Entries Tagged as 'Economy'

New Year – Same Down Economy

Retailers started releasing fourth quarter earning reports yesterday.

There’s no surprise here — Target, the number two retailer in the US, announced on Christmas Eve that sales would not meet there expectations; and Master Card also indicated that spending (via credit card) was down.

Wal-Mart, of course, tipped everyone off that they expected a bad retail season when they started their “Black Friday” sales three weeks before Thanksgiving and most retailers followed suit with deep discounts through out the retail season.

While a bad retail season doesn’t by itself mean that the economy will continue to slump, there are certainly enough signs to that effect (personally I’m ignoring the US Department of Labor’s unemployment numbers… they simply don’t make sense, they don’t seem to reflect reality, and they are designed to be misleading).

I certainly don’t have a crystal ball, but the long the economy continues the slide downward the harder it will be to revive.  My instinct tells me that this downturn, like The Great Depression, will not be ended by planning and programs — but by aggression, greed, and exploitation.

Originally posted 2010-01-13 01:00:13.

April Fools Day

But this is totally serious…

Today, California’s 1% increase in sales tax goes into effect; the term of the increase won’t be known until after a ballet measure is voted on.

California, like many states, has been spending far more than it’s been taking in — and this is yet another misguided attempt by the Governor and assembly to make up the difference.

In a down economy, let’s raise the sales tax — I’m sure that will jump start retail sales and put the economy on the fast track to recovery… GET A CLUE, it’s not like most people are spending money on luxury items right now, they’re just trying to make ends meet; and those with means to buy expensive items will just purchase them out of state.

It looks to me like the best view of California is in the rear view mirror leaving!

Originally posted 2009-04-01 01:00:49.

Bye-bye, tax breaks?

By Jeanne Sahadi, senior writer CNN
October 26, 2010: 2:05 PM ET

NEW YORK (CNNMoney.com) — Who says there’s no bipartisanship? Democrats and Republicans running for Congress are finding every way possible to assure voters they will keep Americans’ taxes low forever.

But those will be hard promises to keep after the economy recovers. Tax experts almost uniformly say the next Congress should rethink the more than 200 tax breaks in the federal code that cost more than $1 trillion a year. And, yes, that includes even the really, really popular ones.

Lawmakers may be presented with the idea as early as December, when President Obama’s fiscal commission issues its report. There is a possibility the commission may recommend curtailing or eliminating some tax breaks.

Commission co-chairman Erskine Bowles has publicly expressed support for the idea. So has commission member Alice Rivlin, former White House budget director. Another member, Republican Sen. Judd Gregg, who coauthored a bipartisan plan for tax reform, supports curtailing some breaks but only to lower marginal tax rates in the context of broader reform.

The $1 trillion-plus in forgone revenue is close to the amount allocated for defense and discretionary spending in 2010, or the equivalent of nearly a third of the latest federal budget.

Cutting back on tax breaks can be a more efficient way to bring in revenue than raising income tax rates because it would subject more work and business income to taxation. If done right, it also promises to make the tax code fairer and simpler.

For years, leading tax experts and economists from the left and the right have contended that tax breaks are, in reality, a form of spending. The cost of tax breaks is mostly invisible, since there’s no formal accounting of them on Uncle Sam’s books. And once passed into law, they are rarely scrutinized.

“[Tax breaks] are styled as tax savings, but really function as replacements for explicit government spending. Some make sense, but a great many are poorly targeted and would never pass Congress if presented as an outright spending proposal,” tax expert Edward Kleinbard wrote in an article this summer called, “Sacred Cows: It’s Them or Us.”
Popular tax breaks: Dogfight ahead

A disproportionate amount of the lost revenue from tax breaks comes from just five of them.

Not surprisingly, those five are also among the most popular:

  • mortgage interest deduction;
  • tax-free income workers get from employers to pay for health insurance;
  • deduction for state and local taxes;
  • deduction for charitable contributions;
  • and myriad tax breaks for retirement savings.

Many of those breaks are only available to the roughly one-third of taxpayers who itemize deductions on their returns.

There have been a number of proposals over the years for how the biggest breaks might be modified.

Most recently, the bipartisan Committee for a Responsible Federal Budget put out a paper highlighting many possibilities that combined could raise $1.7 trillion in additional revenue over a decade.
Think you’re smart about deficits? Try this

For instance, consider the money that workers receive when their employers contribute to their health insurance costs. That subsidy is currently treated as tax-free income to the worker and is unlimited.

The subsidy could instead be converted to a credit, which is a dollar-for-dollar reduction of one’s tax bill. The credit would be phased out for higher income taxpayers and it would be refundable for low-income workers who don’t make enough income to owe any federal income tax.

“This strategy would reduce the incentive for employers to offer ‘gold-plated’ insurance plans,” the budget watchdog group wrote.

The mortgage interest deduction — currently available on up to $1.1 million of borrowing — could be gradually reduced so that it only applies to loans on up to $500,000. And the option tax filers get to deduct interest on their second homes could be eliminated.

“[Today’s] policy is regressive (providing larger tax breaks to those well off enough to purchase more expensive homes), promotes homeownership over other productive investments and costs the government roughly $100 billion a year in lost revenues,” the committee noted in its paper.

Since everyone in Congress can identify and vilify what they see as “tax breaks for special interests,” curbing tax breaks has a lot of bipartisan support. The problem, of course, is that there’s less agreement on just which tax breaks deserve the ax or at least a haircut.

And, of course, since politicians much prefer to hand out tax breaks to voters and financial backers, it may be hard for them to muster the mettle required to reverse gears.

How hard? Bowles put it plainly at the fiscal commission’s public meeting in September.

“It’s not going to be easy,” he said. “It’s not going to be fun, and in many cases, it’s also not going to be popular. It is going to require sacrifice on the part of all Americans to get there.”

Original Article on CNN.com

Originally posted 2010-11-06 02:00:55.

This is a mistake that we will pay for for years to come!

Yes, today is Pearl Harbor day, but the title isn’t what Japan’s Admiral Yamamoto said after the attack (that was in fact, “I fear we have awakened a sleeping tiger and filled it with a great resolve”) — it’s actually what Richard Gephardt (of Missouri), then Democratic House Leader, said about the $1.6 trillion in tax cuts that then President George W Bush singed into effect after stepping into the presidency in January 2001.

Georgie and his buddies the conservatives taunted that the huge surplus amassed under the eight years of prosperity of President Bill Clinton was the result of the American government overcharging the average person in taxes.  So they concocted a tax cut (40% of which was targeted at the wealthiest 1% of Americans) which would reverse the projected $5.6 trillion surplus over the next ten years.

Well, ten years later this country is in the worst economic condition since the great depression — unemployment (even by government figures) is in double digits, and there’s really no sign of substantial improvement on the horizon and there’s a debate about renewing those tax cuts…

For the average American the tax cuts makes no difference; even for fairly wealthy Americans they don’t make much difference — it’s really only for the wealthiest of the wealthy that they tax cuts make a substantial difference; or put plainly, it benefits those who are doing fine — and in the long run may harm those who are barely hanging on.

We don’t have a budget surplus any longer (in fact, I’d argue we never had a budget surplus — we had a debt that we could have, and should have, paid down).

President Obama has proposed a tax plan that will give most Americans the same tax savings that the old Bush plan did, but it will remove the tax cuts that the richest Americans got… but I’m not sure we shouldn’t be finding a more equitable way to tax rather than continuing to convolute the tax laws so that those with wealth and power can twist the law to serve their needs.

Originally posted 2010-09-07 02:00:43.

$100 Bill

There’s a new fancy high-tech $100 bill that will be hitting the streets.

Made for the US Treasury Department by Crane & Co, Dalton, MA, US (who also makes paper currency for a number of other world governments), the new bill features a number of new security innovations; amount them are a 3-D ribbon, an image of an inkwell that changes to a Liberty Bell, as well as other features introduced on earlier denominations.

Originally posted 2010-10-27 02:00:07.

Tea Party

The Tea Party has been holding a number of rallies to make people aware of how government is misusing their tax dollars…

Damn straight!

Remember, the wars in Iraq and Afghanistan were not in the budget; the wars were entered into based on lies told to the American people (and the House and Senate — which you would have hoped would have been a little more savvy than the average taxpayer and ask for proof).

So let’s start by getting that nearly trillion dollars that was misappropriated ack; from the defense budget (after all — gotta cut to pay, right Tea Party — and best to cut from the same programs that used misappropriated money than a program that didn’t).

Am I serious… well, I’m as serious as the Tea Party.

If you want to look for places to get money to help this country make ends meet; here’s the short list.

  • Wall Street
  • Banking
  • Oil & Gas Industry
  • Defense

Seems like these are the areas which have taken far more than they have put in for the past several years…


And honestly, no, this isn’t the way I’d try and balance the budget.

I’d look at fixing what’s broken…

Health Care — the Obama health care plan is a waste; let’s move to a single payer system (much like our neighbors to the North) that _all_ US citizens are a part of; and that government employees and elected officials have no option but to use (and have no special access).  Of course any business or individual could elect to pay for private insurance, but that would be using after tax dollars.  Medicare and medicaid would simply be a part of the national health system; and the only difference would be that very low income individuals would get at least some number of co-pay waivers per year.

Social Security — definitely needs to be looked into, but a program that many Americans over 50 have been expecting to be there when they retire cannot continue to change…  I’m not sure how to fix this, but we probably need to view all the different parts of the Social Security system separately and deal with solutions based on the needs of each.

Defense — definitely needs to be trimmed.  We simply cannot spend 20% of every tax dollar for defense (40% of what the world spends on arms — six times that of China)… and that money doesn’t need to be wasted on weapons programs that aren’t needed (or wanted by most Americans).  Let’s keep it in perspective, military spending is what caused the implosion of the Soviet Union, the US need not continue to escalate the arms race.

Taxes — there’s a simple solution, throw out the old tax code (and the IRS) and institute a simple code.  Something like: no tax on earnings to poverty level,  5% on everything above poverty level to say 2x poverty level; add 5% percent on each 1x poverty level beyond that to a maximum rate of 50%.  That’s it, no other Federal tax (everything comes out of one tax stream).  No American entity pays 50% of their earnings in tax; and very few pay anywhere near that.  If the tax rate is too high, just adjust the single 5% number on each band, and instantly the earnings amount the cap applies to goes up.  Plus, as poverty is eliminated, the tax bracket broadens.

Term Limits — any elected official needs to be bound by the same term limits as the President; no more than two terms in the same office.  And we need to make sure that these officials are paid the US median salary — after all, they should represent the views of an average American, and that they have the exact same safety net as the rest of America (Social Security)… no special retirement plan.  Now I would certainly agree that they could be considered government employees, and count their time in office toward a retirement — the same as the clerks in their offices do.

Education — we definitely need to consider education as a national issue, not a local one.  Standards need to be more consistent and graduates need to be functional in our society (if you don’t think education is closely tied to economics, you’re living in a cave).


None of this is what’s being talked about — the Tea Party is completely politically motivated, and are only interested in imposing their regressive (misguided) Christian ultra-right views on the process; and don’t want to work towards any real solution since they view failure as the way to gain control.

The first step to fixing the problem is change — and I subscribe that change starts by sending the signal that we as Americans just won’t put up with the way in which business has been done too long.

Perhaps the American Spring isn’t far off.

Originally posted 2011-09-26 02:00:49.

LA Auto Show

The auto show might be a no show…

With the big three US auto makers in dire financial shape, and most Americans finding themselves worrying more about how to put food on the table than considering a new vehicle… but the show must go on!

Some high lights:

  • The Mini Cooper Electric, the Mini E
  • The new Honda Insight [Concept] – redesigned to be more like the Toyota Prius, alledgedly with better fuel economy, and less expensive.
  • The new Ford Fusion and Mercury Milan hybrid sedans ($1000 more than the Toyota Camry hybrid)
  • The all-new Nissan Cube (similar to, but smaller than the Scion xB)

Several auto makers with drew plans to launch vehicles at the auto show.

Originally posted 2008-11-20 18:00:12.

Stuck in the toilet…

If the economy stays stuck in the toilet, I have a shot at beating Obama...
by Mike Luckovich

Originally posted 2011-07-06 02:00:52.

Boehner makes sense

House Minority Leader John Boehner (Republican) stated that he would support President Barack Obama’s proposal to renew the expiring Bush tax cuts only for those making less than $250,000 if it were his only option.

The Republicans in both the House and Senate were quick to add fuel to the fire and turn up the volume on the rhetoric about fiscal responsibility, watching out for the little guy, etc, etc, etc — and saying that they believe the tax cuts should be extended for all Americans.

Do people making over $250,000 really need a tax cut?

Seems to me that they’re doing OK; much better than the average American is fairing in this economic crisis (I won’t call it a recession because it certainly seems much more like a depression — so we’ll leave it a crisis).

The bottom line is we have to pay our bills — and as the Republicans are complaining about the government has been spending out of control… but what they don’t remind you is that George W Bush is responsible for the out of control spending; Barrack Obama and his administration haven’t spent anywhere near as much as George W Bush — and a large amount of what is being spent now is being spent on a war that George W Bush threw this country into (and lied to get the support for it).

I’m well aware that it’s a tenant of Socialism that we take more from those who can afford it, and give it to those who need it…

From each according to his ability, to each according to his need
· Karl Marx, 1875 Critique of the Gotha Program

But in point of fact the American income tax structure has always been based on a progressive tax (those who earn more, pay more); except what happens now is that those who earn enough can avoid taxes by taking advantage of the loop holes the complex laws afford them.

We really need to rework the tax system so that it’s more equitable across the board; and those who benefit greatly from society pay their fair share of the costs of supporting society… but until then, I think getting $700B from those who earn more than a quarter million dollars per year is a necessary step to putting this country back on the road to stability.

Originally posted 2010-09-15 02:00:52.

Mr President, now is the time to be a president.

There is a good article on CNN.com by Donna Brazile on what President Obama could (and should) do to get the economy back on track.

I think she’s got the right idea, but I think she really stops short of just outright saying that the problem isn’t necessarily Obama’s failed programs, it’s his failed leadership.

Now is not the time to sit on the fence Mr President; you’ve tried to build a consensus with congress (you failed to do that when your party had control of both houses, and you’ve continued to fail to do that now that your party doesn’t)… it’s time for you to lead — or to step aside and let someone else do so.

The problems this country has are solvable; but every day we wait to start moving down a path that is likely to put us on the road to get American’s working and to pay down the enormous debt that Republicans and Democrats alike have saddle the current (and future) generation(s) with we simply make the problem harder — and at some point there will not be a solution, the US will simply drift into the fray of third world countries never likely to regain it’s position as a real world leader again.

So, Mr President — be the president; make the hard choices; and move this country forward… it’s not the time to be a politician or a two term hopeful, it’s time to be a president.

 


4 ways Obama can take control to get America back on track by Donna Brazile on CNN.com

Originally posted 2011-08-17 02:00:42.