It must be Pick-on-Greg Mankiw Day. PGL at Angry Bear tears into Greg about his Thoughts about the nature of SS payroll payments. All he did was present a Graph used in a presentation before Congressional Committee. PGL should be more worried that such drivel is presented to Our lawmakers as fact. An aside, while the commentary by Karl Smith at Greg's Post was interesting, I think the immediate following commentary by Anonymous was far more detailing; identifying the real Public debt in this Country.
Now it is my turn to carp at Greg, for his use of an article by David R. Francis. Notice again that this is a NBER article. My antagonism with the Francis posit lay in the simple use of numbers, an affliction particular to Economists. Both areas, Maine and New Brunswick, stand as substandard Income sections of each Country. Both, in the same geographical area, are noted for highly Seasonal Work settings; Employment more heavily reliant on Small Business creation than elsewhere; and Small Business which can endure major draft of labor elements to higher-Paying Jobs elsewhere seasonally. Economists have difficulty with the Concept that Employment opprotunities vary by region, not Numbers.
Some may notice I am having some amusement here, but I am not Friday Night Beer Blogging. It is a Saturday Fall morning, beautiful to be out, and I am thinking I should draw this to a close. I will simply tell Greg: Sorry! The Devil made me do it. lgl
Saturday, September 30, 2006
Friday, September 29, 2006
Tax Expenditures
Tax Expenditures remain simply the fancy name for Tax loopholes. I am not enamored of the Thought of Andrew Chamberlain, but this article stands as a very effective Read. The link to the Congressional Reseach Service provides this:
For FY2006, the Joint Committee on Taxation (JCT) estimates that tax expenditures will amount to $945 billion -- over three times the projected FY2006 federal budget deficit.
Curtailment of Tax Expenditures could completely eliminate the current federal deficit levels, and would narrow the Income Gap in Employment. Business Profits would descend from it's vaunted Position, as Households regained advantage in Labor supply.
The Angry Bears weigh in somewhat on this subject with this Post, alternately stating that the Bush Tax Cuts (Tax Expenditures) applied too little Short-term economic fuel, and too much long-term fiscal irresponsibility.
Government mismanagement extends beyond inefficient Tax policy, read Greg Mankiw's Post about the planned Potato cartel. Here We have Government-allowed (think sponsored) destruction of Food supplies to maintain high Prices to Consumers. Think on this rationale: Government allows all the Production Costs of raising Potatos (granting farmers all subsidies and Tax allowances), free farmers from monopoly restraints, encourages farmer destruction of Food supplies whose specific goal is making Consumers pay more, finally allowing farmers to deduct their losses of crop. Consumers get to pay higher Prices, Taxpayers pay higher Taxes, farmers make no better Living than previously when on simple Support Payments, Government raises the quantity of their deficit spending, and more People go hungry. Am I the One who is insane? lgl
For FY2006, the Joint Committee on Taxation (JCT) estimates that tax expenditures will amount to $945 billion -- over three times the projected FY2006 federal budget deficit.
Curtailment of Tax Expenditures could completely eliminate the current federal deficit levels, and would narrow the Income Gap in Employment. Business Profits would descend from it's vaunted Position, as Households regained advantage in Labor supply.
The Angry Bears weigh in somewhat on this subject with this Post, alternately stating that the Bush Tax Cuts (Tax Expenditures) applied too little Short-term economic fuel, and too much long-term fiscal irresponsibility.
Government mismanagement extends beyond inefficient Tax policy, read Greg Mankiw's Post about the planned Potato cartel. Here We have Government-allowed (think sponsored) destruction of Food supplies to maintain high Prices to Consumers. Think on this rationale: Government allows all the Production Costs of raising Potatos (granting farmers all subsidies and Tax allowances), free farmers from monopoly restraints, encourages farmer destruction of Food supplies whose specific goal is making Consumers pay more, finally allowing farmers to deduct their losses of crop. Consumers get to pay higher Prices, Taxpayers pay higher Taxes, farmers make no better Living than previously when on simple Support Payments, Government raises the quantity of their deficit spending, and more People go hungry. Am I the One who is insane? lgl
Thursday, September 28, 2006
Raptors and other Buzzards
The F-22 Raptor Fighter Jet stands as the Beltway enigma. Opposed by all designated Policy-makers and the Armed Forces Committee of Congress, it still continues to fly away with ever-increasing Taxpayer Dollars. The article tries to explain how the $350 million plane only costs some $130 million per plane, if maybe the Air Force could get the 750 planes it originally wanted. It has 74, is promised 183, and wants 381. Study the great abilities of the Plane: it's altitude of 60,000 feet can only be attained by using half the fuel in the tanks, Cruising Speed probably matches Top Speed (only half a tank at the altitude where such Top Speed can be attained), it's stealth technology is wonderful (it's onboard system cannot detect each other). Structural cracks are already being found in the 74 planes the Air Force has, and the extremes of altitude and Speed utilized will triple the structural crack threat; cutting the estimated life of each plane to one-third planned. I happen to agree with Dug-in Don on this one.
Robert H. Frank has an article on Consumers always wanting greater quality, with the willingness to pay for it. I would agree when it was greedy Air Force officers backed by the military/industrial complex; all expecting American Taxpayers to pay for the entire load. The first article mentions that the Senate is voting this Week on the $447 billion 2007 Defense budget. It would not be so sad, except for what is this weaponry planned? It is most definitely not for Occupational duties like in Iraq and Afghanistan. Does Anyone remember Rooster Cogburn in True Grit: Too much Gun!
OPEC goes with an informal leveling of Oil production; translated: We are going to keep pumping, but you Speculators are supposed to run the Oil price up. Why is it a administration, composed of Oil Executives and Contractors whose major business is Service industries to Oil companies, cannot get Iraq (3rd largest Oil Reserves in the World) to pumping Oil again? Could it be because Oil is quoted at $63/barrel, where before it was $37/ barrel when Iraq was pumping Oil? Shame, shame--that would suggest the Corruption had seeped out of Iraq. But why is the Corruption always connected to American Corporations? No wonder We are experiencing a slowing economy.
It may be defeatist to say this, but the Management Executive performance of Oil executives seems wanting in the self-originating War on Terror. The Contracting methodology of our current Administration may do more damage than al Queda ever presented. Security procedures are still deficient, Quality Control still does not exist in the Contract arena, American Casualties are still being endured because of faulty Equipment in the only active use of military personnel, and Our enemies are reportedly growing in strength and numbers. Did I forget that the American Taxpayers are paying 40% more for this inefficiency? lgl
Robert H. Frank has an article on Consumers always wanting greater quality, with the willingness to pay for it. I would agree when it was greedy Air Force officers backed by the military/industrial complex; all expecting American Taxpayers to pay for the entire load. The first article mentions that the Senate is voting this Week on the $447 billion 2007 Defense budget. It would not be so sad, except for what is this weaponry planned? It is most definitely not for Occupational duties like in Iraq and Afghanistan. Does Anyone remember Rooster Cogburn in True Grit: Too much Gun!
OPEC goes with an informal leveling of Oil production; translated: We are going to keep pumping, but you Speculators are supposed to run the Oil price up. Why is it a administration, composed of Oil Executives and Contractors whose major business is Service industries to Oil companies, cannot get Iraq (3rd largest Oil Reserves in the World) to pumping Oil again? Could it be because Oil is quoted at $63/barrel, where before it was $37/ barrel when Iraq was pumping Oil? Shame, shame--that would suggest the Corruption had seeped out of Iraq. But why is the Corruption always connected to American Corporations? No wonder We are experiencing a slowing economy.
It may be defeatist to say this, but the Management Executive performance of Oil executives seems wanting in the self-originating War on Terror. The Contracting methodology of our current Administration may do more damage than al Queda ever presented. Security procedures are still deficient, Quality Control still does not exist in the Contract arena, American Casualties are still being endured because of faulty Equipment in the only active use of military personnel, and Our enemies are reportedly growing in strength and numbers. Did I forget that the American Taxpayers are paying 40% more for this inefficiency? lgl
Wednesday, September 27, 2006
The Economy wobbles
Durable Goods dropped again after the sharp drop in August. They fell only 0.8% stripped of Defense Orders, but follows a 2.7% drop in the preceding month. The real unpleasant note come in the drop of nondefense Capital Goods of 0.3%, meaning Business feels no hurried push towards growth. This may be because of the Manufacturers' Survey which showed U.S. Manufacturers confronted Fixed Costs some 31.7% higher than their foreign Competitors, and this disparity has been growing rapidly. They face higher Corporate Taxes, higher Energy pricing (especially Natural Gas), and the health care Costs and Pension Costs of the Ageing population.
A Kaiser Trust Survey capsules the basic pressure on Small Business in provision of health care:
The cost for family coverage under an employer health plan is now $11,480, nearly double the cost in 2000 – and that cost looks to rise at a similar clip next year, two nationwide surveys show.
A NYTimes article highlights the basic attitude of most Employees, which Employers consider their enemy. Entire Route Health Care becomes impossibly high in Cost as the Population ages.
Greg Mankiw, Arnold Kling, and Tyler Cowan all weigh in on Immigration, based upon a Study.
I have a little difficulty with the Kremer premise, knowing the levels of subjugation suffered by female immigrant Household labor and withholding of promised Wages, especially in many of the greatest Importer Countries of such labor. It smells more of Indentured Servitude of the Poorest and least capable of defense. Mark Thoma provides an interesting overall article on Worker response to Inequality, but has aside views to the impact of Immigration. lgl
A Kaiser Trust Survey capsules the basic pressure on Small Business in provision of health care:
The cost for family coverage under an employer health plan is now $11,480, nearly double the cost in 2000 – and that cost looks to rise at a similar clip next year, two nationwide surveys show.
A NYTimes article highlights the basic attitude of most Employees, which Employers consider their enemy. Entire Route Health Care becomes impossibly high in Cost as the Population ages.
Greg Mankiw, Arnold Kling, and Tyler Cowan all weigh in on Immigration, based upon a Study.
I have a little difficulty with the Kremer premise, knowing the levels of subjugation suffered by female immigrant Household labor and withholding of promised Wages, especially in many of the greatest Importer Countries of such labor. It smells more of Indentured Servitude of the Poorest and least capable of defense. Mark Thoma provides an interesting overall article on Worker response to Inequality, but has aside views to the impact of Immigration. lgl
Tuesday, September 26, 2006
As the World Turns
Menzie Chinn provides some very good material. It is sad One has to wonder if she really speaks English. This Post contains really good elements, and Readers should take the time to interpret. My only comment states base Wage rates have been too sluggish, while Stock Options and Bonuses continue to expand. Craig Depken can be informed that basic Marine Enlisted Wages did not exceed about $18 per month until at least WWI. I have no Source information, but know their Wages did not reach $60/month until 1940. Tyler Cowan has a relatively good defense of the IMF, mainly consisting of questioning what We would replace it with when encountering future problems. Consumer Confidence is up, but I wonder in what exact context.
The current News is the rumble from OPEC that Oil prices are dropping too rapidly, and that Oil Speculators are trying to use it to boost Short-term Gains. The truth may be, as I reinterate may be, that OPEC cannot restrict Oil production, due to the fact such interruption of production will have even worse impact upon Investment schedules in the OPEC nations. A secondary effect impacts Consumer Confidence; Consumers expecting relief from the high Energy pricing makes up the overwhelming majority of the Confidence rise, and efforts to destabilize that decline will bring a downturn in Expenditure patterns. It would not be beneficial to either the U.S. economy, or to OPEC.
American Business must relearn lessons once taught by Economists after the Great Depression. Nothing so drastic could happen now (God forbid), but Consumer Incomes have been running behind both Business Profits and Prices for too many Years. Consumer Credit Debt still afflicts less than half of the Consumer Households, but there are two distractions from assuming well-being; those with Consumer Debt suffer high monthly payments in comparision to their Income, and those without Consumer Debt will not buy much without an increasing Income. It does not matter if there is a Money Supply constriction due to improper Government policy, or due to reasonable Household Consumption response; it still remains a constriction. lgl
The current News is the rumble from OPEC that Oil prices are dropping too rapidly, and that Oil Speculators are trying to use it to boost Short-term Gains. The truth may be, as I reinterate may be, that OPEC cannot restrict Oil production, due to the fact such interruption of production will have even worse impact upon Investment schedules in the OPEC nations. A secondary effect impacts Consumer Confidence; Consumers expecting relief from the high Energy pricing makes up the overwhelming majority of the Confidence rise, and efforts to destabilize that decline will bring a downturn in Expenditure patterns. It would not be beneficial to either the U.S. economy, or to OPEC.
American Business must relearn lessons once taught by Economists after the Great Depression. Nothing so drastic could happen now (God forbid), but Consumer Incomes have been running behind both Business Profits and Prices for too many Years. Consumer Credit Debt still afflicts less than half of the Consumer Households, but there are two distractions from assuming well-being; those with Consumer Debt suffer high monthly payments in comparision to their Income, and those without Consumer Debt will not buy much without an increasing Income. It does not matter if there is a Money Supply constriction due to improper Government policy, or due to reasonable Household Consumption response; it still remains a constriction. lgl
Monday, September 25, 2006
Short Review
Readers should access an article from the Christian Science Monitor by David R. Francis. Congress is still playing Politics with the Budget, and has little hope of cutting down the budget's overall size, even after the November Elections. (sense of proportion: elimination of all dicriminatory Spending--without touching Social Security, Medicaid, and Medicare--would not equal the 33% increase in Federal Spending brought by George W.'s first term).
Arnold Kling again provides an essential Read on the problem of financing Medicare. I, though, contend the necessity of universal provision in Health Care, as does Krugman. My proposal has always been to provide Health Care through the basic Necessities, then have private health insurance handle all expensive exotic care.
Ritholtz brings the Oil Prices decline into prospective. The major reason I advocate, though, he did not list; the level of production at Oil-producing and Oil-refining facilities has been dropping off full production.
An Associated Press article is unremarkable except for two Quotes here listed:
The conflict, now in its fourth year, has claimed the lives of more than 2,600 American troops and cost more than $300 billion.
a government-produced National Intelligence Estimate became public that concluded the war has helped create a new generation of Islamic radicalism and that the overall terrorist threat has grown since the attacks of Sept. 11, 2001.
Synopsis: The Iraq/Afghanistan Wars have not met any of the criterea advanced for a War on Terror, or have they attained any of the Mission Goals of the Military and White House. The Bush Tax Cuts would not have been attainable within a balanced Budget, even if the foreign wars had been canceled. Even the Oil Speculators have become sceptical (or weary) over the continuous Crisis exhortation of the current administration. Arnold Kling can still be counted on for a judicious assessment, but he may be among the last of the honest of the Conservative stripe. Why does the current leadership so remind of the Nazi hierarchy in the Period 1943-45? lgl
Arnold Kling again provides an essential Read on the problem of financing Medicare. I, though, contend the necessity of universal provision in Health Care, as does Krugman. My proposal has always been to provide Health Care through the basic Necessities, then have private health insurance handle all expensive exotic care.
Ritholtz brings the Oil Prices decline into prospective. The major reason I advocate, though, he did not list; the level of production at Oil-producing and Oil-refining facilities has been dropping off full production.
An Associated Press article is unremarkable except for two Quotes here listed:
The conflict, now in its fourth year, has claimed the lives of more than 2,600 American troops and cost more than $300 billion.
a government-produced National Intelligence Estimate became public that concluded the war has helped create a new generation of Islamic radicalism and that the overall terrorist threat has grown since the attacks of Sept. 11, 2001.
Synopsis: The Iraq/Afghanistan Wars have not met any of the criterea advanced for a War on Terror, or have they attained any of the Mission Goals of the Military and White House. The Bush Tax Cuts would not have been attainable within a balanced Budget, even if the foreign wars had been canceled. Even the Oil Speculators have become sceptical (or weary) over the continuous Crisis exhortation of the current administration. Arnold Kling can still be counted on for a judicious assessment, but he may be among the last of the honest of the Conservative stripe. Why does the current leadership so remind of the Nazi hierarchy in the Period 1943-45? lgl
Sunday, September 24, 2006
Trade and Pollution
Readers should read James Hamilton about Government interference in normal Business practice, and Greg Mankiw and Phil Swagel's definition of the use of Zeroing in application of anit-dumping duties. The above Posts highlight injurious use of Government management on efficient Business practice. Special Interest agendas and political power grabs can be introduced, solely through the methodology of Government agencies. Unrestrained use of this power violates the rights of Property, and nullifies Investment opprotunities.
Walmart announces a more sensible program as well as the $4 Proscription program. They are trying to reduce their Packaging volume by 5%. It stands as a Step in the right direction, but it could even be improved. The mode of the future will be bulk Shipping. Walmart is trying to place the Investment Costs upon the Suppliers with this plan, which is a demerit to the Plan. Walmart should consider in-Store Individual Packaging. It would markedly lower Supplier Costs to bulk Ship, It would raise Walmart labor rolls but provide ability to provide more source employment (creating their own Consumer market), and allow Walmart to provision higher Wages and Benefits. Walmart could extend these facilities to other Retailers, as well as their Suppliers--a potential Profits avenue. An efficent program would lower Operating Costs, bring a resurgence to the Manufacturing base in the United States, reduce Landfill demands, and could reduce Packaging Costs by maybe 30%.
The Walmart program to capture the Proscription market with a cheap Series of Proscriptions will be matched by Competitors (Target already leading the way). A very effective counter-plan could be easily implemented by the major Retailers. Walmart and other Retailers who capture a large volume of their Customers' Incomes, should offer a Proscription plan paid by a 5% premium paid on all Products purchased, it directed to the Customer's Proscription Plan, and applied against all Proscriptions purchased through their Outlet. Such a Plan would have to be entirely Voluntary, but subscription to the Plan would rapidly spread as Customers could detail the real reduction of oversize Proscription purchases (high Cash outlays). lgl
Walmart announces a more sensible program as well as the $4 Proscription program. They are trying to reduce their Packaging volume by 5%. It stands as a Step in the right direction, but it could even be improved. The mode of the future will be bulk Shipping. Walmart is trying to place the Investment Costs upon the Suppliers with this plan, which is a demerit to the Plan. Walmart should consider in-Store Individual Packaging. It would markedly lower Supplier Costs to bulk Ship, It would raise Walmart labor rolls but provide ability to provide more source employment (creating their own Consumer market), and allow Walmart to provision higher Wages and Benefits. Walmart could extend these facilities to other Retailers, as well as their Suppliers--a potential Profits avenue. An efficent program would lower Operating Costs, bring a resurgence to the Manufacturing base in the United States, reduce Landfill demands, and could reduce Packaging Costs by maybe 30%.
The Walmart program to capture the Proscription market with a cheap Series of Proscriptions will be matched by Competitors (Target already leading the way). A very effective counter-plan could be easily implemented by the major Retailers. Walmart and other Retailers who capture a large volume of their Customers' Incomes, should offer a Proscription plan paid by a 5% premium paid on all Products purchased, it directed to the Customer's Proscription Plan, and applied against all Proscriptions purchased through their Outlet. Such a Plan would have to be entirely Voluntary, but subscription to the Plan would rapidly spread as Customers could detail the real reduction of oversize Proscription purchases (high Cash outlays). lgl
Saturday, September 23, 2006
Framing
Greg Mankiw, who is going to think I am picking on him though I am not, rewrites Ip's paraphrase in an article in the WSJ. I will not provide the Ip Quote which was truely wrong, but I will provide the Mankiw Rewrite:
From 2000 to 2004, the average tax rate for all taxpayers fell from 15.3% to 12.1%, representing 21% tax cut. The tax rate of the richest 1% fell from 27.5% to 23.5%, a 15% tax cut. For the bottom 50%, the tax rate fell from 4.6% to 3%, a 35% tax cut. As a result of these changes, the top 1% paid a larger share of the tax burden in 2004 than it did four years earlier, and the bottom 50 percent paid a smaller share.
A clear Statement is it not?--Not! It says much, and little. Greg fails to provide actual numbers on the Average Cost of the Household Budget for each Income group. He does not compute the real Tax Cut Savings of both Percentages (15% and 35%), or the ratios of 15%a/ACHa and 35%b/ACHb. This is the real computation of Household contribution to the Public Debt accumulated by the Tax Cuts. Greg Mankiw also did not provide information as to the Percentage of the Public Debt attributable to the Tax Cuts; which Liberals and Democrats perhaps rightly claim as future Taxes.
Simple honesty brings the admission that I also did not make the computations involved, but to provide Greg's overtly primitive calculations as adequate to understand this Tax process, also consists of artificial framing of the Problem; though Mankiw may possess the greater justification for his analysis. lgl
From 2000 to 2004, the average tax rate for all taxpayers fell from 15.3% to 12.1%, representing 21% tax cut. The tax rate of the richest 1% fell from 27.5% to 23.5%, a 15% tax cut. For the bottom 50%, the tax rate fell from 4.6% to 3%, a 35% tax cut. As a result of these changes, the top 1% paid a larger share of the tax burden in 2004 than it did four years earlier, and the bottom 50 percent paid a smaller share.
A clear Statement is it not?--Not! It says much, and little. Greg fails to provide actual numbers on the Average Cost of the Household Budget for each Income group. He does not compute the real Tax Cut Savings of both Percentages (15% and 35%), or the ratios of 15%a/ACHa and 35%b/ACHb. This is the real computation of Household contribution to the Public Debt accumulated by the Tax Cuts. Greg Mankiw also did not provide information as to the Percentage of the Public Debt attributable to the Tax Cuts; which Liberals and Democrats perhaps rightly claim as future Taxes.
Simple honesty brings the admission that I also did not make the computations involved, but to provide Greg's overtly primitive calculations as adequate to understand this Tax process, also consists of artificial framing of the Problem; though Mankiw may possess the greater justification for his analysis. lgl
Friday, September 22, 2006
Conflicts
The political process of Consensus seems like the greatest victim today. Bush, Musharrif, and Karzai are having a diplomatic conflict. Bush sided with Musharrif in his Agreement with the Tribes along the border, after Musharrif claims the U.S. Government threatened to bomb Pakistan back to the Stone Ages if he did not join Bush's War on Terror; Karzai claiming that Musharrif was making a deal with the Tribes who supported the Talibon. Hamas refuses to back their President's claim to recognize Israel. The Army is split between Donald Rumfield's desire to maintain current Force size, Army Command, National Guard Command, and retired Army officers over the Force readiness of the current Army. PGL at Angry Bear even highlights some of the conflict on Inequality on the Net.
Analysis: Bush is willing to sell out Karzai in order to get Musharrif to help capture ben Laden; I still estimate ben Laden could best be found sitting in a villa in Saudi Arabia. No Representative of Hamas could ever to expected to recognize the State of Israel, assasination being too prevalent in the warm, sunny land of the Gaza Strip. The retired Army officers are the only ones who can speak honestly about the Army, everyone else has either an out-of-date axe to grind, or suffer the threat of removal. The National Guard will likely get the shaft again, as it is the politically-expedient thing to do, and will again go to Iraq and Afghanistan underequipped and understaffed. In any case, nothing will be done until after the interim Elections in November. lgl
Analysis: Bush is willing to sell out Karzai in order to get Musharrif to help capture ben Laden; I still estimate ben Laden could best be found sitting in a villa in Saudi Arabia. No Representative of Hamas could ever to expected to recognize the State of Israel, assasination being too prevalent in the warm, sunny land of the Gaza Strip. The retired Army officers are the only ones who can speak honestly about the Army, everyone else has either an out-of-date axe to grind, or suffer the threat of removal. The National Guard will likely get the shaft again, as it is the politically-expedient thing to do, and will again go to Iraq and Afghanistan underequipped and understaffed. In any case, nothing will be done until after the interim Elections in November. lgl
Thursday, September 21, 2006
Minimum Wage Effect
Hal R. Varian provides access to the Works of James K. Galbraith and Travis Hale .
(UTIP No.11) provides the following comment:
In this paper we show that inequality and unemployment are related positively across the European continent, within countries, between countries and through time. This contradicts the often-repeated view that unemployment in Europe is attributable to rigid wage structures, high minimum wages and generous social welfare systems. In fact, countries that possess the low inequality such systems produce experience less unemployment than those that do not. Moreover, large inter-country inequalities across Europe aggravate the continental unemployment problem. There is no paradox in low American unemployment. It stems in part from that country’s continent-wide programs of redistribution, including the Social Security System, the Earned Income Tax Credit, the federal minimum wage, and a uniform regime of monetary policy geared toward full employment, all of which reduce inter-regional inequality and all of which we recommend for adoption by the European Union
This is an older Paper (1998), but the intrinsic thesis that Minimum Wages increases and provision of Welfare services actually increase Employment, due to the fact that it increases the Opprotunity Cost of leaving Low-Wage Employment, seems sound.
Greg Mankiw makes a better argument for equalization of the Rich cross-Country, than for a reduction of Inequality, as the Source he cites confirms that In-Country Inequality is growing almost everywhere.
Baseline: There is undoubted increased Inequality, though the universality of the Trends throughout the World simply indicate the integration of the World Economy. The invection of Conservatives against current Welfare programs, on the other hand, actually works to their disadvantage; promoting Immigration (consistent with longterm increase of Welfare Costs) and increasing Labor mobility (consistent with rising Wage demands). lgl
(UTIP No.11) provides the following comment:
In this paper we show that inequality and unemployment are related positively across the European continent, within countries, between countries and through time. This contradicts the often-repeated view that unemployment in Europe is attributable to rigid wage structures, high minimum wages and generous social welfare systems. In fact, countries that possess the low inequality such systems produce experience less unemployment than those that do not. Moreover, large inter-country inequalities across Europe aggravate the continental unemployment problem. There is no paradox in low American unemployment. It stems in part from that country’s continent-wide programs of redistribution, including the Social Security System, the Earned Income Tax Credit, the federal minimum wage, and a uniform regime of monetary policy geared toward full employment, all of which reduce inter-regional inequality and all of which we recommend for adoption by the European Union
This is an older Paper (1998), but the intrinsic thesis that Minimum Wages increases and provision of Welfare services actually increase Employment, due to the fact that it increases the Opprotunity Cost of leaving Low-Wage Employment, seems sound.
Greg Mankiw makes a better argument for equalization of the Rich cross-Country, than for a reduction of Inequality, as the Source he cites confirms that In-Country Inequality is growing almost everywhere.
Baseline: There is undoubted increased Inequality, though the universality of the Trends throughout the World simply indicate the integration of the World Economy. The invection of Conservatives against current Welfare programs, on the other hand, actually works to their disadvantage; promoting Immigration (consistent with longterm increase of Welfare Costs) and increasing Labor mobility (consistent with rising Wage demands). lgl
Wednesday, September 20, 2006
Hiring Patterns
The EPI Snapshot by Bernstein and Bivens states that Manufacturing has been losing both Jobs and Wages, over the last year in the later case, and since 1998 for Jobs. Steven Pearlstein at the Washington Post claims Advertising is descending to young Kids in blue jeans and upstart firms on low Wages and Profit margins. Michael Mandel states that since 2003, Health Care has accounted for 80% of private sector Job creation. Phil Miller comments on success viability of Product Reps by stating: "Yes, Virginia. There are diminishing returns, even to donuts." I will finish with a short pass into School Breakfasts.
What does this mismah tell Us?
The real Trend in Jobs Creation, even Health Care, has come in the form of Sales Representatives. This Author does not know if he could find requisite data on the numbers of new Jobs in the field of Product Representation, but he knows it must be the fastest growing industry in the Economy. Miller discusses the double appearance of WSJ Sales Reps with Donuts. Mothers, Taxpayers, and even probably Congress, did not intend for dry Cereal and Juice in a Box for Breakfast when they allocated $2 bn for School Breakfasts. Advertising has descended to Sales Reps with High School education lecturing Doctors over Lunch on the value of their Product line. What is the exact definition of Job Creation?
The bad old Days of an Office call for Lunch or Coffee Break with Order delivery by Messinger seems to be over. It is social misconduct Today to suggest some Employee may hold some inferior position like delivering Orders. My Thought, though, contends it is the same old Messinger Boy or Girl, but now, they must sing and dance while you eat. lgl
What does this mismah tell Us?
The real Trend in Jobs Creation, even Health Care, has come in the form of Sales Representatives. This Author does not know if he could find requisite data on the numbers of new Jobs in the field of Product Representation, but he knows it must be the fastest growing industry in the Economy. Miller discusses the double appearance of WSJ Sales Reps with Donuts. Mothers, Taxpayers, and even probably Congress, did not intend for dry Cereal and Juice in a Box for Breakfast when they allocated $2 bn for School Breakfasts. Advertising has descended to Sales Reps with High School education lecturing Doctors over Lunch on the value of their Product line. What is the exact definition of Job Creation?
The bad old Days of an Office call for Lunch or Coffee Break with Order delivery by Messinger seems to be over. It is social misconduct Today to suggest some Employee may hold some inferior position like delivering Orders. My Thought, though, contends it is the same old Messinger Boy or Girl, but now, they must sing and dance while you eat. lgl
Tuesday, September 19, 2006
Radical Surgery
One of the things I detest about Friends comes in their ability to ask sensible Questions (perhaps even worse than Students). An old Friend (yes, even the socially-destitute have a few) asked one of these typically insensitive Questions: How could fiscal policy be altered to boost the Economy under present conditions, in the face of a falling Dollar? I cannot guarantee that was the exact phrasing of the Question, but I mentally translated it as: How do you fix the Economy if it effectively blows because of a sliding Dollar?
Readers know any decent Economist would not touch either Firecracker with a long, long Pole. I, on the other hand, feel a Commitment to answer the essential Question (yah, Right!). Inquiring minds want to know, and all that. Reputations are never made, and easily lost, providing illustrative thought on such grand sweeps of Intellect. The irreverent thought suggests boldness, as something cannot be lost, if never gained.
The first element of fiscal policy change must be to get your own house in order. This means introduction of a fiscal program where Tax revenues exceed Federal Expenditures. It is so easy to say, isn't it? I would reduce the Tax rates to payment of Social Security taxes for Incomes less than $20,000/year, 10% for Income between $20,000-$30,000/year, 20% for Income between $30,000-50,000/year, and 30% for Income between $50,000-100,000/year, 35% for Income above $100,000/year.
The second element of fiscal policy change would nullify all Tax deductions, exemptions, credits, and removals of any type from the taxable base of Income: this means no Mortgage credits (slowly evaporating grandfathering here), personal deductions ($2000 Exemption for every Child under 18 resident in the Household, and every Adult over 70 resident in the Household--the only reductions of tax base allowed), elimination of all 401(k), IRAs, Keoughs, etc., and elimination of the special status of Capital Gains taxation (hereafter considered as simple Income). A universal Docking Fee or Tax will be assessed on all Imports at 3% of registered Value (used both for Docking Fee and normal Business Cost deductions) also to be introduced. This is it for tax policy.
The added Tax revenues, along with strong curtailment of Legislative and Presidential Spending, will bring fiscal Solvency. One might ask how one can curb Legislative and Presidential Spending, and I provide a Constitutional Amendment:
No member of Congress or Presidency can stand for ReElection to Office, if any Budget Year of their previous Term of Office was in Deficit except in a Budget Year of Declared War by the Senate.
The Problem resoves itself from this Point on. Business Profits would begin to drop, Consumer Spending would increase--creating Jobs, Business Investment would be based upon Business Comparative Advantage--instead of gaining Tax reduction, and the Federal Government would begin the slow process of fiscal responsibility. lgl
Readers know any decent Economist would not touch either Firecracker with a long, long Pole. I, on the other hand, feel a Commitment to answer the essential Question (yah, Right!). Inquiring minds want to know, and all that. Reputations are never made, and easily lost, providing illustrative thought on such grand sweeps of Intellect. The irreverent thought suggests boldness, as something cannot be lost, if never gained.
The first element of fiscal policy change must be to get your own house in order. This means introduction of a fiscal program where Tax revenues exceed Federal Expenditures. It is so easy to say, isn't it? I would reduce the Tax rates to payment of Social Security taxes for Incomes less than $20,000/year, 10% for Income between $20,000-$30,000/year, 20% for Income between $30,000-50,000/year, and 30% for Income between $50,000-100,000/year, 35% for Income above $100,000/year.
The second element of fiscal policy change would nullify all Tax deductions, exemptions, credits, and removals of any type from the taxable base of Income: this means no Mortgage credits (slowly evaporating grandfathering here), personal deductions ($2000 Exemption for every Child under 18 resident in the Household, and every Adult over 70 resident in the Household--the only reductions of tax base allowed), elimination of all 401(k), IRAs, Keoughs, etc., and elimination of the special status of Capital Gains taxation (hereafter considered as simple Income). A universal Docking Fee or Tax will be assessed on all Imports at 3% of registered Value (used both for Docking Fee and normal Business Cost deductions) also to be introduced. This is it for tax policy.
The added Tax revenues, along with strong curtailment of Legislative and Presidential Spending, will bring fiscal Solvency. One might ask how one can curb Legislative and Presidential Spending, and I provide a Constitutional Amendment:
No member of Congress or Presidency can stand for ReElection to Office, if any Budget Year of their previous Term of Office was in Deficit except in a Budget Year of Declared War by the Senate.
The Problem resoves itself from this Point on. Business Profits would begin to drop, Consumer Spending would increase--creating Jobs, Business Investment would be based upon Business Comparative Advantage--instead of gaining Tax reduction, and the Federal Government would begin the slow process of fiscal responsibility. lgl
Monday, September 18, 2006
Depressing
Those who want to darken their Day should try this link which informs the current political elite for the umpteenth time that fiscal policy remains unsustainable. It is most remarkable in it comes from the Congressional Budget Office, who are tasked with informing Congress about potential tragic endings of Congressional action. It stands clear that the CBO perform as efficiently as Everyone else in warning of disaster ahead. Don't you just love the Federal Government?
The Newspapers are alive Today with the Current Accounts imbalances. Like this was a problem which only showed this morning. Many have warned of shipping all those Treasuries overseas, in exchange for Consumer Goods; Things which are not remaining as cheap as they once were. Simply put: We need those 3 million Manufacturing Jobs back! Those Jobs would have generated a probable increase of 7 million Jobs since 2000. American Consumers, though, listened to the Free Traders, who told Americans they could get something for nothing--i.e., half-Price.
Many Free Traders still don't get it. You can still find Calls for devaluation of the Dollar. They cannot understand one simple fact: if you cut the value of the Dollar in half, it is just like Tax Cuts, Profits (identical to Tax revenues) are not going to double fast enough to save the current economic positions of Those grounded in Dollar incomes. The current situation is explosive in that the Current Accounts imbalances could trigger a slide in the value of the Dollar; one that might not cease before an economic stability can be achieved. We may be looking at higher Consumer Prices joined with suppressed Labor Rolls, and a huge drop in the Dollar.
Government intervention seems hardly viable; the Federal Government being the greatest Debtor in the World, the economy producing declining Profits under this Scenario, falling Employment, with the current methods of generating Business Profits being the culprit behind the situation. The American Taxpayers may find themselves paying $7-8 in future taxes, for each dollar they saved in the Bush Tax Cuts; in a time where those dollars are just as hard to earn. lgl
The Newspapers are alive Today with the Current Accounts imbalances. Like this was a problem which only showed this morning. Many have warned of shipping all those Treasuries overseas, in exchange for Consumer Goods; Things which are not remaining as cheap as they once were. Simply put: We need those 3 million Manufacturing Jobs back! Those Jobs would have generated a probable increase of 7 million Jobs since 2000. American Consumers, though, listened to the Free Traders, who told Americans they could get something for nothing--i.e., half-Price.
Many Free Traders still don't get it. You can still find Calls for devaluation of the Dollar. They cannot understand one simple fact: if you cut the value of the Dollar in half, it is just like Tax Cuts, Profits (identical to Tax revenues) are not going to double fast enough to save the current economic positions of Those grounded in Dollar incomes. The current situation is explosive in that the Current Accounts imbalances could trigger a slide in the value of the Dollar; one that might not cease before an economic stability can be achieved. We may be looking at higher Consumer Prices joined with suppressed Labor Rolls, and a huge drop in the Dollar.
Government intervention seems hardly viable; the Federal Government being the greatest Debtor in the World, the economy producing declining Profits under this Scenario, falling Employment, with the current methods of generating Business Profits being the culprit behind the situation. The American Taxpayers may find themselves paying $7-8 in future taxes, for each dollar they saved in the Bush Tax Cuts; in a time where those dollars are just as hard to earn. lgl
Sunday, September 17, 2006
Lost Time
I seem to have messed up my computer again, so it will take some qualified help to get my address box back again, and Links will be hard to access until it is regained. I decided to discuss Bush's great Push to give him the power to try Prisoners by military tribunal. It is of interest basically because the Beltway never talks about the actual Issues, because such clarity might interject genuine American involvement in the political process.
Take this Proposed action: Bush claims the need to throughly interrogate these Prisoners. The Opposition charges there is need to protect the Geneva Conventions. Real Reasons: Bush lacks the evidence to get any of the Defendents convicted under current American Judicial rules. The Opposition wants to see Bush and his gunment fall flat on their faces. The Bush Case against most Internees rests on Rumors, Informers, and innuendo. Hard evidence is lacking, even though Interrogators used all means possible already. Bush wants a controlled Court proceeding, one restricted even in terms of Press Coverage. The Opposition wants to highlight the ineffectiveness of the Bush team.
Are the Internees guilty? Some of them most definitely are guilty, many of them are innocent. No one wants the guilty ones set free, but there are many Innocent among them. How many? This author would expect about half were only in the wrong place at the wrong time, their sole crime was being stupid; lacking good excuse at the time. The Bush administration sees release of any more Internees as bad publicity; remember, they have been locked up a long time, without Charge or provision of basic Civil Liberties. The Innocents have turned into pawns in a political Chess game.
The entire reign of the two later Bush administrations seem a real disappointment to the American people. They entered Washington with such Promise to alter the Beltway format, and yet, Six years brought only massive Public Debt, a stranglehold over the Political Process by Special Interests, and two continuing Wars each of which have occasioned more Casualties since the advertised Cessation of Hostilities than during the Period of politically-defined War. The answer to all Problems of the Bush administrations resides in the immortal Words of Bush himself: We must stay the Course. One has to ask: What is the Course, and why is it worth staying on? lgl
Take this Proposed action: Bush claims the need to throughly interrogate these Prisoners. The Opposition charges there is need to protect the Geneva Conventions. Real Reasons: Bush lacks the evidence to get any of the Defendents convicted under current American Judicial rules. The Opposition wants to see Bush and his gunment fall flat on their faces. The Bush Case against most Internees rests on Rumors, Informers, and innuendo. Hard evidence is lacking, even though Interrogators used all means possible already. Bush wants a controlled Court proceeding, one restricted even in terms of Press Coverage. The Opposition wants to highlight the ineffectiveness of the Bush team.
Are the Internees guilty? Some of them most definitely are guilty, many of them are innocent. No one wants the guilty ones set free, but there are many Innocent among them. How many? This author would expect about half were only in the wrong place at the wrong time, their sole crime was being stupid; lacking good excuse at the time. The Bush administration sees release of any more Internees as bad publicity; remember, they have been locked up a long time, without Charge or provision of basic Civil Liberties. The Innocents have turned into pawns in a political Chess game.
The entire reign of the two later Bush administrations seem a real disappointment to the American people. They entered Washington with such Promise to alter the Beltway format, and yet, Six years brought only massive Public Debt, a stranglehold over the Political Process by Special Interests, and two continuing Wars each of which have occasioned more Casualties since the advertised Cessation of Hostilities than during the Period of politically-defined War. The answer to all Problems of the Bush administrations resides in the immortal Words of Bush himself: We must stay the Course. One has to ask: What is the Course, and why is it worth staying on? lgl
Saturday, September 16, 2006
Tyler Cowan thinks that the Jacob Hacker book, The Great Risk Shift, evolves into a weak treatment of what Tyler considers to be the relevant Issues. The main argument of the Book, as defined by Cowan, remains "American incomes has been growing steadily riskier." I can agree with the intent of the Book, but not with the actuality of American incomes growing riskier.
Study of the article of Hacker’s linked by Tyler brings on the Quote:
The title of the project, "The Privatization of Risk" (Hacker 2004), is meant to capture two linked trends in the management of economic risk in the United States. The first is the contemporary celebration of the private sector as the first and best means of dealing with problems of all kinds. This enthusiasm for private-sector solutions is nothing new. In the United States, the belief that private commercial institutions should deal with economic risks goes way back, and is deeply rooted in our political culture and in the framework of social policies that have arisen in our nation (Hacker 2002). Yet today the enthusiasm for the private sector is joined with a sometimes unbridled faith that new technologies and new attitudes have finally "solved" the problems of risk management that once bedeviled private insurers and financial institutions. In this ascendant credo, not only should the private sector manage major risks; it can do it better than it ever has—and, needless to say, better than government ever could.
Hacker is correct in assuming risk is a social condition, but the assumption that the Private Sector provide the best mileau for risk management ignores the actual involvement of Government in those Private Sector solutions. Business investment and involvement would not be so risk-free without Government involvement in risk management. Business can reduce Tax assessments, forward and backward, with any incurred losses. The new Bankruptcy laws, State and Federal, hold American Households strictly accountable, but continue the venue of removing business management risk by wide salvation of Business assets under Bankruptcy. Courts further the process with denial of contracted Labor rights, while rigidly upholding the rights of Investors and Debt Carriers; though invariably, it is Labor which bears the greatest real (v. nominal) risk. Truly, Business has sloughed risk off upon American Households by shedding Contractual commitments and forcing higher Consumer prices.
Also check the link on Tyler’s site to Arnold Kling. Here again We hear about dastardly Government protection of Households, and the threat to Business enterprise; this time by granting protection to the Households. This despite rigorous Bankruptcy restriction for personal income, unless of course, it is Investment losses; here, poor victimized Investors can find removal of current Taxes, recoup previous Tax payments, and have deductions for future Taxation. We have not even entered into the realm of 401(k)s, Koughs, IRAs, etc., and the huge advantage of altering Income risk to Investment risk. lgl
Study of the article of Hacker’s linked by Tyler brings on the Quote:
The title of the project, "The Privatization of Risk" (Hacker 2004), is meant to capture two linked trends in the management of economic risk in the United States. The first is the contemporary celebration of the private sector as the first and best means of dealing with problems of all kinds. This enthusiasm for private-sector solutions is nothing new. In the United States, the belief that private commercial institutions should deal with economic risks goes way back, and is deeply rooted in our political culture and in the framework of social policies that have arisen in our nation (Hacker 2002). Yet today the enthusiasm for the private sector is joined with a sometimes unbridled faith that new technologies and new attitudes have finally "solved" the problems of risk management that once bedeviled private insurers and financial institutions. In this ascendant credo, not only should the private sector manage major risks; it can do it better than it ever has—and, needless to say, better than government ever could.
Hacker is correct in assuming risk is a social condition, but the assumption that the Private Sector provide the best mileau for risk management ignores the actual involvement of Government in those Private Sector solutions. Business investment and involvement would not be so risk-free without Government involvement in risk management. Business can reduce Tax assessments, forward and backward, with any incurred losses. The new Bankruptcy laws, State and Federal, hold American Households strictly accountable, but continue the venue of removing business management risk by wide salvation of Business assets under Bankruptcy. Courts further the process with denial of contracted Labor rights, while rigidly upholding the rights of Investors and Debt Carriers; though invariably, it is Labor which bears the greatest real (v. nominal) risk. Truly, Business has sloughed risk off upon American Households by shedding Contractual commitments and forcing higher Consumer prices.
Also check the link on Tyler’s site to Arnold Kling. Here again We hear about dastardly Government protection of Households, and the threat to Business enterprise; this time by granting protection to the Households. This despite rigorous Bankruptcy restriction for personal income, unless of course, it is Investment losses; here, poor victimized Investors can find removal of current Taxes, recoup previous Tax payments, and have deductions for future Taxation. We have not even entered into the realm of 401(k)s, Koughs, IRAs, etc., and the huge advantage of altering Income risk to Investment risk. lgl
Friday, September 15, 2006
Benedict, and the Drop
''The emperor comes to speak about the issue of jihad, holy war,'' the pope said. ''He said, I quote, 'Show me just what Muhammad brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached.'''
The Pope went overboard with this Quote? Study of history relates Islam started innumerable wars of conquest against their neighbors until they covered N. Africa, Spain, the Balkans, and east into India. The Crusades were as much a reaction to the previous and enduring Muslim conquests, as it was an attempt to free the Holy Shrines in Palestine. Every Christian forced into Islamic society suffered some degree of discrimination and suppression during these Conquests, and the military reConquest of Spain was also called a Crusade.
It is admitted even by Muslims that Islam co-opted much of both Judeaism and Christianity. We must now contemplate whether a military attack upon a neighbor because of conflict between native and foreign religious beliefs should be considered as evil and inhuman by any religion. I must ask further if Terrorist bombs and assasinations are humane or good? The Pope, himself, lacks much in the way of divinity, the question of whether he previously belonged to Nazi institutions is still hanging. His Remarks, though, cannot be considered inflamatory in the light of previous history between Christianity and Islam.
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U.S. Output in factories, Utilities, and Mines dropped by 0.1% in August. I would suggest Reuters check with the Weather Service, August is not a cooler month. I would continue to comment that the drop alone could come from reduced Energy prices. The lack of Gain, though, probably comes from reducing Business confidence, fed by increasing Inventories--which I have not checked by the way. The Consumers seem to be drifting. Is this a Problem? Far too early to tell, the real Telling Point will be early Christmas Sales. lgl
The Pope went overboard with this Quote? Study of history relates Islam started innumerable wars of conquest against their neighbors until they covered N. Africa, Spain, the Balkans, and east into India. The Crusades were as much a reaction to the previous and enduring Muslim conquests, as it was an attempt to free the Holy Shrines in Palestine. Every Christian forced into Islamic society suffered some degree of discrimination and suppression during these Conquests, and the military reConquest of Spain was also called a Crusade.
It is admitted even by Muslims that Islam co-opted much of both Judeaism and Christianity. We must now contemplate whether a military attack upon a neighbor because of conflict between native and foreign religious beliefs should be considered as evil and inhuman by any religion. I must ask further if Terrorist bombs and assasinations are humane or good? The Pope, himself, lacks much in the way of divinity, the question of whether he previously belonged to Nazi institutions is still hanging. His Remarks, though, cannot be considered inflamatory in the light of previous history between Christianity and Islam.
------------------------------------------
U.S. Output in factories, Utilities, and Mines dropped by 0.1% in August. I would suggest Reuters check with the Weather Service, August is not a cooler month. I would continue to comment that the drop alone could come from reduced Energy prices. The lack of Gain, though, probably comes from reducing Business confidence, fed by increasing Inventories--which I have not checked by the way. The Consumers seem to be drifting. Is this a Problem? Far too early to tell, the real Telling Point will be early Christmas Sales. lgl
Thursday, September 14, 2006
The Mad Hatter
Reuters highlights "a larger-than-expected $64.61 billion federal budget deficit in August", based upon record Expenditures and a year-over-year decline in Receipts. David Artig posts some good commentary on the Reuters' article. I will be generous and simply state that the Bush administration's claim to halving the Deficit was based upon increased Tax receipts, which in all fairness, some Economists still predict based on lower Energy prices inciting a rapid rise in Consumer Spending, with resultant increase in Tax Receipts. Those Consumers, though, do not have rising equity in their Homes, face increasing Consumer Prices in other Goods, are awaiting Heating bills of winter, and possess a relative New Product mix with unused months of Product life. This Author has yet to see the benefits of Tax Cuts.
One of the few Tax Cuts which the Author does think make sense tries to help with the Cattle herd replacement after the Drought. This will not be a simple quest, as the Drought has been of long duration, and the Breed herds have also been cut. Restocking will eventually prove that there will not be Capital Gains, but Expensed Losses, simply to regain previous position for these Cattlemen.
The IMF is beginning to feel sorry for the United States, dropping its forecast from a growth rate of 3.3% for 2007 down to 2.9%. This Author rattles the Dice, and could come up with an even lower rate of growth: 2.1%. Lack of Consumer Sales growth combined with nominal declines in Energy Costs will detract from both nominal and real growth rates for the United States. Luckily, I am mostly wrong when I am not asleep. lgl
One of the few Tax Cuts which the Author does think make sense tries to help with the Cattle herd replacement after the Drought. This will not be a simple quest, as the Drought has been of long duration, and the Breed herds have also been cut. Restocking will eventually prove that there will not be Capital Gains, but Expensed Losses, simply to regain previous position for these Cattlemen.
The IMF is beginning to feel sorry for the United States, dropping its forecast from a growth rate of 3.3% for 2007 down to 2.9%. This Author rattles the Dice, and could come up with an even lower rate of growth: 2.1%. Lack of Consumer Sales growth combined with nominal declines in Energy Costs will detract from both nominal and real growth rates for the United States. Luckily, I am mostly wrong when I am not asleep. lgl
Wednesday, September 13, 2006
Means Testing and SS
The Internet starts to show some life in the debate of Social Security Means-Testing, and Everyone reading this Author regularly knows I am not afraid to jump off the Deep-end of the Pool. I have come up with yet another potential method to correct the imbalance of the Social Security Fund. First, one needs to study the demographics of the SS system, though, else Many will achieve a misconception as to the system. The System, as originally designed, implicitly utilized the Mortality or Death rate in its conception; no one believing then or since that the System could afford to pay Everyone who had paid in full benefits. Call this the Mortician's dilemma (similar to the Prisoner's dilemma--just more morbid). The System would work and pay for itself, if and only if enough Insured died before funds were oversourced.
What has happened? Medicine has brought on the Mortician's dilemma, People are not only living to draw SS benefits, but they are living to draw benefits for a unheard of time previously. Many have been the Calls: extend the Minimum Age which one would need to start drawing benefits, restrict Payments to only Those who need it, and cut benefits so that the social insurance is insufficient anyway. Along comes lgl, with an indecent Proposal.
Build in automatic Means Testing, square in the basic component of the System?--How?
Alteration of the Mandate: simply stating all Participants will be Means tested throughout the history of their life. All Participants will be taxed at their current assessments, not even have the level of taxation upon their Income raised. The Change would come in the acquired equity of the Insured. Each Participant will be charged $3500 per $100,000 worth of equity he or she attains; said assessment by request of Insured would be drawn from SS Withholding, or can be paid in lump sum to the Social Security Administration. Failure to pay this SS assessment will delay receipt of Benefits until the assessed amount equals the lost monthly Benefits from delayed receipt of Benefits.
What have We gained?
No one pay on the first $100,000 of equity. Those with more than $100,000 in equity must pay $3500, until they have equity of $200k, where they will pay $7k. One million dollars in equity will cost the Insured $31,500 in added SS tax. The Tax continues to add up to $ infinity, until such time as the Wealthy Insured finds no benefit from the SS system; but they still have to pay the base tax. The SS Fund deficit suddenly disappears, and Everyone other than the Insured are happy. lgl
What has happened? Medicine has brought on the Mortician's dilemma, People are not only living to draw SS benefits, but they are living to draw benefits for a unheard of time previously. Many have been the Calls: extend the Minimum Age which one would need to start drawing benefits, restrict Payments to only Those who need it, and cut benefits so that the social insurance is insufficient anyway. Along comes lgl, with an indecent Proposal.
Build in automatic Means Testing, square in the basic component of the System?--How?
Alteration of the Mandate: simply stating all Participants will be Means tested throughout the history of their life. All Participants will be taxed at their current assessments, not even have the level of taxation upon their Income raised. The Change would come in the acquired equity of the Insured. Each Participant will be charged $3500 per $100,000 worth of equity he or she attains; said assessment by request of Insured would be drawn from SS Withholding, or can be paid in lump sum to the Social Security Administration. Failure to pay this SS assessment will delay receipt of Benefits until the assessed amount equals the lost monthly Benefits from delayed receipt of Benefits.
What have We gained?
No one pay on the first $100,000 of equity. Those with more than $100,000 in equity must pay $3500, until they have equity of $200k, where they will pay $7k. One million dollars in equity will cost the Insured $31,500 in added SS tax. The Tax continues to add up to $ infinity, until such time as the Wealthy Insured finds no benefit from the SS system; but they still have to pay the base tax. The SS Fund deficit suddenly disappears, and Everyone other than the Insured are happy. lgl
Tuesday, September 12, 2006
Wages and Productivity
Edward P. Lazear published his Prepared Remarks of his Address to the National Association of Business Economics on September 12th. He contends that the average monthly Job growth rate for 2006 will be 135,300. It would seem to be a fairly defensible rate. The declining Unemployment rate to 4.7% is definitely not, coming only through a drop in Labor Force participation. It presents even worse image, when the majority of his Address directs to the major problem of the future: this being the increase in Dependency rates due to the Ageing population over the next half-Century.
Lazear contends "Output per capita is approximately 30 percent higher here than in the developed European countries and Japan." This is debatable on several levels, as the Countries involved have less Labor Hours averaged per Worker, along with greater security Welfare from Government programs, amid debatable equivalences with the American Standard of Living; All within a forum of lower Consumer Pricing. There are alternate methodologies to the American Drive Productivity. Lazear also submits a theoretical cure for future Dependency rates in America as increasing the Capital/Worker rate.
Japan’s core increase in Corporate Goods Pricing of 3.4% year over year highlights the major problem with the Lazear cure for the future. The push was Energy driven, and pushing the Capital/Worker rate stands as the most energy-intensive methodology for increasing Productivity of Labor. We need a less-intensive energy consumption Economy, with lower Cost Capital Equipment, and lower Consumer Prices. We also need a higher Labor Participation rate with Labor working less, but more Years in duration. Even Conservative Economists will eventually have to adopt this strategy.
The U.S. Trade Deficit just hit a record $68 billion in July, based solely on the increase in Oil prices. The American economic growth factors stand as totally dependent on Energy consumption, and in 50 years, the American economy will face the absolute need to import Oil to sustain its basic economy. The Conservative Economic approach does not sustain long-term maintenance of the American economy. llgl
Lazear contends "Output per capita is approximately 30 percent higher here than in the developed European countries and Japan." This is debatable on several levels, as the Countries involved have less Labor Hours averaged per Worker, along with greater security Welfare from Government programs, amid debatable equivalences with the American Standard of Living; All within a forum of lower Consumer Pricing. There are alternate methodologies to the American Drive Productivity. Lazear also submits a theoretical cure for future Dependency rates in America as increasing the Capital/Worker rate.
Japan’s core increase in Corporate Goods Pricing of 3.4% year over year highlights the major problem with the Lazear cure for the future. The push was Energy driven, and pushing the Capital/Worker rate stands as the most energy-intensive methodology for increasing Productivity of Labor. We need a less-intensive energy consumption Economy, with lower Cost Capital Equipment, and lower Consumer Prices. We also need a higher Labor Participation rate with Labor working less, but more Years in duration. Even Conservative Economists will eventually have to adopt this strategy.
The U.S. Trade Deficit just hit a record $68 billion in July, based solely on the increase in Oil prices. The American economic growth factors stand as totally dependent on Energy consumption, and in 50 years, the American economy will face the absolute need to import Oil to sustain its basic economy. The Conservative Economic approach does not sustain long-term maintenance of the American economy. llgl
Monday, September 11, 2006
Wrong Time
Reuters had an article today stating that U.S. Trade Negotiators were still committed to completing the Doho Round of Trade talks successfully. The Trade Talks have never been my favorite, as my Readers know, and the Bush fast tracking mandate resonates even less well. Free Trade treaties tie the hands of both Government and Business, disallowing optimum Trade negotiations at the point of impact Contract level. One article by Edward Hugh announces Japan has just had the worst month for Capital Equipment orders in 20 years. Another Post by him states that French industrial output is falling. Bush wants to tie the hands of the real Trade Negotiators exactly when Trade advantages can be realized through tough Contract discussions.
We are heading into a tougher economic environment in this Country, and the rigors of matching Trade treaty commitments will only cut into the Profits of any Trade contract which is formulated. A real hazard resides in the Bush administration policy of making Agricultural concessions to get such a Treaty, when hard times will reinforce the need for the Agricultural subsidies which Bush would give away. It is also the one area where American production still has a real advantage, as the World has yet to learn how to feed itself. This Author wishes he was waving to the Bush fast tracking mandate in the Rearview mirror.
Here lies the Stupidty: We finally are beginning to see some curb on Consumer Spending, We are beginning to get a break on Energy with Oil down to $65/barrel, We have achieved Fed hesitation to raise the Overnight above 5.25%, and the Bush administation wants to hamstring Us with a snare of artificial restrictions that will never make sense. I can only hope that the Bush administration will work with the diligent speed of normal Government policy, and he will be out of Office before he can commit Us to any more drivel. lgl
We are heading into a tougher economic environment in this Country, and the rigors of matching Trade treaty commitments will only cut into the Profits of any Trade contract which is formulated. A real hazard resides in the Bush administration policy of making Agricultural concessions to get such a Treaty, when hard times will reinforce the need for the Agricultural subsidies which Bush would give away. It is also the one area where American production still has a real advantage, as the World has yet to learn how to feed itself. This Author wishes he was waving to the Bush fast tracking mandate in the Rearview mirror.
Here lies the Stupidty: We finally are beginning to see some curb on Consumer Spending, We are beginning to get a break on Energy with Oil down to $65/barrel, We have achieved Fed hesitation to raise the Overnight above 5.25%, and the Bush administation wants to hamstring Us with a snare of artificial restrictions that will never make sense. I can only hope that the Bush administration will work with the diligent speed of normal Government policy, and he will be out of Office before he can commit Us to any more drivel. lgl
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