Zimmerman

I was not interested in the Zimmerman trial but in the aftermath I find some things very strange. To begin with the local DA did not want to arrest Zimmerman because she felt there was not enough evidence to get a conviction. Then after several months of public outcry she arrested him and in her zeal to show she was fair she over charged with second degree murder. Late in the trail seeing the verdict going against them the DA’s office added a lesser charge of manslaughter but it was too little, too late. Now one of the jury members has publically stated that she wanted a conviction but the law got in the way and she was forced to acquit. She says this will bother her for the rest of her life because a man guilty of murder was allowed to go free. During the trial the DA attorneys pointed out that this was not a racial crime, yet all the Monday morning quarterbacks say it was racial. The DA pointed out that this trial had nothing to do with the stand your ground law yet the same quarterbacks are now demonstrating across the country against stand your ground. This is just another example of people not letting the facts get in their way. It reminds me of the time that Al Sharpton stood on the steps in New York defending a poor young black girl who was raped by a white man and when she later recanted, Sharpton said it doesn’t matter that she lied because we know this kind of thing goes on all the time. Al is not the kind of guy that would let the facts of the case deter him from his goal.

Forced savings

The California legislature is currently in the process of writing a law that would require all citizens to participate in a mandatory retirement savings program. The state will deduct 3% from all paychecks and this money would go into a retirement account, something like the way social security operates. The reasoning is that if people don’t save while they are working the state will have to care for them when they retire, so it might as well start now. As everyone knows the money that was supposed to be in the social security fund was transferred to the general fund and used for current expenditures thus leaving the fund with IOU’s. I suspect the same thing would happen to the California fund and the whole thing is a legal way to cover current expenses. As the money is spent the natural progression would be to raise the contribution level above 3% and thus have a new source of funds to cover new programs and when a person retires the state will have to come up with the money by increasing the contributions of current participants and this is what is known as a Ponzi scheme. If this passes in California will it soon be coming to your state?

Wiener

I embarrassed to say that I have been following the ongoing saga of New York mayoral candidate Anthony Wiener and am just a bit confused. He admits to sexting a number of women and then lying about it. He resigned from congress and after he said he stopped this activity he did it again and this time had to fess up because the women went public. Now he is being asked to resign from the race because he lied to his wife and to the public about sexting. I too believe he should drop out of the race because of these offenses but that leads me to the dilemma. Former President Clinton had sex with a subordinate in the Oval Office and lied to his wife and the public about it and he didn’t have to resign and today is held in high esteem as represented by his 60 plus percent approval rating. What is it that I am missing here?

detroit

The City of Detroit made it official today, when it filed for bankruptcy. For those who watch this sort of thing it was no surprise. Each city has its own particular problems but one thing they all have in common is payments to retirees in the form of health care and pensions. While these were the result of collective bargaining, there was a built in distortion because of public unions. It happens at all levels starting with city unions, county unions and state unions. It is also a part of teachers unions. It is the reason why a liberal no less than FDR warned against public unions, in that he knew when people gained the power to determine their own benefits, they would overdo it. One example of how this works would be to look at county workers. The situation would be the same if you looked at state or city workers. The county workers organize and form a union. They then select a candidate to run for county commissioner and then they proceed to get him elected. They help him with their votes, the votes of their relatives and friends. They help him by campaigning door to door calling on their neighbors. They help him by holding coffee parties in their homes along with financial aid to help pay for his campaign. Once elected, they select another candidate and repeat the process and promise those in office, their help in reelection campaigns. Next they sit down across the table from these elected officials and negotiate their benefits. The public unions across the country started this process just after WW 11 and they have worked long and hard to achieve the success they now enjoy. There was nothing illegal or unethical about what they did. It was the American way. Set your goals, work hard to achieve them and then enjoy your success. They have now become the victims of their own success and thus the reason why FDR warned against them.

In regards to Detroit why doesn’t the federal government step in like they did with the auto industry? The city is 19 billion in debt and the Fed is printing up 85 billion per month so they could just pay off the city’s debt. This would set the precedent to bail out all of the other cities that will fail over the next few years. If the government can give billions to the big banks, why not the cities? Could it be those city employees who are going to lose their promised benefits don’t have a lobbyist or perhaps they don’t have enough votes. So much for looking out for the little guy.

Safety first

As of the first of this month the cigarette tax in Minnesota increased by $1.60 per pack. The money is to be used for education but Governor Dayton said his real purpose for pushing this law, was not the tax but the health of the people of the state. It is the punch line for many stories that the speaker says, don’t worry, I’m from the government and I’m here to help. In this case it is a true story. Our state has a democratic governor, senate and house and most of the Supreme Court was appointed by democrats. To say that our state is liberal is an understatement and thus the desire to help the people stay healthy. I think now is the time to take further action in regards to the well-being of our citizens. I suggest we start by placing a tax on all manufactured food items, that contain too much fat or sugar or salt or any other ingredient that we believe is not healthy. These decisions to be made by elected officials. Next all passengers in autos, and any other means of transportation, public and private should be required to ware helmets. Once people are comfortable with that we should require fire proof clothing, similar to what is worn by NSCAR drivers. While other states may not be as concerned about public safety as we here in Minnesota, we will push for the passage of a state highway speed limit of 25 mph. There is no doubt that these changes will protect the citizens from harm and improve their overall health. Next step is to remove the discrimination associated with income disparities. We will do this by making all goods for all citizens less expensive. There will be one type of shoes, one type of pants, one type of shirts, one type of skirts and one type of outer clothing. The only difference will be in the sizes. This will reduce the overall cost for clothing and diminish the variations based on income. The same will be introduced for housing and cars. All houses will be standardized to a 1,200 square foot ranch style with three bedrooms and two baths. Construction cost will decrease significantly as each part of the house can be mass produced and save cost by using standardized production facilities. All cars will be small four door sedans and like Henry Ford says you can have any color as long as it is black. A gas tax of $5 per gallon will encourage people to purchase smaller cars and perhaps electric powered. This will be stage one of the new Minnesota and as people get acclimated to the new ways we can introduce stages two and three. These changes to be announced at a later date. While change is often difficult, in the end the citizens will thank us for their new improved life styles. We do these things not to increase our power or influence but because we know that people cannot take care of themselves and we have the responsibility to help them see the light.

Detroit

The City of Detroit made it official today, when it filed for bankruptcy. For those who watch this sort of thing it was no surprise. Each city has its own particular problems but one thing they all have in common is payments to retirees in the form of health care and pensions. While these were the result of collective bargaining, there was a built in distortion because of public unions. It happens at all levels starting with city unions, county unions and state unions. It is also a part of teachers unions. It is the reason why a liberal no less than FDR warned against public unions, in that he knew when people gained the power to determine their own benefits, they would overdo it. One example of how this works would be to look at county workers. The situation would be the same if you looked at state or city workers. The county workers organize and form a union. They then select a candidate to run for county commissioner and then they proceed to get him elected. They help him with their votes, the votes of their relatives and friends. They help him by campaigning door to door calling on their neighbors. They help him by holding coffee parties in their homes along with financial aid to help pay for his campaign. Once elected, they select another candidate and repeat the process and promise those in office, their help in reelection campaigns. Next they sit down across the table from these elected officials and negotiate their benefits. The public unions across the country started this process just after WW 11 and they have worked long and hard to achieve the success they now enjoy. There was nothing illegal or unethical about what they did. It was the American way. Set your goals, work hard to achieve them and then enjoy your success. They have now become the victims of their own success and thus the reason why FDR warned against them. In regards to Detroit why doesn’t the federal government step in like they did with the auto industry? The city is 19 billion in debt and the Fed is printing up 85 billion per month so they could just pay off the city’s debt. This would set the precedent to bail out all of the other cities that will fail over the next few years. If the government can give billions to the big banks, why not the cities? Could it be those city employees who are going to lose their promised benefits don’t have a lobbyist or perhaps they don’t have enough votes. So much for looking out for the little guy.

DNA

During my life I have come full circle in regards to the behavior of the American people. When I was young I was very good at making excuses for people. No matter how a person behaved, I could justify it based on some past situation. It was never their fault and they could not be held accountable for something that they had no control over. I got so good at this that I ultimately arrived at the point where no one was responsible for anything. As time passed I came to realize that this was not realistic. I saw more and more examples of people who were raised in the same family, lived in the same neighborhoods and went to the same schools and yet grew up to be quite different. One brother became a priest and another a criminal. With the onset of genetic testing, I now find myself beginning another cycle surrounding the behavior of people. It started with physical things like weight control. There are genomes that cause some people to gain weight, some that cause people to feel anxious, some that cause people to use drugs and lately some evidence that there is a gay gene. I can accept all of these changes but if I project into future discoveries, I find myself once again justifying behavior in many ways. For example, what if we discover a gene that causes criminal behavior? Can we punish a criminal if they were genetically predisposed to commit crimes? When we completely unravel the DNA molecule and understand the actions of each gene will we reach the point where no one is responsible for their actions?

Obamacare

Since I do income tax for AARP each year, I am familiar with the tax rules regarding child tax credit and earned income credit. Both of these programs have been abused and have led to fraud on a wide spread scale. The IRS routinely issues Individual Taxpayer Identification Numbers (ITIN) to people who file tax returns but who are not eligible to work in the United States, and that is another whole subject. When filing many file as parents and receive a $1,000 tax credit for each child. It comes in two ways. First if you own $2,000 in tax and you have three children you do not have to pay any tax. You also get a refund of $1,000 through the additional tax credit rule giving you a refund even though you didn’t pay any tax. If you have five children and you owe zero tax you can collect a $5,000 refund through the additional child tax credit. As you might expect this has led to a lot of cheating. A 2011 Treasury Department study found the IRS paid illegal immigrants $4.2 billion in Additional Child Tax Credit refunds in 2010, representing nearly one-fifth of all ACTC refunds paid that year. A similar situation occurred with the earned income credit which offers up to $5,700 in credits on deductions The Earned Income Credit is a federal welfare program. As the notice explained - “Unlike most deductions and credits, the EITC is refundable –– taxpayers can get it even if they owe no tax. For 2011 tax returns, the maximum credit will be $5,751.” It is probably the most expensive federal welfare program. The notice further pointed out that – “For 2009, over 26 million people received nearly $59 billion through the EITC.” Because it is refundable the Earned Income Credit is a magnet for tax fraud. That brings us to the latest change in Obamacare announced this weekend. This program is designed to offer subsidies to low income people to help pay for health insurance but the government is not prepared to check on these people so they will accept their word that they are eligible . This subsidy is refundable meaning you get it even if you don’t pay any tax and the subsidies are paid on a declining scale up to a family income of $94,000 per year. For a family earning $40,000 the credit is $16,000 so this is a much larger program that either the child tax credit or the low income credit so the fraud is likely to be larger. The reason for doing this is to get more people to sign up so the program will become a part of family life and difficult to repeal. The question remains as to how many of those who sign up are legitimate?

Obamacare

As the problems in implementing Obama care continue to mount the program is beginning to cause trouble for the upcoming midterm elections and so the President did the political thing by announcing that the program will be delayed a year or until after the elections. Some people are so opposed to this program that they will go to extremes to interfere with the instillation and others are so in favor that they will accept any plan no matter how flawed. Maybe after the election some sort of adjustments can be made to come up with a workable plan but it seems that what we have now is not good enough and it is going to take more than tweeking.

Oil and gas

The US government has invested about 60 billion in renewable energy experiments and we have little to show for it. There are 700,000 semi’s on the road and it cost about $20,000 to convert a truck from diesel to natural gas and that comes to 14 billion. In addition there are 10,000 truck stops and it would take about $500,000 to get them setup to sell natural gas and that cost another 5 billion. By doing this we would use 500 million barrels of oil less each year and that is what we import from Saudi Arabia. The cost savings to each truck owner would be about $20,000 per year and CO2 emissions would be 70% less. In addition other contaminants like oxides of sulfur and nitrogen are almost eliminated. Is our government investing in the wrong area?

Public officials going astray

Recently we have had a bunch of former politicians who got in trouble with their sexual dalliances running once again for public office. The first was the former Governor of South Carolina Mark Sanford who lied to the people saying he was out of the office camping in the woods when he was in South America with his paramour. Next we have Eliot Spitzer who paid for expensive prostitutes using state money and finally Anthony Wiener who left office in disgrace having put pictures of his private parts on the Internet. The all-star of course was President Clinton who was messing around in the Oval Office while talking to a Congressman on the phone. All of these guys came out with public apologies and were forgiven. Now on to the story of Mayor Smith, who lived in a medium size Midwestern town. Things were in bad shape when he took office 8 years ago but today it is a different story. Everyone who wants a job has one and it pays a living wage. Graduation rates are up and dropout rates are down. Taxes are the lowest in history. There are two new fire houses and a new police station. Domestic violence is practically non-existent and crime rates are down as well as divorce rates. Mayor Smith is a shoe in for his upcoming third term and everyone loves him. The fact that he murdered his wife is not a problem since he apologized and after all that has nothing to do with his job. Isn’t everyone is entitled to a second chance?

Washington DC

One of the areas that have benefited the most from the federal government spending has been the region surrounding Washington DC. The city itself is like a tale of two cities with one forth growing and prospering and three fourths filled with unemployed and low income minorities. Wallmart in cooperation with the mayor did an extensive study including polling the residence and made the decision to build 6 stores in the underprivileged part of town. One of the things learned in the survey was that there were not enough grocery stores in these neighborhoods. Now after three years of planning and three stores under construction the city council has passed a law saying that large stores like Wal-Mart must pay their employees $12.50 per hour. Wal-Mart has stated that they would not come into the city under these circumstances and the council does not care. This same thing has happened in other big cities and in each case Wal-Mart pulled out. These stores not only provide low cost items but there are 1,800 jobs at stake plus the local property taxes that these stores would pay. At this time it appears that the mayor who originally approached Wal-Mart will veto the council’s proposal and it will end but Wal-Mart may wonder what will happen if a new mayor is elected and pull out anyway. It is likely that courts would rule the law unconstitutional since it does not apply to all businesses. Wal-Mart was only allowed to start building in the nation’s capital after agreeing to a voluntary Community Partnership Initiative, in which the chain vowed to contribute $21 million to local charities, stock local products, allow space for local retailers, fund transportation measures, and create a citywide job training program for low-income and at-risk residents, among other conditions.

Obamacare fraud

Since I do income tax for AARP each year, I am familiar with the tax rules regarding child tax credit and earned income credit. Both of these programs have been abused and have led to fraud on a wide spread scale. The IRS routinely issues Individual Taxpayer Identification Numbers (ITIN) to people who file tax returns but who are not eligible to work in the United States, and that is another whole subject. When filing many file as parents and receive a $1,000 tax credit for each child. It comes in two ways. First if you own $2,000 in tax and you have three children you do not have to pay any tax. You also get a refund of $1,000 through the additional tax credit rule giving you a refund even though you didn’t pay any tax. If you have five children and you owe zero tax you can collect a $5,000 refund through the additional child tax credit. As you might expect this has led to a lot of cheating. A 2011 Treasury Department study found the IRS paid illegal immigrants $4.2 billion in Additional Child Tax Credit refunds in 2010, representing nearly one-fifth of all ACTC refunds paid that year. A similar situation occurred with the earned income credit which offers up to $5,700 in credits on deductions The Earned Income Credit is a federal welfare program. As the notice explained - “Unlike most deductions and credits, the EITC is refundable –– taxpayers can get it even if they owe no tax. For 2011 tax returns, the maximum credit will be $5,751.” It is probably the most expensive federal welfare program. The notice further pointed out that – “For 2009, over 26 million people received nearly $59 billion through the EITC.” Because it is refundable the Earned Income Credit is a magnet for tax fraud. That brings us to the latest change in Obamacare announced this weekend. This program is designed to offer subsidies to low income people to help pay for health insurance but the government is not prepared to check on these people so they will accept their word that they are eligible . This subsidy is refundable meaning you get it even if you don’t pay any tax and the subsidies are paid on a declining scale up to a family income of $94,000 per year. For a family earning $40,000 the credit is $16,000 so this is a much larger program that either the child tax credit or the low income credit so the fraud is likely to be larger. The reason for doing this is to get more people to sign up so the program will become a part of family life and difficult to repeal. The question remains as to how many of those who sign up are legitimate?

Obamacare

As the problems in implementing Obama care continue to mount the program is beginning to cause trouble for the upcoming midterm elections and so the President did the political thing by announcing that the program will be delayed a year or until after the elections. Some people are so opposed to this program that they will go to extremes to interfere with the instillation and others are so in favor that they will accept any plan no matter how flawed. Maybe after the election some sort of adjustments can be made to come up with a workable plan but it seems that what we have now is not good enough and it is going to take more than tweeking.

Oil and gas

The US government has invested about 60 billion in renewable energy experiments and we have little to show for it. There are 700,000 semi’s on the road and it cost about $20,000 to convert a truck from diesel to natural gas and that comes to 14 billion. In addition there are 10,000 truck stops and it would take about $500,000 to get them setup to sell natural gas and that cost another 5 billion. By doing this we would use 500 million barrels of oil less each year and that is what we import from Saudi Arabia. The cost savings to each truck owner would be about $20,000 per year and CO2 emissions would be 70% less. In addition other contaminants like oxides of sulfur and nitrogen are almost eliminated. Is our government investing in the wrong area?

Evil

I found your discussion of the devil quite interesting as this is something I have given considerable thought to over the years. Keeping in mind that my ideas on significant matters tend to evolve over the years, so what I think today may not be the same in the future but as of now I have concluded that there is no devil. Rest assured that I understand there is plenty of evil in the world and it comes in large and small doses. While the big events like the Holocaust get plenty of attention, I think of the dad who calls out to his son when he drops the ball that he plays like a girl or the mom who tells her daughter that she will never amount to anything as examples of evil. As far as the mentally disturbed guy in the bible lesson, I never equate evil with mental illness and up until you mentioned it, I hadn’t given to much thought to degrees of evil. I will have to think some more on that.E

divorce

Many years ago a man named Jim married and had three sons. Jim’s father had a bad temper and Jim inherited that trait. He was nice enough most of the time but when something set him off he would go into a rage and after a time he would settle down and things would return to normal. When Jim was growing up he witnessed this behavior in his father and came to believe that this was the way the world operated. This is the story of what we call today a dysfunctional family. As an adult Jim found himself acting like his father and he just assumed that this was his lot in life, that there was nothing he could do about it and besides this gave him a good reason to excuse his behavior. Since our children are influenced by our behavior it was not surprising that Jim’s three boys became fathers like him. Recent studies have shown that people can change inherited personality traits but not many people are willing to put forth the effort needed to make such changes. Since these fathers were unwilling to make the changes necessary they were doomed to pass on the behavior. One day one of Jim’s grandsons married and had a son. His wife, however, understood that children watch their parents and she refused to live under such circumstances and became estranged from her husband. They lived together but there were no more temper tantrums and their son never witnessed the spontaneous rage. When he grew up he married and had some children but the inherited rage had been decoupled and was no longer passed on. There are times like this, when the father is unwilling to make the needed changes, the mother must step in and force this issue. The mother had to weigh the downside to have a cool relationship between her and her husband against the disruptive influence of temper outburst and she made her decision. Like most things in this life we will never know the long term results but something had to change. I suspect if someone could have talked with the father and explained how his daughters will marry men like him and his sons would treat their wives like him, he might have been willing to do the work needed to change but no one ever pointed this out to him. Then again, even if it had been explained to him, he still may not have changed.

Profiling

You have just taken the job as Police Chief in a midsize town and the people complain that there is too much drug traffic. You recall some years back in your previous job that you set up a road block to check for safety features on cars and in the process arrested a number of drunk drivers. This could be used to determine if there is a drug problem so you set up such a test. You cannot stop all cars as this would result in a traffic jam so you send your assistant up the road and tell him to randomly select cars and radio you which to pull over. He knows that the purpose is to look for possible drug dealers so he sets up to observe the cars. The first car is a Lincoln Town Car with and elderly couple. The second is a Volkswagen with two nuns. The third is a van with mom and dad and four small children and the forth is a Mercedes with a young man wearing a gold chain. Your assistant tells you to pull over the Mercedes. Take a moment to think this over and then see if your thoughts on the plan change when I tell you that the driver of the Mercedes is black. Does anything change in your thought process? You are the new Police Chief in town and the people complain that crime is on the rise and want you to take action. You check the police records and discover that 40% of the crimes are committed in an area that represents only 10% of the city. With that in mind you put 40% of your officers in this area and soon you are making lots of arrest and the crime rate begins to drop. After several months it is pointed out that almost half of the people arrested are black even though the black population of the city is only 10%. Do these statistics prove that you are discriminating against blacks. In this day of political correctness can statistical facts be used to prove discrimination? If I say that 40% of men in prison are black, and blacks represent 12% of the population is that a prejudicial statement. If statistics show that 50% of murders are committed by blacks and 95% of these are black on black, is that a prejudicial statement? The question I am posing has to do with what the listener hears. If I make a statement of fact and the listener feels that it shows a bias, should I refrain from making such statements out of concern for that other person. If I answer yes to this question then I have to get inside the head of the listener to try and understand where he is coming from. As a responsible person who is concerned about the feelings of others is this something I should do?

Health care

One possible solution to the health care problem The problem with the private health care system is two-fold. First is the rapidly rising cost of health insurance and second the many people who cannot afford insurance. In solving the first problem we first look at the existing system. About 85% of people are currently insured and most through their employer. Polls show that these people are satisfied with their coverage but unhappy with the ever increasing cost. The question to ask, is why is the cost rising faster than the inflation rate and the answer is the concept of the third party payer. To understand this concept, consider having a food insurance company. You pay a monthly premium for your insurance and you are issued an insurance card that you present at the super market when you make your purchases. The supermarket sends a bill to the food insurance company. As time passes you will become more and more concerned with the quality of food and the location of the store and less concerned with the price. Most people have either experienced or know someone who has experienced the hospital bill with four dollar aspirin or a two dollar cotton ball and laughed it off as ridiculous. Since the bill is paid by a third party it is not important and therein lays the reason why health cost rise faster than inflation. So how can this situation be remedied? To answer that we look at a typical employer plan. Company A pays $20,000 per year for a family plan which has a small deductible, a co-pay and a stop loss. The company decides to introduce a plan that has a high annual deductible say $10,000 per family. This means that every family is responsible for the first $10,000 of annual health care cost and the company plan covers everything above that at 100% with no limit. A plan like this will cost the company about $5000 per year so they take part of the savings and set up a tax deferred health savings account for each employee and agree to put $10,000 per year into that account. The employee is now responsible for how they spend their health care dollars. Any amount that is left over at the end of the year remains in their account and continues to grow and at retirement they can use the money for whatever they choose. This now introduces the free market into the health care business. When a person is in need of health care they will shop around like they do for other purchases and this brings in the market forces. An example of how this works is laser surgery which is not covered by insurance. Not too many years ago this procedure cost over $5,000 and today it is $500. This is how competition works to bring down prices. The administrative cost under the current system is 25 to 30 percent which equates to 650 billion dollars per year. Since 95% of all claims are for less than $10,000 the proposed plan will eliminate 95% of all paper work and save over 600 billion dollars per year. This savings comes from the elimination of 10 million jobs in the insurance industry. These people have at least high school degrees and most are computer literate and will over time find new jobs especially in an expanding economy. When a physician is paid like any other service and no longer has to wait three months for a check from the insurance company and when he no longer has to have person on staff just to handle insurance claims he can charge less. When clinics and hospitals no longer have rooms full of people handling paper work they can charge less. There will be one company, something like Blue Cross, which will handle the over $10,000 claims. The second part of the problem was the 15% who are not insured. These roughly 50 million people fall into four mostly equal categories. 12 million are young people who are working and can afford to buy insurance but do not do so believing that they are indestructible. They will be encouraged to purchase health care using anyone of a number of ways. The next 12 million are people who are eligible for Medicaid but do not sign up because there is a small cost and since there are no preexisting conditions they can just wait until they get sick and then sign up. They can be brought into the system by introducing a 30 day waiting period. The next group is illegal aliens and they will continue to use the emergency room until they are either made legal or deported. The final 12 million need some government assistance and that will be based on income. At an average cost of $20,000 per year for a family plan this will cost $240 billion and for the additional people going into Medicaid add in another $240 billion. This money comes from the paper work savings of 600 billion leaving 120 billion left over.

Lottery

The recent lottery winner in Florida won 590 million and chose to take 370 million up front instead of 22.7 million per year over the next 26years. The reason for this has to do with estate taxes. If you accept annual payments and die before the 26 years are up your estate must pay tax on the amount you are expected to receive over the remaining years. Example. 590 million winnings 370 million up front Federal income tax (39.5% plus 3.8% special Medicare tax plus 9.85% MN state income tax) for a total tax of 53.2%. This lowers the 370 million to 173 million. If she were to die then the federal estate tax would be 40% and state estate tax 16% so her estate would net $76 million, a tidy sum I admit but a long way from the $590. Estate tax is due within 90 days of death and must be paid in full. If she had been receiving annual payments her estate would not have the money to pay the tax since all future expected benefits would be subject to estate tax in the year of death.

Welfare a way of life

One of the reasons I voted for Bill Clinton was him saying that welfare should be a helping hand and not a way of life. When someone loses their job because of a layoff or downsizing or accident or illness they need help and that is why we have a safety net that provides the helping hand of unemployment benefits. If a 16 year old girl has a baby and her mother had her when she was 16 and grandma had mom when she was 16 and we end up with 40 years on welfare is that a helping hand or a way of life. If my employer deducts the money for my salary and the money going into my pension and the money for my health insurance and I deduct the interest on my mortgage and I get tax credits for making home improvements and I deduct my IRA and the government pays for three fifths of my education is that a helping hand or a way of life. My friend is a farmer and he deducts the cost of his equipment, the cost of seed, fertilizer, fuel, herbicides, pesticides and the government pays him not go grow crops. Is that a helping hand or a way of life. I believe that the income tax system is one way that government help leads to a way of life. With the recent scandals with the IRS, perhaps it’s time to quit worrying about the girl on welfare and start doing something about our tax system. The IRS is a perfect example of the old adage that power corrupts.

Student loans

I went to college in the 50’s when most of us worked full time and went to school part time. We were called SOTA’s or students older than average. I majored in Chemistry and had 44 semester hours of Chemistry courses, ten hours of Physics and 20 hours of math along with the electives. The country is in need of science and engineering grads and I propose a new degree called a BA Tech. You would only take the required technical courses and be able to graduate in four years or less. Chemistry courses, like most majors, must be taken in sequence thus the need for four years. A person could work full time and take 8 or 9 hours each semester. Now days many serious students take AP course in high school and could complete some of the math and even first year Chemistry and graduate in three years. When I finished I had a job with nine years work experience and money in the bank. This would eliminate the need for student loans. I am writing to ask if this is possible and if so what do you think of the idea.

Powers nudge

Samatha Powers will be nominated to replace Susan Rice as Ambassador to the United Nations. Her most recent claim to fame is being what she called a “humanitarian hawk” and she used this to convince Obama to go to war in Libya. The concept is that many innocent people would be killed if we did not intervene. The same thing could be said of events in Syria but we are staying out of that fight. More important is Powers husband a man by the name of Cass Sunstein. He represents the thinking of many liberals in that he believes that people cannot take care of themselves and need the help of both private and public entities to guide them through life. One of his more recent books explores this idea through a plan called, “nudge”. He believes that people left to themselves will make bad choices and need to be nudged in the right direction. Sunstein co-authored Nudge: Improving Decisions about Health, Wealth, and Happiness (Yale University Press, 2008) with economist Richard Thaler of the University of Chicago. Nudge discusses how public and private organizations can help people make better choices in their daily lives. Thaler and Sunstein argue that People often make poor choices – and look back at them with bafflement! We do this because as human beings, we all are susceptible to a wide array of routine biases that can lead to an equally wide array of embarrassing blunders in education, personal finance, health care, mortgages and credit cards, happiness, and even the planet itself. It reminds me of that old saying, don’t worry I’m from the government and I’m here to help. I always thought of that as a joke but he thinks it’s real. Now I am worried.

Good life

The recent news about a Fox reporter who was accused of being a co-conspirator was not a surprise to those in government. Apparently it is a common practice to exaggerate the potential crime in order to convince a judge to approve a search. The government says they had no intention of prosecuting but only made the claim to make it easier for the judge to issue the order. This reminded me of Al Gore when he was asked about some of the misinformation in his book and he responded by saying that it was necessary to exaggerate in order to sell the book. Ah, the ways of government!

fast track education

It is a fact that the country is short in math and science majors and the shortage will be worse in the coming years. There are many SOTA’s (students older than average) out there who could use a easier path to a degree to save time and money. I propose a special degree that just focuses on core courses. I majored in Chemistry and took 44 hours of Chemistry, 20 hours of math and 10 hours of Physics. Since Chemistry courses are best taken one after the other it would still take four years but it would be less than 10 hours per semester which would give students time to work and not have to go into debt with student loans. Does this idea have any merit?

corruption

In the past I have suggested that what people dislike the most about big business and big government is legalized corruption and here is one more example. John Thain was President of the New York Stock Exchange and was offered the job as CEO and Chairmen of Merrill Lynch. He got a 15 million dollar sign up bonus and would earn between 50 and 120 million per year depending on performance. !4 months later the company was going broke and was force to sell to Bank of America. They did not want to buy but Hank Paulson, Secretary of the Treasury, said he would give them the money. Just prior to the sale Thain paid out 4 billion in bonuses to 700 executives who were their when the company went down the drain, the top four of whom received 221 million. This money came from taxpayers by way of gifts to Bank of America. After the sale Thain asked for an extra 10 million as a special bonus for having sold the company but this was called a scandal and he withdrew his request. He left the company an accepted a top position with Commercial Investment Trust where he remains today.

women the breadwinners

New statistics show that in 40% of households, the woman is the primary breadwinner. Most of these are single parent homes but an increasing number represent two parent homes where the woman earns more than her partner. This has caused some consternation among men over 50 since they feel that the man should be the bread winner but for younger men they are happy to have the extra income. While this may seem silly to some women, many of these same women say they would be uncomfortable if their partner was shorter than they are. Is that silly?

Kennedy Obama

I heard on the news that today is John Kennedy’s birthday and I was struck with the similarities between Kennedy and Obama and how there is one big difference separating the two. First off they were both very inexperienced senators when they became president. They were both in their early 40”s, both performed well on TV, both were great campaigners, both were outstanding public speakers, both had democratic congresses that they could not get along with and both were charismatic figures. The big difference was Vice President Lynden Johnson. He could move anything through the congress and all the credit went to Kennedy.

Libya

I recall that when Obama decided to go into Libya he was following the advice of three women. Hilary Clinton, Susan Rich and Samantha Powers. It was Powers who coined the phrase humanitarian hawk meaning that we could use military force to prevent the mass killing of civilians. In March of 2011 Obama gave a speech in which he outlined his reason for going into Libya. Obama was clear enough, to be sure, about why he chose to intervene in Libya. With Muammar Gaddafi’s army outside Benghazi, Obama said, the Libyan leader was prepared to commit “a massacre that would have reverberated across the region and stained the conscience of the world.” That would have been not just a moral abomination, the President argued, but also a strategic calamity that could have sent droves of refugees into Egypt and Tunisia, straining those countries’ fragile transitions; it would also have sent a message to other tyrants that “violence is the best strategy to cling to power.” Moreover, Obama said that to allow Gaddafi to defy the U.N. would be “crippling [to] its future credibility.” Less than one year after Libya Obama was faced with Syria. A dictator, who has killed thousands of his own people and sent millions into refugee camps in Jordan and Turkey, remains in power while Obama does nothing. The whole situation is very much like Libya including the UN’s credibility but we are reacting in a much different way. Does this send any kind of message

economy

The economy is finally coming around and one of the big reasons is fracking. This new process for getting oil and natural gas has created new jobs not just in the energy business but in other areas surrounding energy. As the price of natural gas continues to decline, this will help the bottom lines of many other manufacturing businesses and this will add more jobs and all of these jobs will help the housing market to recover. Add to this the increase in payroll tax, a tax on the poor, and the combination of increased growth and increased taxes will lower the deficit. There is room for some irony when you realize that the President will get credit for these changes even though they come mainly from fossil fuels and taxing the poor and middle class. As one might expect the two percent increase in payroll tax will bring in more money than the so called millionaires tax since there are so many poor and middle income people, many of who pay no income tax. In addition, miracle of miracles, the federal spending actually decreased by 1.9% thanks or no thanks, depending on your view to the sequester. Next job is to work on entitlements. Maybe there is a grand bargain down the road following the Bolls/Simpson plan.

education

While the call for better education is a bi-partisan cry, the achievement gap remains unchanged. This is a touchy subject and those who discuss it are often called racist. The latest reason given is that minority students often go to school hungry and this adversely affects their mental prowess. Logic tells me there is something to this but there are other more important factors. One is the cultural aspects. One example is the feeling that getting good grades is being white. This is akin to days past when girls would dumb themselves down in order to be more attractive to boys. Other important factors are social in nature, things like single parent families, single parents who have little experience with school, do very little reading and have minimal math skills. Many minority students are trapped in poor performing schools where discipline is a daily problem and often that stems from no father in the house. These factors combine to cause lack of confidence and an underlying belief that they cannot learn like white kids. This whole process was aptly explained by President Bush when he said, “the soft bigotry of low expectations

rich get richer

Here is another short story on how the rich get richer. Hank Paulson was CEO at Goldman Sachs and when he left to become Secretary of the Treasury he had to sell his Goldman stock. There are divestiture rules that forced him to sell his Goldman stock to avoid any conflict of interest. The sale netted him 500 million of which 20% or 100 million would be taxed as capital gain tax. However there is a part of the tax law that says you can postpone payment of this tax if you invest the money in certain accounts and receive a certificate of divestiture from the government. As long as he allows that money to remain in these accounts he does not have to pay the 100 million in capital gains tax. At 5% he earns 5 million per year on the government’s money. Some people wondered why he would take a job paying $183,000 per year and my guess is he wanted the power but he also made out pretty good on the money end.

Commercial bank

A commercial bank, the kind you and I deal with must retain ten percent of its assets but can loan out the other 90%. This 10% is called the reserve requirement and can be changed by the government. About 15 years ago banks developed something called Structured Investment Vehicles (SIV) in order to get around the reserve requirement. They would borrow short term money called commercial paper and put that into an account off the books. Then they would use that money to purchase longer term investments that paid a higher rate of return. They made a profit on the spread between what they paid on the borrowed money and what they earned in the invested money. This is what banks in general do but they use depositor’s money to loan out and in that case it is all on the books and is governed by the reserve requirement rules. Commercial paper is not backed by assets only a promise to pay so they can get as much as their reputation will allow. These loans last only up to 270 days and then they are rolled over. As the bank uses more of these loans the lenders become more comfortable and the loan amounts grow. When mortgage companies began to bundle home mortgages called Asset Backed Securities (ABS) that were paying a tempting interest rate the SIV’s began to purchase them to increase their spread. While the bank paid most of the spread to investors who bought the mortgage bundles they got a fee every time they made a sale. Since the banks access to commercial paper was almost limitless they could take on all the mortgages that were brought in and since they were making handsome fees they encouraged mortgage brokers to bring in all they could. While off the books investing is , in and of itself, it got a lot worse because of leveraging. The bank that had $100 million to buy mortgage bundles could in fact buy more than that using leverage like banks do in making loans with depositors money but with this money there were no reserve requirements so they were not limited to the 10% requirement. So the bank with $100 million could in fact purchase $1.5 billion in mortgage backed securities and some many times higher than that

Government

It is generally assumed that conservatives prefer less government and liberals more, but this is often exaggerated to the point where you are either for or against government. If the government does nothing you have lawlessness and if the government does everything you have socialism and most people want neither of these extremes. My idea of how much government should do, will likely be different than your idea and the country has vacillated around the middle of the road. I voted for Bill Clinton for a number of reasons but one was when he said that welfare should be a helping hand and not a way of life. During my time I have received government help from various sources. For example when I worked my company was allowed to deduct payments to me which indirectly means that the government was instrumental in paying for my salary, my pension and my health insurance. When I deduct the interest on my home loan the government is paying for part of my house payment. I attended a state university which means that the government paid for 3/5ths of my education. If a person loses their job for reasons beyond their control it is OK to help them with unemployment benefits but should they last for 26 weeks like they used to or up to 99 weeks as they do now. How about 5 or 10 years? When does the helping hand become a way of life. What about the 16 year old mom who lives off the government because her mom did it when she was 16 and her grandma did it when she was a teen? After three generations is this a way of life? Does the fact that I worked and paid taxes all my life make my government benefits different than 40 years of moms living on welfare and never working. What about moms on welfare who work?

Third Party Payer

The current IRS scandal has brought Obamacare in the news and through all the clutter, I heard a talking head bring up the idea of healthcare and the problem of third party payer. This has prompted me to once again put forth my solution to healthcare. The problem with healthcare is two fold. First is the 15% who are not insured and second is the escalating cost. I will resolve these starting with the uninsured. There are about 48 million in that category and they are in four approximately equal groups. The first are the young single people who can afford insurance but do not buy it thinking they are invincible. The second are those who are eligible for Medicaid but do not sign up as there is a small charge and since there are no pre-existing conditions they can just wait until they get sick and sign up. Third are the illegal aliens and forth are 12 million who need help. The first group can be coerced into buying using any one of several methods. The second will purchase Medicare if you put in a 30 day waiting period before the policy kicks in. The illegal aliens will continue to use the emergency room until such time as we resolve the immigration problem and the forth will need government assistance. This will cost about $20,000 per year per person and to cover the 12 million will take 240 billion per year. Keep that figure in mind, as I will show how to pay later. The second part of the problem is the high cost of health care and first we must determine the reason that health care cost rise more rapidly than the cost of living. The answer to that can be given in three words, THIRD PARTY PAYER. In order to understand this, consider having a food insurance plan. You pay the food insurance company a monthly premium and with your ID card in hand, you prance off to the supermarket where you proceed to pay for your groceries using your food insurance card. As time passes you will become more and more concerned with the quality of the food and the location of the store and less and less interested in the cost of the food. Have you ever heard someone discussing their hospital bill and laughing about the 4 dollar aspirin or the 2 dollar cotton ball. While this is not a funny matter most don’t get too excited about it since they do not pay directly for the service and therein lies the problem. As long as a third party is paying, the cost does not seem important. So how do we get rid of the third party payer? First let’s talk about the 85% of people who are currently insured and in particular those who are insured through their employer. Polls show that these people are happy with their health insurance except for the rising cost. A typical family plan cost about $20,000 per year and contains a small deductible, a co-pay and a stop loss. The company announces that they are going to a major medical type plan and each employee will be responsible for the first $10,000 of family medical expenses each year. The company says they can get a $10,000 deductible plan at a cost of $5,000 instead of $20,000 for a savings of $15,000 per year. The company will then put $10,000 into each employee’s private health care account and this is the money that will be used to cover expenses. In any year where the total family expenses exceed this amount the insurance will cover the rest with no upper limit. Any unused funds will remain in the employees account and can be used to supplement their retirement. The money will be placed into the account on a tax-deferred bases and taxes will be paid at retirement unless used for medical reasons. Now let’s examine how this affects the employee. First off they realize that any money they save is theirs so when they go to purchase medical care they will do so as a consumer and begin to look at the cost and quality and make free market decisions. If a child requires an operation the consumer will evaluate the quality of the doctor and hospital along with the cost and suddenly market forces will take over. A good example of how this works is in laser surgery. Insurance does not cover this and when it first came out 20 years ago the cost was $5,000 and today it is less than $500. The employee is now buying medical care with the same purchasing philosophy that they use for all of their other purchases. How does this affect the doctor and the hospital. You pay your doctor for services rendered using your credit card. He has no paper work and doesn’t have to fight with the insurance company and wait three months to get paid. He no longer pays a person in his office to fill out forms. The hospital or clinic no longer has a room full of people filling out forms. The reason is that 95% of all claims are for less than $10,000 and so we have eliminated 95% of the paper work or what is called administrative cost. It is estimated that this paper work represents 25% of the cost of health care, which means a savings of over 600 billion dollars per year. This is enough money to cover the cost of the 12 million uninsured and have a tidy sum left over. One private nationwide insurance company will remain in business to handle the over $10,000 claims. Each family will keep track of their medical expense and for any amounts exceeding $10,000 they will submit an annual claim to this company. Many times government planners say they will pay for some new program by cutting the fat out of government and while I have heard that claim my entire life the government has only gotten fatter. Now since there is no free lunch where does this 600 billion in savings come from? The answer is that 10 million people in the insurance business will be out of work at $60,000 per year per person. These people have at a minimum a high school education and most are computer literate so they will find work in other areas. The main reason this idea has not caught on is that the insurance industry does not want to go out of business but as more problems develop in Obamacare this idea gains momentum. That is why the talking head suddenly brought it up and why it will increase in popularity as more people hear about it.

wages and fairness

Two distinctly different issues currently making headlines, have reached a convergence. The first is the manufacturing of inexpensive clothes in countries like Pakistan and the second is the attempt to unionize fast food places. Both of these issues center around the willingness of American consumers to pay more for products based on some moral concept surrounding the production of these products. If you raise the price of items sold in a fast food restaurant by one-third you can double the wages of the employees. This means that a $3 dollar item raised to $4 dollars would increase wages from $8 to $16. In the case of Pakistan the wages there would increase five-fold if you raised the price of garments by one-third. A five dollar shirt selling for $6.50 would increase the hourly wage from 24 cents to over one dollar. If Americans knew these facts would they be willing to pay more? We have some experience with this and that is Wal-Mart where low prices are the big attraction and most of the products sold there are produced overseas. If every low price store increased their prices by one-third it would not mean much but if only Wal-Mart did that and not their competitors it would make a difference. The people who currently shop at Wal-Mart are the ones who are most hurt by low wages but it doesn’t seem to matter to them. Is it a wise thing in a market economy to introduce the moral issue of using who makes how much to set the price? You can expand on this by asking if it is reasonable that some people like CEO’s, sports figures and movie stars should make millions while other millions make minimum wage? If the average family income in the United States is $50,000 shouldn’t everyone make $50,000? These kinds of questions have inspired renewed interest with the Presidents emphasis on fairness.

single issue voter

When the subjects of gun control or abortion come up, people often refer to these as single issue voters. These people are so wrapped up in one particular subject that they will overlook the other issues. I have a personal experience that illustrates this idea to the extreme. I had a friend who was the head of the Philosophy Department at UND who decided to run for state representative. He asked me if I would be on his campaign, not because I was politically astute but he needed someone to get donors and he didn’t like to ask people for money. It is ironic in one way, since he didn’t mind asking for their vote? This guy was very liberal and I quickly found out that his single issue was world disarmament as we were still involved in the cold war. I told him that while I felt disarmament was important that it is an unlikely goal for a state representative from North Dakota. With that we parted ways. He did not win the election but in the early 90’s he retired and moved to a cabin in the woods in Wisconsin to carry on his fight for disarmament. He retired in his early 60’s and was in good health but the cold war ended shortly after he retired and a year later he died. I always felt he died because his purpose for living died. No that is what I call a single issue guy.

free press

When the founding fathers set up the constitution, one of their major concerns was to restrict the power of the federal government. The best example of this is the first amendment which provides for a free press. They envisioned the free press as a watch dog that would expose abuse of power. This remained the objected of the press until the early 1900’s when a man by the name of Finley Peter Dunne coined the phrase, comfort the afflicted and afflict the comfortable”, when he referred to the media. This broadened the press area from government to non –government business. It soon became apparent that the comfortable were the rich both as individuals and corporations. The other side to comfort the afflicted came to mean the poor. This whole process developed into what some called class warfare and soon the Democratic Party became known as the party of the poor and all of the Avant-garde reporters became defenders of the poor and by default defenders of the Democratic Party. This process continued until the 1960’s when the democrats realized that the poor didn’t vote so they became the party of the middle class and this is best exemplified by President Obama’s continuous reference to his concern for the middle class. I do not question his desire to help the middle class but in looking at the results over the past five years I don’t see any improvements. While the stock market is rising and Wall Street along with the Big Banks have seen government money pouring into their coffers the middle class has seen high unemployment and stagnant wages. My mother used to say, the poor get poorer and the rich get richer and that seems to be the case.

fired or change jobs

When the incident in Benghazi hit the news, Hilary Clinton said that Head of Diplomatic Security, Eric Boswell had resigned. Later it was discovered that while he resigned from that position he was still employed by the State Department in another job. Victoria Nuland, told us that Eric Boswell, Assistant Secretary of Diplomatic Security resigned after the report was made public. Deputy Assistant Secretary for Diplomatic Security, Charlene Lamb, and two others were supposedly placed on administrative leave for their “inadequate” responses to “security-related requests.” The four of them are back at work after what Senator Ros-Lehtinen called a “shuffling of the deck chairs.” Today The President announced that the head of the IRS Miller turned in his resignation. I will follow to see what happens next.