Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Tuesday, March 19, 2013

The Chart That Proves That The Mainstream Media Is Lying To You About Unemployment

We're in a recovery, right?  The unemployment rate is going down, right?  Wrong.  The media are (yes, I prefer the Latin usage) lying to you.

From The Economic Collapse Blog:
"The Chart That Proves That The Mainstream Media Is Lying To You About Unemployment" by Michael
The mainstream media is absolutely giddy that the U.S. unemployment rate has hit a "four-year low" of 7.7 percent.  But is unemployment in the United States actually going down?  After all, you would think that it should be.  The Obama administration has "borrowed" more than 6 trillion dollars from future generations of Americans, interest rates have been pushed to all-time lows, and the Federal Reserve has been wildly printing more money in a desperate attempt to "stimulate" the economy.  So have those efforts been successful?  Well, according to the mainstream media, the U.S. unemployment rate is falling steadily.  Headlines all over the nation boldly declared that "236,000 jobs" were added to the economy in February, but what they didn't tell you was that the number of Americans "not in the labor force" rose by 296,000.  And that is how they are getting the unemployment rate to go down - by pretending that huge numbers of unemployed Americans don't want jobs.  Sadly, as you will see below, the truth is that the percentage of working age Americans that have a job is just 0.1% higher than it was exactly three years ago.  And we have not even come close to getting back to where we were before the last economic crisis.  For example, more than 146 million Americans were employed back in 2007.  But today, only 142.2 million Americans have a job even though our population has grown steadily since then.  So where in the world is this "economic recovery" that they keep talking about?
At this point, the "unemployment rate" has become so meaningless that it really isn't even worth paying much attention to.  If you really want to know what the employment picture looks like in the United States, you need to look at the employment-population ratio.
...the percentage of Americans with a job fell from about 63 percent to below 59 percent during the last economic crisis.  Since that time, it has not risen back above 59 percent.  This is the first time in the post-World War II era that we have not seen the employment rate bounce back following a recession.  At this point, the employment-population ratio has been below 59 percent for 42 months in a row.
Just consider these numbers...
-The number of homeless people sleeping in homeless shelters in New York City has increased by 19 percent over the past year.
-The number of Americans on food stamps has risen from 32 million to 47 million while Barack Obama has been in the White House.
-According to the U.S. Census Bureau, more than 146 million Americans are either "poor" or "low income" at this point.
-Median household income in the United States has fallen for four consecutive years.
No, the truth is that everything is most definitely not fine.
If everything is fine, then why did the Federal Reserve inject another 100 billion dollars into foreign banks during the last full week of February?
Bottom line: You can't trust a word that our government tells us.  They are only interested in propping themselves up to stay in power.  Nothing more.

Thursday, January 10, 2013

Tax Policy and Behavior

We've all heard it a bunch of times.  "Rich" people don't care about taxes, they're happy to pay them.  Well, not surprisingly, that notion is complete bullshit.  Consider these two articles, one of which shows the hypocrisy of an Obama supporter.


From the Wall Street Journal:
"Review & Outlook: Costco's Dividend Tax Epiphany"

"To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time."


From the Telegraph:
"Two-thirds of millionaires left Britain to avoid 50p tax rate:

Oops, looks like this link has gone stale.  The title tells the story, though.

Thursday, January 3, 2013

Are the Republicans Serious??? Let's Focus on SPENDING.

Spending.  What does it mean?  Why do we do so much of it?  This post is about spending.  I've gone through and tried to highlight all instances of this word.  You'll see why later in this post.  I guess I'm going to pay special attention to this word, to this concept, because the Republicans sure as hell don't.  And you know the Democrats certainly don't.


I'm still bothered by the "deal" that passed the Senate, then the House, and was then signed by the President.  I still can't believe that we got a tax increase, and no spending cuts.  Amazing.  Here are the details, along with some discussion:

First, from the Wall Street Journal:
"Obama's Tax Bill Comes Due"
http://online.wsj.com/article/SB10001424127887323820104578215400767461788.html

Let me focus on one quote from the article, which I'll come back to later in this post. 
But we hope the GOP has learned, after two failed attempts, that Mr. Obama is not someone with whom it can do a "grand bargain." Even as the Senate deal was taking shape, Mr. Obama gave a speech literally taunting Republicans for agreeing to raise tax rates. He also made clear that the price of any future spending cuts or entitlement reform will be another tax increase. He doesn't want to reform government. He wants to expand it and destroy GOP opposition to his agenda in the bargain.

And then from the Patriot Post:
"Raw Deal With Silver Linings"
http://patriotpost.us/editions/16100



Here's what all of the above means, though, why it really bothers me.  This speaks directly to the quote from the Wall Street Journal above.  The Democrats, from what I can tell, are probably laughing at the Republicans for raising taxes, for completely abandoning their stated goal, their party platform, to reduce spending.  Consider this comment from a co-worker:
Also, good to see that Republicans were never ever ever even a little bit serious about deficit reduction -- this was, and remains, about their fixation on lower taxes.
And that's the problem right there.  By caving, in the Republicans make it look like they only want to give tax breaks to the rich, that tax breaks are all they care about; they play right into the Democrat narrative.  There are actually two ways to interpret this statement, depending on your assessment of of the Republicans.  Are the Republicans incompetent or are they liars?  If they're incompetent, well, that would explain their total collapse in these negotiations.

But I fear that the problem is much deeper.  I think that they are liars.  (Well, maybe they're both.)  And that what my co-worker said was true, that they really do only care about tax cuts, but not larger economic issues.  If you agree to a deal that raises taxes, without getting ANY spending cuts, what exactly does that say about Republican priorities?  This is why I simply do not respect the Republican Party in general (yes, there are individual Republicans I do respect, of course).  They simply don't care about reducing spending.

Obama and the Democrats have succeeded in crushing the Republicans.  Not just by winning on this issue, but by skillfully exploiting a Republican weakness.  You see, they realize that the Republicans are not serious about reducing spending.  They have seen the Republicans raise the spending limit over and over again.  They know that Republicans, just like the Democrats themselves, don't give a damn about government spending. Once the Democrats realized that, they knew, beyond the shadow of a doubt, that they would win.

I think it came down to two camps within the Republican party.  There are those who are more concerned about taxes.  And those who are more concerned about spending.  I count myself in the latter camp.  I think spending is the root cause of the problem, and thus I think that is much more important to address.  Every bit of spending will eventually have to be paid for, if not by taxes then by debasing our currency.  Looks like many Republicans are okay with that.  I'm not.

For some better perspective on what happened, let's hear what Ron Paul had to say about it. Notice that the so-called "fiscal cliff" wouldn't have actually cut spending.  Seriously, you probably didn't know that if you listen to the mainstream media.  Two links for this, in case one goes stale.

From DailyPaul.com, posted on January 2, 2013:
"Ron Paul: We Are Already Over the Fiscal Cliff"
http://www.dailypaul.com/268329/ron-paul-statement-on-the-motion-to-concur-in-the-senate-amendments-to-hr-8

From Ron Paul's Facebook page, posted on January 2, 2013:
"Statement on the Motion to Concur in the Senate Amendments to H.R. 8"
"We Are Already Over the Fiscal Cliff"
https://www.facebook.com/ronpaul

I'm going to just quote the article in full because it's full of great points.
Ron Paul
Statement on the Motion to Concur in the Senate Amendments to H.R. 8

We Are Already Over the Fiscal Cliff

2 January 2013

Despite claims that the Administration and Congress saved America from the fiscal cliff with an early morning vote today, the fact is that government spending has already pushed Americans over the cliff. Only serious reductions in federal spending will stop the cliff dive from ending in a crash landing, yet the events of this past month show that most elected officials remain committed to expanding the welfare-warfare state.

While there was much hand-wringing over the “draconian” cuts that would be imposed by sequestration, in fact sequestration does not cut spending at all. Under the sequestration plan, government spending will increase by 1.6 trillion over the next eight years. Congress calls this a cut because without sequestration spending will increase by 1.7 trillion over the same time frame. Either way it is an increase in spending.

Yet even these minuscule cuts in the “projected rate of spending” were too much for Washington politicians to bear. The last minute “deal” was the worst of both worlds: higher taxes on nearly all Americans now and a promise to revisit these modest reductions in spending growth two months down the road. We were here before, when in 2011 Republicans demanded these automatic modest decreases in government growth down the road in exchange for a massive increase in the debt ceiling. As the time drew closer, both parties clamored to avoid even these modest moves.

Make no mistake: the spending addiction is a bipartisan problem. It is generally believed that one party refuses to accept any reductions in military spending while the other party refuses to accept any serious reductions in domestic welfare programs. In fact, both parties support increases in both military and domestic welfare spending. The two parties may disagree on some details of what kind of military or domestic welfare spending they favor, but they do agree that they both need to increase. This is what is called “bipartisanship” in Washington.

While the media played up the drama of the down-to-the-wire negotiations, there was never any real chance that a deal would not be worked out. It was just drama. That is how Washington operates. As it happened, a small handful of Congressional and Administration leaders gathered in the dark of the night behind closed doors to hammer out a deal that would be shoved down the throats of Members whose constituents had been told repeatedly that the world would end if this miniscule decrease in the rate of government spending was allowed to go through.

While many on both sides express satisfaction that this deal only increases taxes on the “rich,” most Americans will see more of their paycheck going to Washington because of the deal. The Tax Policy Center has estimated that 77 percent of Americans would see higher taxes because of the elimination of the payroll tax cut.

The arguments against the automatic “cuts” in military spending were particularly dishonest. Hawks on both sides warned of doom and gloom if, as the plan called for, the defense budget would have returned to 2007 levels of spending! Does anybody really believe that our defense spending was woefully inadequate just five years ago? And since 2007 we have been told that the wars in Iraq and Afghanistan are winding down. According to the Congressional Budget Office, over the next eight years military spending would increase 20 percent without the sequester and would increase 18 percent with the sequester. And this is what is called a dangerous reduction in defense spending?

Ironically, some of the members who are most vocal against tax increases and in favor of cuts to domestic spending are the biggest opponents of cutting a penny from the Pentagon budget. Over and over we were told of the hundreds of thousands of jobs that would be lost should military spending be returned to 2007 levels. Is it really healthy to think of our defense budget as a jobs program? Many of these allegedly free-market members sound more Keynesian than Paul Krugman when they praise the economic “stimulus” created by militarism.

As Chris Preble of the Cato Institute wrote recently, “It’s easy to focus exclusively on the companies and individuals hurt by the cuts and forget that the taxed wealth that funded them is being employed elsewhere.”

While Congress ultimately bears responsibility for deficit spending, we must never forget that the Federal Reserve is the chief enabler of deficit spending. Without a central bank eager to monetize the debt, Congress would be unable to fund the welfare-warfare state without imposing unacceptable levels of taxation on the American people. Of course, the Federal Reserve’s policies do impose an “inflation” tax on the American people; however, since this tax is hidden Congress does not fear the same public backlash it would experience if it directly raised income taxes.

I have little hope that a majority of Congress and the President will change their ways and support real spending reductions unless forced to by an economic crisis or by a change in people’s attitudes toward government. Fortunately, increasing numbers of Americans are awakening to the dangers posed by the growth of the welfare-warfare state. Hopefully this movement will continue to grow and force the politicians to reverse course before government spending, taxing, and inflation destroys our economy entirely.
Amen!  Very sad to see the perversion of the language, where people refer to a slight reduction in the rate of spending increases as a "cut."  Very sad to see that this is a bipartisan problem.  Sad to see Republicans using Keynesian economic language when it comes to their own pet interests.  Hypocrites.


Incidentally, the whole discussion above is symptomatic of a larger issue.  Republicans, like Democrats, do not care about excessive spending because the American people don't care about excessive spending.  We have the seen the enemy, and it is us.


Just for fun, now I'm going to dig into the Republican Party platform from 2012.  Enjoy the following links and quotes, and let me know whether you think the Republicans ever believed a word of this crap as they were writing it.

2012 Republican Platform
http://www.gop.com/2012-republican-platform_home/

Download the PDF of the platform, and do a search on "spending".  Here is what I found.
Many Americans have experienced the burden of lost jobs, lost homes, and lost hopes. Our middle class has felt that burden most acutely. Meanwhile, the federal government has expanded its size and scope, its borrowing and spending, its debt and deficit. Federalism is threatened and liberty retreats.
Except the Republicans don't stop the expansion of government when they have the opportunity.
The best jobs program is economic growth. We do not offer yet another made-in-Washington package of subsidies and spending to create temporary or artificial jobs. We want much more than that. We want a roaring job market to match a roaring economy. Instead, what this Administration has given us is 42 consecutive months of unemployment above 8 percent, the longest period of high unemployment since the Great Depression. Republicans will pursue free market policies that are the surest way to boost employment and create job growth and economic prosperity for all.
Except the Republicans don't pursue those policies.
In all the sections that follow, as well as elsewhere in this platform, we explain what must be done to achieve that goal. The tax system must be simplified. Government spending and regulation must be reined in.
Except the Republicans don't rein in spending and regulation.
Reining in Out-of-Control Spending, Balancing the Budget, and Ensuring Sound Monetary Policy
The massive federal government is structurally and financially broken. For decades it has been pushed beyond its core functions, increasing spending to unsustainable levels. Elected officials have overpromised and overspent, and now the bills are due. Unless we take dramatic action now, young Americans and their children will inherit an unprecedented legacy of enormous and unsustainable debt, with the interest alone consuming an ever-increasing portion of the country’s wealth.
Except the Republicans don't take dramatic action now.
In fiscal year 2011, spending reached $3.6 trillion, nearly a quarter of our gross domestic product. Adjusted for inflation, that’s more than three times its peak level in World War II, and almost half of every dollar spent was borrowed money. Three programs—Medicare, Medicaid, and Social Security— account for over 40 percent of total spending. While these levels of spending and debt are already harming job creation and growth, projections of future spending growth are nothing short of catastrophic, both economically and socially. And those dire projections do not include the fiscal nightmare of Obamacare, with over $1 trillion in new taxes, multiple mandates, and a crushing price tag. We can preempt the debt explosion. Backed by a Republican Senate and House, our next President will propose immediate reductions in federal spending, as a down payment on the much larger task of long-range fiscal control. We suggest a tripartite test for every federal activity. First, is it within the constitutional scope of the federal government? Second, is it effective and absolutely necessary? And third, is it sufficiently important to justify borrowing, especially foreign borrowing, to fund it? Against those standards we will measure programs from international population control to California’s federally subsidized high-speed train to nowhere, and terminate programs that don’t measure up.
Except the Republicans don't propose immediate reductions in federal spending (pass a bill and make the Democrats in the House vote on it, don't just talk about it!).
Cutting spending is not enough; it must be accompanied by major structural reforms, increased productivity, use of technology, and long-term government downsizing that both reduce debt and deficits and ignite economic growth. We must restructure the twentieth century entitlement state so the missions of important programs can succeed in the twenty-first century.
Except the Republicans don't restructure the entitlement state.
We must also change the budget process itself. From its beginning, its design has enabled, rather than restrained, reckless spending by giving procedural cover to Members of Congress. The budget process gave us the insidious term “tax expenditure,” which means that any earnings the government allows a taxpayer to keep through a deduction, exemption, or credit are equivalent to spending the same amount on some program.
Except the Republicans' don't change the budget process.
Far worse, the process assumes every spending program will be permanent and every tax cut will be temporary. It refuses to recognize the beneficial budgetary impact of lower tax rates, and it calls a spending increase a cut if it is less than the rate of inflation.
Except the Republicans don't change the assumptions.
Republican Members of Congress have repeatedly tried to reform the budget process to make it more transparent and accountable, in particular by voting for a Balanced Budget Amendment to the Constitution, following the lead of 33 States which have put that restraint into their own constitutions. We call for a Constitutional amendment requiring a super-majority for any tax increase, with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.
Except the Republicans don't try to reform the budget process or vote for a balanced budget amendment.
Securing sufficient funding for the Highway Trust Fund remains a challenge given the debt and deficits and the need to reduce spending. Republicans will make hard choices and set priorities, and infrastructure will be among them. In some States with elected officials dominated by the Democratic Party, a proportion of highway funds is diverted to other purposes. This must stop. We oppose any funding mechanism that would involve governmental monitoring of every car and truck in the nation.
Except Republicans don't make hard choices and set priorities.
Nothing matters more than getting the American people back to work. In addition to cutting spending, keeping taxes low, and curtailing bureaucratic red tape, we must replace outdated policies and ineffectual training programs with a plan to develop a twenty-first century workforce to make the most of our country’s human capital.
Except the Republicans don't cut spending or curtail bureaucratic red tape.
Living Within Our Means: A Constitutional Budget
Republican Members of Congress have repeatedly tried to reform the budget process to make it more transparent and accountable, in particular by voting for a Balanced Budget Amendment to the Constitution, following the lead of 33 States which have put that restraint into their own constitutions. We call for a Constitutional amendment requiring a super-majority for any tax increase with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.
Except the Republicans don't try to reform the budget process, or make it more transparent.
Federalism and The Tenth Amendment
We support the review and examination of all federal agencies to eliminate wasteful spending, operational inefficiencies, or abuse of power to determine whether they are performing functions that are better performed by the States. These functions, as appropriate, should be returned to the States in accordance with the Tenth Amendment of the United States Constitution. We affirm that all legislation, rules, and regulations must conform and public servants must adhere to the U.S. Constitution, as originally intended by the Framers. Whether such legislation is a State or federal matter must be determined in accordance with the Tenth Amendment, in conjunction with Article I, Section 8.
Except the Republicans don't examine federal agencies to eliminate wasteful spending.
With every right comes a responsibility. A few States and their political subdivisions are currently in dire fiscal situations, largely because of their spending, debt, and failure to rein in public employee unions. In the event those conditions worsen, the federal government must not assume the State governments’ or their political subdivisions’ financial responsibility or require the nation’s taxpayers to pay for the misrule of a few State governments. Nor shall the States assume the federal government’s financial responsibility.
Except the Republicans, with some very notable exceptions (e.g. Scott Walker in Wisconsin), don't try to rein in public employee unions.
Government reform requires constant vigilance and effort because government by its nature tends to expand in both size and scope. Our goal is not just less spending in Washington but something far more important for the future of our nation: protecting the constitutional rights of citizens, sustainable prosperity, and strengthening the American family.
Except the Republicans don't stop the expansion of government or protect constitutional rights of citizens.
Medicare spent more than $520 billion in 2010 and has close to $37 trillion in unfunded obligations, while total Medicaid spending will more than double by 2019. In many States, Medicaid’s mandates and inflexible bureaucracy have become a budgetary black hole, growing faster than most other budget lines and devouring funding for many other essential governmental functions.
Except the Republicans don't try to limit spending or limit out-of-control government programs.
The current Administration has been frozen in the past. It has conducted no auction of spectrum, has offered no incentives for investment, and, through the FCC’s net neutrality rule, is trying to micromanage telecom as if it were a railroad network. It inherited from the previous Republican Administration 95 percent coverage of the nation with broadband. It will leave office with no progress toward the goal of universal coverage – after spending $7.2 billion more.
Except the Republicans also try to micromanage aspects of our economy and don't realize that the best market is a free market.
A far better approach—protecting consumers and taxpayers alike—is institutional transparency. Banks need to know that they could be at risk, and investors need clear rules that are not subject to political meddling. The same holds true for the equity market regulated by the Securities and Exchange Commission. We propose reasonable federal oversight of financial institutions, practical safeguards for consumers, and – what is crucial for this country’s economic rebound – sound spending, tax, and regulatory policies that will allow those institutions to once again become the builders of the next American century. We strongly support tax reform; in the event we do not achieve this, we must preserve the mortgage interest deduction.
Except the Republicans don't believe in transparency (the Federal Reserve is one example) nor do they believe in tax reform.
We believe that taking care of one’s health is an individual responsibility. Chronic diseases, many of them related to lifestyle, drive healthcare costs, accounting for more than 75 percent of the nation’s medical spending. To reduce demand, and thereby lower costs, we must foster personal responsibility while increasing preventive services to promote healthy lifestyles.
Except the Republicans don't believe health care is an individual responsibility.
Since 1965 the federal government has spent $2 trillion on elementary and secondary education with no substantial improvement in academic achievement or high school graduation rates (which currently are 59 percent for African-American students and 63 percent for Hispanics). The U.S. spends an average of more than $10,000 per pupil per year in public schools, for a total of more than $550 billion. That represents more than 4 percent of GDP devoted to K-12 education in 2010. Of that amount, federal spending was more than $47 billion. Clearly, if money were the solution, our schools would be problem-free.
Except the Republicans don't limit federal education spending.
In sum, on the one hand enormous amounts of money are being spent for K-12 public education with overall results that do not justify that spending. On the other hand, the common experience of families, teachers, and administrators forms the basis of what does work in education.
Except the Republicans don't stop excessive education spending at the federal level.
The Dangers of A Hollow Force: The Looming Sequestration
Sequestration—which is severe, automatic, across-the-board cuts in defense spending over the next decade—of the nation’s military budget would be a disaster for national security, imperiling the safety of our servicemen and women, accelerating the decline of our nation’s defense industrial base, and resulting in the layoff of more than 1 million skilled workers.
Except the Republicans don't realize that cutting defense spending CAN be done if we stop trying to police the world and require other nations to defend themselves.
Limiting foreign aid spending helps keep taxes lower, which frees more resources in the private and charitable sectors, whose giving tends to be more effective and efficient.
Except the Republicans don't limit foreign aid spending.



There you have it.  If you think that I'm wrong with my "Except..." statements, think back to when George W. Bush was president, the early years when the Republicans controlled the Presidency and both houses of Congress.  What did they do?  Republicans don't address any of these spending issues.  Republicans talk a good game, but they don't deliver.  Because they really don't care about spending.

Honestly, I don't even know why they bother publishing this drivel they call a "platform."  The Platform says, "In all the sections that follow, as well as elsewhere in this platform, we explain what must be done to achieve that goal."  But then they don't actually try to DO any of those things!


Still don't believe me?  Okay, one more link, from the Wall Street Journal.
"Crony Capitalist Blowout"
http://online.wsj.com/article/SB10001424127887323320404578216583921471560.html?mod=djemEditorialPage_t

Notice that more Republicans in the Senate Finance Committe voted FOR corporate welfare than voted against it.  And there wasn't a single Democrate that opposes corporate welfare on this committee, despite their calls for "fairness."
image

From the article:
The great joke here is that Washington pretends to want to pass "comprehensive tax reform," even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be. Even as he praised the bill full of this stuff, Mr. Obama called Tuesday night for "further reforms to our tax code so that the wealthiest corporations and individuals can't take advantage of loopholes and deductions that aren't available to most Americans."
One of Mr. Obama's political gifts is that he can sound so plausible describing the opposite of his real intentions.
The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.
Republicans who are looking for a new populist message have one waiting here, and they could start by repudiating the corporate welfare in this New Year disgrace. 
Exactly.  Especially the part about "greater public cynicism that government mainly serves the powerful."  That's certainly what I believe at this point.

Tuesday, October 2, 2012

Welfare, big and small

Here is an interesting article by Think by Numbers:

"Government Spends More on Corporate Welfare Subsidies than Social Welfare Programs"

So much material here.  Just read the article and realize that welfare, in any form, is dangerous.  I understand people's motivations for it, but I disagree with it.  I believe in no corporate welfare, and private charity.  Any other way and people begin to expect it, to think of it as some sort of "right."

Wednesday, April 4, 2012

The Myth of the Free-Market American Health Care System

This article expresses something that I have long known to be true. Funny how people think that we need government intervention in the health care market because the free market has failed. Really? No, we haven't even tried the free market!

Check out this article from The Atlantic:
"The Myth of the Free-Market American Health Care System"
http://www.theatlantic.com/business/archive/2012/03/the-myth-of-the-free-market-american-health-care-system/254210/

The article essentially points out that conservatives have been painted into the corner of defending the status quo. This is a strategic error. The correct play is to point out that we have suffered through government intervention for many years, and that is why costs keep rising! After all, in true free markets (think Lasik eye surgery) costs keep falling.

The article discusses Switzerland. If government is to be involved, better to give people subsidies (scaled by income) and let them make their decisions independently. Government support but free market incentives.

Singapore, too, has a good healthcare system. Singapore forces its citizens to have health saving accounts. I don't like that they are forced to have them, but I do think that health savings accounts are a very good idea (I have one).

From the article:
"Why does this system work so well? Because it incorporates the central idea behind free-market health care: that health-care spending is most efficient when that spending is executed by individual patients, rather than third parties. It's easy to waste other people's money. But if that money is your own, you are going to try your best to spend it wisely."

Amen to that.

Friday, February 17, 2012

Why I Don't Give You a Job

This commentary applies to Hungary, but it may as well apply to us here in the U.S. given the path our politicians are taking us.

"This is why I don't give you a job" by Jakab Andor
http://andorjakab.blog.hu/2012/01/06/this_is_why_i_don_t_give_you_a_job

No earth-shattering quotes here, just a cold, hard look at the facts that employers must consider. Government intervention doesn't work. And capitalists are not the enemy of the so-called 99%. Government is.

Wednesday, January 18, 2012

Some recognition that subsidies are a waste

Never saw this coming. Even the notoriously liberal Washington Post appears to be recognizing the folly of government intervention. I won't hold my breath and expect them to think rationally in the future, but it's a start.

"Overcharged" by the Editorial Board
http://www.washingtonpost.com/opinions/overcharged/2011/12/30/gIQAzQ0yUP_story.html

I am happy to see that ethanol subsidies and subsidies for installing a 220 V electric car charging stations are now history. In a sign of growth, the Washington Post finally recognizes the ethanol subsidies (for internal subsidies on domestic ethanol and tariffs on imported ethanol) as "two of the most wasteful subsidies ever to clutter the Internal Revenue Code..."

Check out this interesting wording from the Post: "Evidence is mounting that President Obama was overly optimistic to pledge that there would be 1 million EVs on the road by 2015. Electric cars are not likely to form a significant part of the solution to America’s dependence on foreign oil, or to global warming, in the near future. They simply pose too many issues of price and practicality to attract a large segment of the car-buying public. More prosaic fuel-economy innovations such as conventional hybrids, clean-diesel cars and advanced gasoline engines all show much more promise than electrics."

That's the nice thing about having a brain, I don't have to wait for the Post to tell me this stuff. I can figure it out for myself.

I wish people would realize that it's not just ethanol or electric car subsidies are wasteful. Government shouldn't be getting involved in picking winners and losers in the market. They just make things worse.

Tuesday, January 17, 2012

Our crazy stupid debt--explained!

So, we need to increase the debt limit? AGAIN? Watch this video to put our government in terms that we can easily understand.

By the way, what is the point of having a debt "limit" anyway? Is there something about the word "limit" that politicians don't understand?

"DEBT LIMIT - A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY." posted by debtlimitusa
http://www.youtube.com/watch?feature=player_embedded&v=Li0no7O9zmE

This is funny, but it's also very sad. Especially the part at the end.

Friday, September 2, 2011

Obamanonics vs. Reaganomics

I can't say it any better, so I'm going to just post this article from the Wall Street Journal:

"Obamanonics vs. Reaganomics - One program for recovery worked, and the other hasn't." by Stephen Moore
http://online.wsj.com/article/SB10001424053111904875404576530412322260784.html

"The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus."

"By the end of the summer of Reagan's third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and '84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan's first term, it was Morning in America. Today there is gloomy talk of America in its twilight."

"My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn't."

The Economy is So Bad...

Here's a little economic humor, kind of cheesy but kind of funny, too.  From The Disciplined Investor:
"Sunday Fun: The Economy is So Bad… How Bad is It?"

http://www.thedisciplinedinvestor.com/blog/2011/08/28/sunday-fun-the-economy-is-so-bad-how-bad-is-it/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+thedisciplinedinvestor%2FEBHR+%28The+Disciplined+Investor%29


Here is the list:
  • The economy is so bad that I got a pre-declined credit card in the mail
  • CEO’s are now playing miniature golf. Exxon-Mobile laid off 25 Congressmen
  • Angelina Jolie adopted a child from America
  • Motel Six won’t leave the light on anymore
  • A picture is now only worth 200 words
  • They renamed Wall Street "Wal-Mart Street"
  • And, finally (drumroll), I called the Suicide Hotline. I got a call center in Pakistan and when I told them I was suicidal, they got all excited, and asked if I could drive a truck.


Lots of serious content on this page, too. Including this story:
"Sunday (NOT SO) Fun: The Fictional Jobs Agenda"
http://www.thedisciplinedinvestor.com/blog/2011/07/24/sunday-not-so-fun-the-fictional-jobs-agenda/

Monday, August 29, 2011

Ocassionally they tell the truth: "Economist" Paul Krugman

Did you hear that someone made a fake Google+ page in Paul Krugman's name? Well, here is Krugman's response. From the New York Times, Paul Krugman's blog:
"Identity Theft"
http://krugman.blogs.nytimes.com/2011/08/24/identity-theft/

I love this quote from his post:
"So if you see me quoted as saying something really stupid or outrageous, and it didn’t come from the Times or some other verifiable site, you should probably assume it was a fake."

Probably, he says. Probably. As in, he knows he says really stupid stuff. So he can't honestly say "if you see me quoted as saying something really stupid, assume it was a fake." Because he knows that that simply wouldn't be true.

I love this part, too: "Apparently some people can’t find enough things to attack in what I actually say, so they’re busy creating fake quotes." Now that is bullshit. Krugman keeps plenty of people busy attacking the drivel that comes out of his mouth and his keyboard.


So what prompted Krugman to post this to his blog? The Fake Krugman, from the fake Google+ account, said this:
"People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage."

This is what he was objecting to. Funny thing is, the Fake Krugman said exactly what the Real Krugman believes. Don't believe me? Consider these links.

From Human Events:
"The Krugman Earthquake Stimulus Fakeout"
"A phony post that sounded too good to be false." by John Hayward
http://www.humanevents.com/article.php?id=45730

Lots of jokes to start off this column. I like this one: "Breaking: mountain of debt in Washington shifts slightly, triggering magnitude 5.8 earthquake."

The article presents the Fake Krugman quote and then makes some good points:

"The message sounds like self-parody, but Krugman is a big believer in the 'Broken Windows' school of economics, having apparently missed the part of Econ 101 where they teach you it’s a fallacy. He muses often on the fabulous opportunities for economic growth afforded by wars and the cleanup efforts from natural disasters. Less than a week after the 9/11 attacks, for example, he wrote: 'Ghastly as it may seem to say this, the terror attack - like the original day of infamy, which brought an end to the Great Depression - could even do some economic good.'"


And from Hot Air:
"Krugman(?): If only the earthquake had done more damage, the economy would have gotten a boost; Update: Not Krugman" posted by Allahpundit
http://hotair.com/archives/2011/08/23/krugman-if-only-the-earthquake-had-done-more-damage-the-economy-would-have-gotten-a-boost/

"Is it real or just a goof? Kevin Williamson isn’t sure and neither am I, but given that this is the same guy who fantasized recently about the Keynesian awesomeness of an alien invasion, it’s at least a toss-up. All day long I’ve felt relieved that the quake caused only very minor damage, but now suddenly I’m bummed that the Brooklyn Bridge didn’t fall into the river. Maybe we can get DHS or the NYPD to blow it up? That’s a few thousand jobs right there."

"Here’s a bona fide Krugman original, published … September 14, 2001."

And now the Hot Air article quotes Krugman directly:

"It seems almost in bad taste to talk about dollars and cents after an act of mass murder. Nonetheless, we must ask about the economic aftershocks from Tuesday’s horror.

"These aftershocks need not be major. Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good. But there are already ominous indications that some will see this tragedy not as an occasion for true national unity, but as an opportunity for political profiteering…

"First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.

"Second, the attack opens the door to some sensible recession-fighting measures. For the last few weeks there has been a heated debate among liberals over whether to advocate the classic Keynesian response to economic slowdown, a temporary burst of public spending. There were plausible economic arguments in favor of such a move, but it was questionable whether Congress could agree on how to spend the money in time to be of any use — and there was also the certainty that conservatives would refuse to accept any such move unless it were tied to another round of irresponsible long-term tax cuts. Now it seems that we will indeed get a quick burst of public spending, however tragic the reasons."

Summary: Paul Krugman is stunningly stupid. Of course we believed the Fake Paul Krugman post on Google+! The real stuff he said is even more outrageous than the fake stuff!

Need more proof? Read on...


More from Hot Air:
"Krugman: You know what this economy needs? A space alien invasion!" posted by Ed Morrissey
http://hotair.com/archives/2011/08/15/krugman-you-know-what-this-economy-needs-a-space-alien-invasion/

Watch the video. Yes, I can't believe he can say that stuff with a straight face, either.

This whole loony discussion from Krugman came after Fareed Zakaria asks about the ditch digging example, where some people (Keynesians, actually, not smart people) believe that government paying some people to dig ditches and others to fill in the ditches creates jobs.

As Hot Air says, "Paul Krugman then doubles down on this idiocy by explaining that economic growth would be just around the corner — if only Space Invaders came to life." Seriously.

Amazing that sheep out there keep listening to him. Amazing.

Monday, August 22, 2011

The National Debt, in Real Time!


You might have seen this before, but it's still worthwhile taking another look. It is a real-time update of our national debt. It is scary, to me anyway.

"US Debt Clock.org"
http://www.usdebtclock.org/

As you mouse over various entries in the table, keep an eye on the title box at the top for an explanation of the term your mouse is on.

Also note the links to the state and world debt clocks in the upper left of the screen.


Monday, August 1, 2011

Essential Bastiat

Do you ever get sick of people saying that the government creates jobs? Because you know that it's just not true?

Well, all of this was addressed decades (centuries even) ago by Frédéric Bastiat. If you haven't read his stuff before, you should. Here is a good start. From the Library of Economics and Liberty:

"Bastiat: Selected Essays, Chapter 1, What Is Seen and What Is Not Seen"
http://www.econlib.org/library/Bastiat/basEss1.html

He explains the difference between the seen and the unseen in economic analysis. The Broken Window Fallacy is also a classic. Too much great information to even summarize here. Here is Bastiat on the seen and unseen:

"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."

"Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil."

Bastiat makes a great point about the army creating jobs via the military. He asks, "If, all things considered, there is a national profit in increasing the size of the army, why not call the whole male population of the country to the colors?" We know why: Because anything the government provides must be taken first from others. And if it takes too much, there won't be enough to go around to fund the government.

Thursday, July 28, 2011

Independent Money

Check out this video. It's a very basic description of the difference between gold currency and fiat currency. It advocates gold currency. Certainly, gold is not perfect. But in my opinion it is the best choice of currency we have. Fiat currencies are too easy for governments to manipulate, at the expense of their own people.

From YouTube:
"Gold: Independent Money" posted by Frizzers
http://www.youtube.com/watch?v=RvL_Dm2d99A&feature=player_embedded


The thing that really gives away the true purpose of fiat currency is the fact that governments outlaw any alternative. They insist on a monopoly. They are counterfeiters who can't stand any competition. They literally cannot let their citizens be free. Advocates of gold currency don't attempt to abolish fiat currency, they don't need to. All they request is the freedom to write contacts in any currency they choose.

Check out the bill to allow gold currency for yourself:
H.R. 1098: Free Competition in Currency Act of 2011

Here is the full text of the bill:
Text of H.R. 1098: Free Competition in Currency Act of 2011

Here is a summary of the bill:
H.R. 1098: Free Competition in Currency Act of 2011

And here is the section of the U.S. Code that this bill is attempting to repeal:
§ 5103. Legal tender

Wednesday, June 1, 2011

Who's right on Medicare Reform? (Hint: Paul Ryan!)

I'm lazy today, plus I can't make these points better than Mish can.

From Mish's Global Economic Trend Analysis blog:
"Who’s Right on Medicare Reform, Ryan and Rivlin or Obama and Gingrich? Cato Institute Praises Paul Ryan's Medicare Voucher Proposal"
http://globaleconomicanalysis.blogspot.com/2011/05/whos-right-on-medicare-reform-ryan-and.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29


Here is more material, from Paul Ryan and the House Budget Committee:
"The Path to Prosperity (Episode 1): America's two futures, visualized"
http://www.youtube.com/watch?v=Xwv5EbxXSmE

"How will we do it? We will cut spending."

"Washington has NOT been telling you the truth. If we don't reform spending on government health and retirement programs We have zero hope of getting our spending, and as a result our debt crisis, under control."


"The Path to Prosperity (Episode 2): Saving Medicare, Visualized"
http://www.youtube.com/watch?v=DJIC7kEq6kw

The full script of the video can be found here:
"The Facts on Medicare and How to Save It"
http://budget.house.gov/fy2012budget/medicare.htm

"Washington has not been honest with you about Medicare."

"Here’s how it works: A Medicare patient goes to the doctor and receives health care services. The doctor sends the bill for these services to Medicare, and Medicare reimburses the doctor -- with your tax dollars and borrowed money -- no questions asked."

"This system increases costs and decreases quality for two reasons: ... First ... the patient is very disconnected from the cost. ... the true cost is hidden from the Medicare patient because someone else pays the actual bill. When we pay directly for something, and we know how much it costs, we have a strong incentive to demand the best value. In health care, we don’t."

"The second reason costs are going up and quality is going down is that fee-for-service Medicare insurance has no competition -- so it reimburses all doctors and hospitals the same, even if the quality of the care they provide is poor, and the cost of their care is high. Meaning that there is little financial incentive for doctors and hospitals to deliver the best care at the lowest price."

"The urgent need to reform Medicare and the President’s misguided approach have left us with a serious question to ask: Who should be making health-care decisions for you and your family?
A government monopoly and a panel of bureaucrats in Washington DC? Or you?"


More source material is here, at the House Budget Committee website.
http://budget.house.gov/fy2012budget/

Thursday, May 26, 2011

Tax policies matter, no matter what the Left says

Here's a funny limerick, from LIMERICKS ÉCONOMIQUES by Dr. Goose (whoever he is):
"The $37 Billion Question"
http://www.limericksecon.com/2011/05/37-billion-question.html
The $37 Billion Question 
Said a Harvard professor of econ,
"That Google's got something unique on:
They have cash by the score,
Yet still borrow more;
This is something I've puzzled all week on." 
Said an expert in cross-border taxes,
"I should hope the professor relaxes;
As Google keeps cash
In an overseas stash,
'Til taxation here wanes and not waxes."
Why does that limerick amuse me? Because it shows that tax policies matter. Google recently borrowed $3 billion. My first reaction: Why the hell does Google need to borrow money when they have approximately $37 billion in cash? Research the issue a bit and see if effective tax rates in different countries didn't play a role. A big role.

Tuesday, March 29, 2011

Where art thou, Frédéric Bastiat?

Ever wonder why our economy is in the state it's in? The very first paragraph in Walter Williams' recent article, "Economic Lunacy," says it all: "Economic lunacy abounds, and often the most learned, including Nobel Laureates, are its primary victims."

From The Patriot Post:
"Economic Lunacy" by Walter E. Williams
http://patriotpost.us/opinion/walter-e-williams/2011/03/23/economic-lunacy/

Williams is criticizing other economists who believe that the recent devastation in Japan after the tsunami (including the nuclear plant problems) has a silver lining, because it will spur economic activity. This is the same story we have heard after other natural disasters around the world. What are these guys smoking???

Frédéric Bastiat, where are you when we need you? Has everyone forgotten Parable of the Broken Window (in his essay That Which Is Seen and That Which Is Unseen)? What about the Candlemakers' Petition? If some destruction is good, why don't we destroy our own cities more often?

Or, to make it more personal, maybe it would be a very good thing for you if your house burned down tomorrow. I mean, think of all the economic activity that would generate. Does that make any sense to you? Don't be bashful, it's okay to admit it if it does. Because you might have a Nobel Prize waiting for you.

Tuesday, March 8, 2011

FDR and the end of the gold standard

We used to be on the gold standard in this country. Now we're not. How did that happen? Consider this article, which discusses FDR's outlawing and confiscation of gold in 1933. The article discusses not what FDR did but why he did it.

From Moonlight Mint:
"FDR’s 1933 Gold Confiscation was a Bailout of the Federal Reserve Bank" by Daniel Carr
http://www.moonlightmint.com/bailout.htm

Bear in mind as you read the article how "money" comes into being--how it used to come into being and how it now comes into being. What stops the government from printing more and more money? Nothing. Nothing at all. And when it does, all that you have worked for is diminished, the purchasing power of the money you have earned is eroded. It is another way that the government taxes us, not only without our consent but without our knowledge (for most people, anyway).

There are very few politicians who even understand this process, fewer still who stand against it. Most are happy to remain ignorant and keep growing government, at our expense. Open your eyes, and vote accordingly.

Friday, March 4, 2011

What is a dollar?

What is a dollar anyway? Who would know? Better yet, who should know?

Well, for starters I would think that the Fed Chairman should know, right? Think again. From the Wall Street Journal:
"Ron Paul to Bernanke: ‘Define the Dollar’"
http://blogs.wsj.com/washwire/2011/03/02/ron-paul-to-bernanke-define-the-dollar/

"Despite his various criticisms, however, Mr. Paul had one question for Mr. Bernanke: 'What is your definition of the dollar?'

"The Fed chairman, who has spent significant time on the receiving end of congressional scorn over the last few years, didn’t blink, framing his answer in terms of everyday consumers.

"'It’s the buying power of the dollar which is what is important,' Mr. Bernanke said, noting that 'consumers don’t want to buy gold; they want to buy food and clothes and gasoline.'"

Notice that Bernanke NEVER ANSWERED THE QUESTION. Does he not know? Or if he does, why wouldn't he say?


So what should the dollar be? Perhaps a claim on real assets (such as gold) the way it once was? No one believes that anymore. Or do they? From Zero Hedge:
"Stunner: Gold Standard Fully Supported By... Alan Greenspan!?"
http://www.zerohedge.com/article/stunner-gold-standard-fully-supported-alan-greenspan

According to Greenspan, "We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard.'"

The article continues, "And a further stunner: Greenspan himself wonders if we really need a central bank. Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: 'The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300.'"

Wow.

Remember, however, that although Greenspan talks a good game now, and did before he was Fed Chairman, he never backed up his words with action when he was in a position to do something about this. He never said stuff like this when he actually was in a position of power to change our monetary system. He may be right now but he is a gutless coward, in my opinion.

Saturday, February 12, 2011

Occasionally they tell the truth, part 10: John Gage, fed up taxpayers are "mentally retarded"

John Gage, AFGE (American Federation of Government Employees) President:
"When people say, well, we just have to pay less in wages, whether it’s private sector or public sector, I think they’re mentally retarded to say something like that."

So where is the money going to come from, John? Should private sector employees accept pay cuts but not government workers? Should governments continue to run deficits? Should we put our heads in the sand and just pretend that we can do this forever???

Watch the video here, courtesy of Americans for Prosperity:
"Union Boss John Gage Says Those Who Want to Cut Spending are 'Mentally Retarded'"
http://www.americansforprosperity.org/020911-afge-president-john-gage-says-those-who-want-cut-spending-are-mentally-retarded