I told her that she could use her 80 years of life experience along with her God given common sense and come up with an answer that would be just as good as anyone else. I told her that I wouldn’t place too much faith in “experts”. We have all heard the definitions of experts and my favorite is.
An expert is a man who knows more and more about less and less until he finally knows everything about nothing.
When I see these experts on TV I want to inject one thought into their heads and it is an old adage that is one of my favorite sayings.
When you change the way you look at things, the things you look at change.
I will close with a comment on one of my favorite sports figures, Coach John Wooden who died this past week at the age of 99. He was the first college coach to take in the inner city boys and teach them about life and treat them like sons, an approach that is followed by most coaches today.
My favorite quote from Coach Wooden was
The finest thing a man can do for his children is to love their mother.
Jack/John
birds
Rep Jim Clyburn of South Carolina was on CNN today and said the problems with handling the oil spill are complicated by the fact that there are more than a dozen government agencies involve and coordinating the different groups is difficult. Duh! This man is a liberal who believes that the government is the best entity to solve problems. Here is one small example of the difficulty.
The government said that people will work around the clock cleaning up the beaches and then OSHA stepped in and said they could only work two hours at a time because of the heath hazards and before they start they must attend a four hour HazMat class. You can look this up as I didn’t want to since I am sure it would make me sick.
Once more on my rant about oily birds. The saviors of these birds have a spotter helicopter that flies up and down the beaches and when they see a bird they radio the ground crew who then dispatches a boat to the birds location. Most of the time the ground crew is unable to capture the bird. Yesterday after working all day using the helicopter and four boats with ground crews they were able to rescue 21 birds. I think I am going nuts. I plead with the news people not to let me know the cost per bird of this noble adventure.
Have a nice day
The government said that people will work around the clock cleaning up the beaches and then OSHA stepped in and said they could only work two hours at a time because of the heath hazards and before they start they must attend a four hour HazMat class. You can look this up as I didn’t want to since I am sure it would make me sick.
Once more on my rant about oily birds. The saviors of these birds have a spotter helicopter that flies up and down the beaches and when they see a bird they radio the ground crew who then dispatches a boat to the birds location. Most of the time the ground crew is unable to capture the bird. Yesterday after working all day using the helicopter and four boats with ground crews they were able to rescue 21 birds. I think I am going nuts. I plead with the news people not to let me know the cost per bird of this noble adventure.
Have a nice day
Pensions
There is a pending disaster that I have been watching for years and it is not getting the attention of the press. The reason it has not been covered is that it is very complicated and therefore difficult to explain in a news broadcast. It involves pensions both public and private. In the past I have mentioned some personal experiences I had with pensions when I worked for Equitable. One was with the Grand Forks city pension and the other was the North Dakota state pension. In the years following WW 2, pensions came into their own and with the help of unions grew rapidly. These pensions were known as defined benefit plans, that is, they defined the benefit you would receive at some later date. Realize that this is no easy task. A typical pension plan would say that when you retire it will pay you one percent of your salary for every year you worked. This means that if you are 65 and retire after 30 years of service the company would pay you 30% of your salary. Just think of what kind of calculations and estimations are needed to make such a promise. First we have to determine how many people working here today will still be there at age 65. We then have to estimate what their wages will be at their age 65. We next have to estimate what kind of return on investment we would earn over these next many years. With all these uncontrolled variables the companies had to review the pension plan yearly to make the necessary adjustments. As time passed the government stepped in and in 1974 passed the landmark Employee Retirement Investment Security Act known as ERISA. Since that time pensions have been required to meet certain funding levels designed to protect the pensioners. Pension funds were audited in order to make sure there was enough money in the fund to provide the promised benefits.
Just look at one example say of a person who is age 25 and starts to work for company A. His salary is $30,000 and we have to project his future increases in pay so we used an average of 4% per year which means when he is 65 his salary will be $144,000. Now if our pension plan says he will get one percent for each of the 40 years he worked his pension will be $57,600 per year. Now we have to determine how much money we need to set aside each year to purchase a pension of that amount. We can use insurance tables that tell us that if we want to pay that much out for the rest of his life we will have to have about $950,000. In order to accumulate that much money over 40 years at 4% we must set aside $10,000 per year. But pension managers realized that they could put a smaller amount in during the early years and larger amounts in later years. In addition the plans were set up so that if you left the company you left most of your benefit behind which meant that with high turnover the company could get by putting in much less. The idea of a pension plan was to encourage employees to stay but the math gave a financial advantage to companies with high turnover but that is a problem for another day.
Now that the difficulties in determining pension contributions are exposed it becomes obvious that the ability to manipulate the numbers is tempting and of course this is just what has happened. The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return. They projected that they would earn 8% on the investments and everyone knows that 8% in today’s market is unrealistic. The state of California over the past 20 plus years has given money to city, county, state employees and teachers in the form of raises and has shorted the pension fund. They balanced out the shortage by increasing the projected rate of return on the pension fund. For example over a 40 year period the difference in earning 4% vs 8% on $1,000 per year contribution is the difference between ending up with $95,000 or $259,000.
Now that this practice has been exposed, not only in California but many others states, these states are looking to the federal government for bailouts and Obama still has about $400 billion in the stimulus to help them out.
This problem will not go away and the first step is to stop the bleeding and that can be done by switching away from defined benefit plans to defined contribution plans like 401K’s. Under these plans no future benefits are guaranteed by formula but each person has their own account and what ever money is there at retirement belongs to that individual.
There are some pensions that are called multicompany. One large union where the members work for various companies is the Teamsters. Their pension is underfunded and a good prospect for government bailout since both the union and the company will benefit. Senator Bob Casey has introduced a bill to move in this direction and he has the backing of both company and union.
This brings us to what economist refer to as a “moral hazard”. Since the managers of these pension benefit when they perform well, they are willing to take higher risk when they know that ultimately the government will back them up if they guess wrong which means that they will likely fail at some future point. It is the too big to fail idea that we saw in banks so get ready for tax payer bailouts.
As an interesting aside when I worked for Equitable the company was part of a fix up to a problem by the Teamsters. The fund for about one half million members was used as a slush fund for various illegal projects by the union bosses. Under the guiding hand of Hoffa the fund invested heavily in Las Vegas gambling casinos which is not allowed and they lost. They were all caught and the government asked The Equitable and other companies to straighten things out and get the fund back on track. This fund was so damaged that even after years of effective management they were never able to get out from under and to this day remain in danger. The longer the problem persisted the older the pensioners got and more and more were retiring and the payouts were more than the fund could handle. This will be one of the funds that Senator Casey’s bill will bailout. Who would have thought that Jimmy Hoffa would one day get into our pockets to take care of the people he shafted.
Just another day at the office. You see it doesn’t seem to matter much which political party is in charge because the problem is systemic in that big business, big unions and big government are corrupt and people are fed up and this and November could be a wake up call. I told you it was complicate.
Just look at one example say of a person who is age 25 and starts to work for company A. His salary is $30,000 and we have to project his future increases in pay so we used an average of 4% per year which means when he is 65 his salary will be $144,000. Now if our pension plan says he will get one percent for each of the 40 years he worked his pension will be $57,600 per year. Now we have to determine how much money we need to set aside each year to purchase a pension of that amount. We can use insurance tables that tell us that if we want to pay that much out for the rest of his life we will have to have about $950,000. In order to accumulate that much money over 40 years at 4% we must set aside $10,000 per year. But pension managers realized that they could put a smaller amount in during the early years and larger amounts in later years. In addition the plans were set up so that if you left the company you left most of your benefit behind which meant that with high turnover the company could get by putting in much less. The idea of a pension plan was to encourage employees to stay but the math gave a financial advantage to companies with high turnover but that is a problem for another day.
Now that the difficulties in determining pension contributions are exposed it becomes obvious that the ability to manipulate the numbers is tempting and of course this is just what has happened. The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return. They projected that they would earn 8% on the investments and everyone knows that 8% in today’s market is unrealistic. The state of California over the past 20 plus years has given money to city, county, state employees and teachers in the form of raises and has shorted the pension fund. They balanced out the shortage by increasing the projected rate of return on the pension fund. For example over a 40 year period the difference in earning 4% vs 8% on $1,000 per year contribution is the difference between ending up with $95,000 or $259,000.
Now that this practice has been exposed, not only in California but many others states, these states are looking to the federal government for bailouts and Obama still has about $400 billion in the stimulus to help them out.
This problem will not go away and the first step is to stop the bleeding and that can be done by switching away from defined benefit plans to defined contribution plans like 401K’s. Under these plans no future benefits are guaranteed by formula but each person has their own account and what ever money is there at retirement belongs to that individual.
There are some pensions that are called multicompany. One large union where the members work for various companies is the Teamsters. Their pension is underfunded and a good prospect for government bailout since both the union and the company will benefit. Senator Bob Casey has introduced a bill to move in this direction and he has the backing of both company and union.
This brings us to what economist refer to as a “moral hazard”. Since the managers of these pension benefit when they perform well, they are willing to take higher risk when they know that ultimately the government will back them up if they guess wrong which means that they will likely fail at some future point. It is the too big to fail idea that we saw in banks so get ready for tax payer bailouts.
As an interesting aside when I worked for Equitable the company was part of a fix up to a problem by the Teamsters. The fund for about one half million members was used as a slush fund for various illegal projects by the union bosses. Under the guiding hand of Hoffa the fund invested heavily in Las Vegas gambling casinos which is not allowed and they lost. They were all caught and the government asked The Equitable and other companies to straighten things out and get the fund back on track. This fund was so damaged that even after years of effective management they were never able to get out from under and to this day remain in danger. The longer the problem persisted the older the pensioners got and more and more were retiring and the payouts were more than the fund could handle. This will be one of the funds that Senator Casey’s bill will bailout. Who would have thought that Jimmy Hoffa would one day get into our pockets to take care of the people he shafted.
Just another day at the office. You see it doesn’t seem to matter much which political party is in charge because the problem is systemic in that big business, big unions and big government are corrupt and people are fed up and this and November could be a wake up call. I told you it was complicate.
bombs
For several years now there has been talk that Israel might attack the Iranian nuke facilities but I have always maintained that they could not do this without the US help. I felt there were two reasons for this. First the Israeli plans did not have the range without flying over Iraq and the US would not give them permission and second they needed our 15,000 pound bunker busters to penetrate the underground facilities. Well guess what? In the news today I saw the following item from the London Times.
Saudi Arabia has conducted tests to stand down its air defences to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities, The Times can revealed.
I new that KSA, a Suni Muslim country was concerned about Iran a Shia country but I never thought they would go this far.
The only question that remains now is will the US sell bunker busters to Israel and here is a news item.
In 2008, the United States approved an Israeli request for bunker-busters capable of destroying underground facilities, including Iranian nuclear weapons sites. Officials said delivery of the weapons was held up by the administration of President Barack Obama.
Since taking office, Obama has refused to approve any major Israeli requests for U.S. weapons platforms or advanced systems. Officials said this included proposed Israeli procurement of AH-64D Apache attack helicopters, refueling systems, advanced munitions and data on a stealth variant of the F-15E.
Many in Israel think of this as an embargo against them by Obama.
There have been rumors that Obama was anti Israel but I never put much faith into rumors but now I am wondering.
Saudi Arabia has conducted tests to stand down its air defences to enable Israeli jets to make a bombing raid on Iran’s nuclear facilities, The Times can revealed.
I new that KSA, a Suni Muslim country was concerned about Iran a Shia country but I never thought they would go this far.
The only question that remains now is will the US sell bunker busters to Israel and here is a news item.
In 2008, the United States approved an Israeli request for bunker-busters capable of destroying underground facilities, including Iranian nuclear weapons sites. Officials said delivery of the weapons was held up by the administration of President Barack Obama.
Since taking office, Obama has refused to approve any major Israeli requests for U.S. weapons platforms or advanced systems. Officials said this included proposed Israeli procurement of AH-64D Apache attack helicopters, refueling systems, advanced munitions and data on a stealth variant of the F-15E.
Many in Israel think of this as an embargo against them by Obama.
There have been rumors that Obama was anti Israel but I never put much faith into rumors but now I am wondering.
EU
After WW 2 Germany was to be protected by NATO and they were not allowed to have a large military and the result of that is that Germany spends only 1% of its GDP on defense whereas the US spend 19%. The result is that the German people have many government benefits and they pay dearly for them. Here is a comparison between and American family of four and their German counterpart, both with family income of $50,000.
American family would pay $3,800 in social security tax and that would be it.
The German family would pay $4,500 in social security tax, $5,200 in federal income tax, $7,600 in value added tax and each private company has to pay Municipal Trade Tax of 15% in addition to the corporate income and pass that on to the consumer in the form of higher prices.
The bottom line is the American family has $46,200 to spend and the German family has $32,700 to spend and the items they purchase will cost more than they cost here.
Many of the benefits the Germans receive are in the form of longer paid vacation, more holidays, low cost health care, lower cost for education, and earlier retirements.
This is common through out Europe and the result is that the European Union with 500 million people produces about 20% of the world’s GDP as compared to the US with 300 million people which also produces 20% of world GDP.
Because of this the countries of Europe are now going through the painful exercise of weaning the people away from benefits and this is causing a great deal of unrest as best seen in Greece and soon to be seen in other parts of the EU.
The interesting thing about all this is that while they have come to realize that the government tried to do too much our government is trying
American family would pay $3,800 in social security tax and that would be it.
The German family would pay $4,500 in social security tax, $5,200 in federal income tax, $7,600 in value added tax and each private company has to pay Municipal Trade Tax of 15% in addition to the corporate income and pass that on to the consumer in the form of higher prices.
The bottom line is the American family has $46,200 to spend and the German family has $32,700 to spend and the items they purchase will cost more than they cost here.
Many of the benefits the Germans receive are in the form of longer paid vacation, more holidays, low cost health care, lower cost for education, and earlier retirements.
This is common through out Europe and the result is that the European Union with 500 million people produces about 20% of the world’s GDP as compared to the US with 300 million people which also produces 20% of world GDP.
Because of this the countries of Europe are now going through the painful exercise of weaning the people away from benefits and this is causing a great deal of unrest as best seen in Greece and soon to be seen in other parts of the EU.
The interesting thing about all this is that while they have come to realize that the government tried to do too much our government is trying
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