Posts with the tag economy

Being Arrested For Being Laid Off

George McCasland — Sat, 02 Jan 2010 18:08:54 EST

In this economy, with over 80% of layoffs being men, why are the courts not notifying fathers paying child support that it is not required to hire an attorney to get a modification in their child support payment to what it should be based on unemployment? Instead, the men who cannot afford an attorney fall behind and face the possibility of jail. In addition, if he can afford an attorney, he is questioned on why they cannot than afford to make their full payments?

Questions need to be presented to all state and county family courts as to why it's not known to divorced and single fathers that they have a right to free legal representation, as regards child support, under Federal Public Law 12. With this, they can make an official request to the Office of Child Support Enforcement for a review and modification of their child support obligation based on a change of circumstance. That change of circumstance is a significant change in economic resources due to circumstance beyond their control, such as an involuntary layoff. Federal law says they must represent either parent upon request.

These fathers are taught the child support enforcement is there to just make their life difficult, but that is not their primary task. They represent the laws addressing child support as it applies to "both" parents. They are not the exclusive representatives of the obligee parent, usually the mother.

Gregory's an American Helping America in Economic Recovery

Gregory "Gregory" — Mon, 28 Dec 2009 22:05:12 EST

Our lives and amount of time living in America are most likely on opposite ends of the spectrum. You could have a biography that shares a lifetime of life’s achievements and awards for commitment, dedication, and service to all America's people, i.e. Hurricane Katrina evacuees.

Recently, I've relocated to Texas, first to Dallas then to Houston. In the short time in Texas I’ve had several opportunities to understand why everything is big in Texas - in addition to the obvious size of this state. I would like for us to agree on two things right away; 1st size does matter and people are just people, just like you and me.

That being said, America needs the help of all American’s to jump start our current economy. And just like the Dallas Cowboy’s is one of America’s most popular football team. This economic stimulus solution needs to start with the most innovative and biggest entrepreneurial thinkers in the world, Americans in America.

Q: Why? A: Why not! Let’s just say, if the three biggest hospital groups in the US have offered to reduce their costs by $155bn over 10 years in an attempt to make health reform more affordable. What can American Corporations, Government, and the People collectively bring to the table that jumps starts our momentum into a faster economic recovery?

When responding please place your first name as the American that will help America. Let's all remember: John F. Kennedy's quote, "Ask not what your country can do for you--ask what you can do for your country."

Local homelessness up 71 percent as providers observe homeless persons memorial day

Pat from Pittsburgh, PA — Sun, 20 Dec 2009 21:57:36 EST

As the US economy disintegrated this year, millions of Americans faced unemployment, mortgage foreclosures, needing social services, or homelessness for the first time in their lives. The Allegheny County Department of Human Services identified 1,308 homeless people, including 164 families with children, in January 2008. That number grew to 2,242 in January of this year. That’s an increase of more than 71 percent.

Today marks the 20th annual observance of Homeless Persons Memorial Day. Begun in 1990, it is sponsored by the National Coalition for the Homeless, National Health Care for the Homeless Council, and the National Consumer Advisory Board. They chose December 21 because it’s the first day of winter and the longest night of the year. They want to bring public attention to the tragedy of homelessness and to remember those who suffered and died because our nation has failed to end it. Service and advocacy groups in more than 120 US cities held events to honor the homeless in 2008.

CONTINUE . . . . http://www.examiner.com/x-14931-Pittsburgh-Public-Policy-Examiner~y2009m12d20-Local-homelessness-up-71-percent-as-providers-observe-Homeless-Persons-Memorial-Day

Health Care Reform Debates

Tom Rodgers — Fri, 11 Dec 2009 17:06:34 EST

What I have noticed by watching these debates is that most of the Republican Senators are doing nothing more than Rambling.

They go on and on about what it will cost by 2017 etc. When will they Wake Up and Realize that if they do not pass this bill this year America may not be around in 2017. They should know this bill is the biggest step to rebuilding our economy and most importantly it is Urgently needed now to Save the Lives of The American Citizens.

Making Money is a Scam (in a world of fiction)

Richard Thomas Gerber — Fri, 11 Dec 2009 02:04:22 EST

Making Money is a Scam (in a world of fiction)

“The truth is often obscured by a veil of complexity”
~Infinite Play

Making Money is a Scam (in a world of fiction)

In a world of fiction making money is a scam. Over the course of time there has been a transfer of power from the “value” creators and the genuine value they create to the “transaction” managers and the owners of the symbol used to represent value, and the symbol itself. The value creators are then charged for the use of the symbol. The symbol controllers create the symbol out of nothing at zero cost and sell it, it is genius idea from an ego perspective but it is not sustainable. In other words the symbol transaction managers are able to usurp genuine value from the system without contributing any considerable value other than entering accounting transactions into the system. So in this world of fiction importance is placed upon the symbol and not the value it represents and everyone is doing whatever they can to obtain monetary units quite often using deception, gimmick, providing illusionary value or selling at an artificially inflated price rather than genuine value creation.

The transaction and symbol managers yield an unnatural power because they control the supply of monetary units to be used by the producers and consumers at anytime they can reduce money supply creating scarcity and conflict between the producers and consumers. They wield the power to decide which endeavors are funded and who gets loans often favoring those that support their scheme. This gives them the false status of Gods and the bank is the temple of worship as they are the source of all sustenance because one needs the symbol or account number to buy food, and obtain shelter. They become the source of all sustenance.

Making money is not a scam (in a world of truth)

In a truth based world making money is not a scam. The difference is that in the world of truth the producer is the creator of money, not the banks, because they are the creator of genuine value and therefore wealth which in a world of truth is naturally reflected in their value exchange account balance. In the world of truth the consumer is the validator of the creation of value and therefore wealth. The consumer credits the account of the value creator in proportion to the amount of value created. In the world of truth the focus is on the creation of value and not the obtainment of monetary units which naturally flow to the value creators, the producers are the true makers of money.

In reality the banks do provide a small amount of value they: Track transactions, Evaluate Risk, Create Debt (new money), Ensure Debt is repaid (future value is created), and calculate interest (their profit), which represents the proportion of your wealth they get for allowing your participation in the economic system. Of course they only loan the amount of the principal into the economic system so in order to pay the interest back as a whole the “whole” of consumers must borrow more creating a perpetual cycle and eternal servitude with cycles of boom and bust, each bust resulting in the conversion of their intangible symbol created at zero cost into tangible assets like land as some of the consumers will always default by design and lose their collateral.

Truth calls into question the price charged by the bankers in this game of monopoly for the use of their symbol and the tracking of transactions. The mark up or margin on the minimal actual cost of entering transactions into a computer system is substantially far more than it would be in free and natural market. In the seven years leading up to 2008, FDIC-insured commercial banks made an average pretax operating profit of $142 billion, for basically entering transactions into a computer system and tracking them. These are very expensive key strokes. Combine this with the Wall Street Gamblers that create no genuine value but take billions of dollars of value out of the system, food from mouths of the starving children, and you can understand the cause of the major economic imbalance we currently have.

The actual cost to manage the value exchange transactions, for the US financial system would be less than 100 million dollars for approximately 12 data centers with server farms and administrative, technical, managing and auditing staff.

If we really have a free market then the consumer / producer should be able to switch to the more efficient lower cost monetary system.

Many do not realize that when the US went off the Gold Standard in 1971 to a fiat currency the worlds monetary and financial system became nothing more than an accounting system. With the high priests of money having the power to create the transactions they became the source of sustenance. The Federal Reserve controls and owns the master chart of accounts making them the high priests.

The economic constituency needs to create a new choice for themselves, a new value exchange accounting system that is fair, equitable, and sustainable supporting a natural market. Read http://coinage.me for comprehensive understanding of the flaws of the current system and the design for the new and be sure to read The Money Changers. It is time to throw them out of the temple once again, for good. If you care about the starving children in the world send this page to everyone on your mailing list so they begin to see through the illusions surrounding money.

~Richard Thomas Gerber

Power Questions

When does it make sense for the citizens (government) to create a debt instrument to create money and then have it given to the banks to be loaned back to them at interest (profit)? Why must citizens borrow money twice?

If a house still provides the same shelter as it did two years ago how could it have lost half it's value two years later? It still provides the same value in reality. Perhaps the way the value is determined is a fiction.

If $100,000 (unreal intangible) buys twice as much real estate (real tangible) as it did two years ago did not the value of money increase?

Why are bank profits tax deductable? The interest you pay on your mortgage is tax deductable which actually allows the banks to charge you more for interest then you would normally be able to pay. It also reduces public funds, resulting in a need for increased taxes, causing the citizens (government) to need to borrow even more money at interest to pay the public debt. Is this fair to people who rent?

Find out where the stimulus money is going

Pat from Pittsburgh, PA — Mon, 30 Nov 2009 18:41:31 EST

So how’s that stimulus working for you? I wish I had a dollar for every time I’ve heard that question this year. Okay, let’s answer it. Yes, the money is moving. And yes, I expected more results by now, too. But it will take a long time to fix an economy that was so deliberately and horribly neglected for eight years.

CONTINUE . . . . http://www.examiner.com/examiner/x-14931-Pittsburgh-Public-Policy-Examiner~y2009...

Spread the GOOD economic news

Steven — Wed, 25 Nov 2009 19:53:55 EST

I am puzzled why the administration is getting grief on the economy. They have performed a @##$% MIRACLE in preventing a complete meltdown after 8 YEARS of completely irresponsible economic policy. The idea that Geithner is gettign raked over the coals for being "ineffective" and indecisive is absurd. He and the other economic team basically dug the whole GLOBAL economy out of a deep trench. Even at 2.8% the fact that the US GDP is positive is amazing news, and definitive proof, by the way, of the practical truth of Keynsian theory.

The Stimulus Act has been a huge help. It could have been even more effective, had there been more support in the Senate for the policy (from Republicans), but they have been to a man (with a couple of women, and one who has subsequently become a Democrat) against it. It is pitiful for them to now claim that the stimulus is not working ENOUGH to prevent unemployment going up, when THEY were the ones who ensured it was not larger than it is.

But, despite GOP pernicious opposition economic policy has been remarkably effective, so effective that we are now, as an economy, growing again. But now the fear among the economists is that consumers are not spending enough money. But isn't the whole point about the balance of payments deficit and the credit crunch that consumers were spending too much in the first place? Don't we need a period in this country when there are not outlays aimed at consumption but rather at production? For exports, or for energy-saving? We need to get capital aimed at straightening out the US economy and its position in the global economy. The best way to do this is to invest in export industries and in infrastructure. So we should be happy that the consumer is not maxing out on credit cards again. The problem now is how to get the finace sector to pony up the capital to get the economy producing again--rather than paying itself huge bonuses. But isn't the fact that Wall Street is not doing its side of the bargain yet more evidence that the "free market" is not working, and is that not an indictment of right-wing anti-government theory, rather than something to blame the Obama admin. for, or Geithner?

So, spread the word that our guys have saved capitralism from itself--if they don't fulfil their side of the bargain by investing in their ownh system--then that is their fault (and that of their republican cronies)--not of the Obama administration.

Obamadepending financial recipe

FilipeAlvesFerreira — Sat, 14 Nov 2009 18:39:56 EST

Is the thing a financial kitchen ?

Yes and no.

Yes because the thing is challenging FED's for the creation of the Universocial_Sovereign_Anchor (U_S_A) for giving folks CLO (Cash_Link_Opportunities) to keep their personal bank-financial power.

No because Regulations and the USA Admnistration are not salt pepper and kitchens.

Do you think it is possible to create a substitute for the investment's practice ?

Would you use the thing for yielding wealth if just you need to link money-to-money at the U_S_A ?

Do you trust on your USA President and on United We Serve ?

Middle Tennessee Healthcare Reform Roll Call

Benjamin Vos, Nashville — Wed, 11 Nov 2009 11:25:53 EST

Are you committed to supporting the President's plan for healthcare reform?

President Obama has called for Congress to deliver on comprehensive healthcare reform that provides security and stability for the insured, help for the uninsured, and reins in the costs of healthcare for families, businesses, and government.

This requires a mutual commitment - all of us must pull together in order to accomplish this goal.

The status quo is unsustainable and morally unacceptable. We spend 16% of our gross domestic product on healthcare in this country - $2.4 trillion per year - and insurance premiums have more than doubled since 1998. Wages have remained flat while healthcare costs have increased, leaving families with less money in their paychecks. 45,000 Americans die each year because they don't have access to insurance, and a million more American families go bankrupt each year because of medical bills.

These issues don't discriminate. Rich and poor, labor and management, black, white, Latino, Asian, Native American, male, female, straight, gay - all of us are impacted by the drag of healthcare costs on our economy.

Will you join the President in supporting reform? Please tell your Senators and Representatives to pass reform this fall. We can't wait another day.

Post a comment to show your support, and share your ideas.

National Unemployment - A Reality Check

"Voice for Humanity" — Tue, 10 Nov 2009 19:19:57 EST

By Padmini Arhant

According to the latest reports, the current jobless rate is 10.2% with 16 million Americans competing for 3 million jobs. Apparently, this figure does not include the underemployed. The Corporate related unemployment is further expected to rise up to 10.8% by the end of next year. Another grim factor is the joblessness among the self-employed and the small business retrenchments reportedly escalate the figure to an alarming 17.5% resembling the severe depression era.

Growing unemployment is a major impediment as consumer spending is directly linked to the job market posing a downside for the entire economy. Despite, the economic growth at 3.5% along with the 9.5% annual productivity for the recent quarter, the American workforce is yet to benefit from the surge in these areas.

The most affected sectors appear to be construction, manufacturing and retail. Although, the recent stimulus signed by President Obama extends unemployment benefits for 14 weeks and 20 weeks to the worst hit states combined with the tax credits for the first time and other home buyers, the problems confronting the industries required to generate jobs is attention worthy.

Please refer to http://www.padminiarhant.com for the remaining content.

Thank you.

Padmini Arhant

Election Lesson: It's right -- not Right -- to be Democrats.

Douglas from South Gate, CA — Fri, 06 Nov 2009 13:46:15 EST

Given the mixed results in this off-off-year election -- Republicans win governorships in traditionally Democratic New Jersey as well as in traditionally Republican Virginia; Democrats win House seats in a traditionally Republican New York district as well as in a traditionally Democratic California district -- there is more spin being spun by pundits on the Left and the Right than by Kobe Bryant goin' to the hoop. So what's the real deal?

One Year Later

Kevin Agnese — Thu, 05 Nov 2009 00:25:51 EST

Wednesday marked one year since President Obama's historic election to the
White House.

The president reminded us that while Election Day 2008 was a
day of hope and possibility, it was also a "sobering one because we
knew even then that we faced an array of challenges that would test us
as a country."

As the president said, while we have a long way to go, we have "made
meaningful progress" towards rescuing the economy from the possibility
of imminent collapse, as the Recovery Act created or saved hundreds of
thousands of jobs.

While we're making progress the president has said that he will not
rest until every American who wants a job can find one.

So, as we celebrate the anniversary of the president's election to the
White House--let us pledge our commitment to a stabilized economy,
health insurance reform, clean energy, and the best possible education
for America's sons and daughters.

Economic Stability...

RAVE -N- — Wed, 04 Nov 2009 10:23:26 EST

With the new news, that the economy is turning to Mexico for trade goods, instead of China; my face begins to smile. I predicted this would happen long ago, just funny to see it happening, as well, I had a hunch that we would send them approximately, 500 million worth of computers, for any reason what so ever. Well, 200 million have already been sent, with 200 million more on the way. What a nice little touch. The drug dealers getting busted, saw that coming too. When your country is over run and the US, needs you, it is time to help stabalize your country. Well, those are the biggest things going on in Mexico, I saw them coming though. So what is next? What should be next? With the prices going down on products, due to this change, we will see foriegn goods in a different manor. No longer will they be produced from the other side of the planet, but from our friendly neighbor Mexico.

What I see...

RAVE -N-
The Search for the Meaning of Life...
Love...
Wesley Warren Smith

Inject $110 B into Housing Market and Create 5 Million Jobs with a Zero Cost Immigration Reform

Haili — Tue, 20 Oct 2009 14:16:02 EDT

Uncle Sam could inject $110 B into housing market without pay a penny from its own pocket. With the money supply theory, if the money supply multiplier is 5, the $110 B injected will in turn create $550 B GDP which represents 5.5 million jobs in one year.So where will the money come from? It will come from the 920,000 H1B visa holders. The only thing congress needs to do is to pass a immigration reform legislation that will grant green cards instantly to those H1 B visa holders who buy a home here! By the end of year 2008, there are about 920,000 H1-B visa holders hanging around in United States. They are skilled workers hired by American employers. As the current immigration law rules, they will have to leave this country when their work visa expires, although the fact is most them will sooner or later turn in green card application and become a permanent resident.H1-B visa holders are different from illegal immigrants in the way that they came here legally through a complicated screening process. They must own the advanced skills needed by American companies and they must be paid a prevailing wage. They also pay all taxes as every American worker. By this mean, they are a contributor to our social security system when they landed this nation. Unfortunately, due to the Green Card quota, it usually takes them several years to get their green card. This lengthy process was significantly pro-longed after 9-11. This lengthy process added a lot of uncertainty to those who come here with good intention of achieving American dream through hard working. In such frustration, most of them will not use any money to buy a home, even when most of them could afford it. I estimate that at least 550,000 of these H1 B visa holders will buy a home if they would be given a green card. Let’s do a simple calculation here. If the average value of the home they are buying is $200K, the buying power released from this 550,000 people will be $200K x 550,000= $110 billion dollars!When this $110 B spending goes into our economy, it will become $550 B GDP. According to Bureau of Labor Statistics data and BEA data, the average GDP American worker achieved in 2008 is about 92,000 dollars. So the $550 B GDP increase will bring in 5.5M new jobs to this nation!Is there anything to lose? Some body may claim that they will compete with American workers. However, these critics neglected the fact that H1B visa holders already got a job and 90% of them will sooner or later get a green card through some ways. Therefore, there is no competition at all. More than that, by staying here, these people and their family will spend as every American citizen does. The spending will create more jobs than the jobs they took. Also, they are not depleting our social security savings but to make contributions in it, since they all pay social security tax, medi-care, income tax, sales tax and any other tax that any American citizen is paying. On the contrary, if they were forced to leave this country, they will bring all their savings to their home country which will create nothing to US economy but more debt. So it is time for us to take actions! Let’s put together a bill and have the congress pass it. You may have already noticed how successful the Cash for Clunker program worked. The commonality between these two programs is they all works from the consumer side. Releasing the purchasing power is the key to defrost this economy.I would highly appreciate your help if you can bring this idea to the attention of any congress man and woman. To move this nation forward, we need to think out of the box!

a young americans letter to barrack obama

Kristian from Longmont, CO — Sun, 18 Oct 2009 11:30:38 EDT

may be in run on mode.. but w/e

From: Kristian Hemker

Longmont, Co.

To: Barack Obama

From: A concerned youth in America

Dear Mr. Obama,

I have recently heard of your Nobel peace prize and I have one thing to say. The humble thing to do regarding the prize would be to turn it down and not be the publicity whore you have been all through your campaign. What we need from you isn’t uselessly accepting baseless award and accolades, but rather a Man, people will be able to look back on and say “he said he was going to change America, and he did.” As a 21 year old American I have seen all of the games and ploys of the political politicians and the rise and dashing of many hopes. I’m for the war in Iraq and I wish the people knew what good we were actually bringing those people. I have asked many “Democrats” “what is a democrat?” to which no one could answer. I have also asked people if they think Iraq is in better or worse shape since we have been there… and I have e yet to find a satisfactory answer from your party. I currently think we live in a one party system where private interests run the show behind the scenes and the political “debates” (if you can even call them that) are just a giant farce. I am a Libertarian and I know that capitalism isn’t all good and socialism isn’t all bad. Capitalism is the only form of economy that provides actual opportunity to gain wealth on your own merit, and individualism like that isn’t possible in a society that gives everyone everything they need. Americans are far too comfortable and stupid to understand the complex systems which control our economy. and schooling is almost impossible to afford in such hard economic times when you barely make middle class wages. The invisible inflation of costs in the housing markets is over rampant. I live in Colorado where those who have no skills lose jobs and those without jobs can’t afford the education for themselves let alone their families. I would like to also note the famous phrase “a government that can give you everything you need can take it all away.” So I think we need a drastic overhaul of Education and Welfare services. As far as the immigration issue is concerned I don’t think we need a second language but if they are willing to enter the “cultural melting pot” then I think amnesty isn’t a horrible idea. I think that Americans are far too comfortable and the low class can make more off of welfare then they can working at a local business. I would urge you to take these things into consideration because its my future and your children’s future not the ruling elite. I didn’t vote for you because I wanted to vote for Ron Paul but he didn’t get the nomination so I voted for Bob Barr, Because I believe that having too much control in both the house and senate doesn’t lead to rational discussion, but rather a comfortable arena to cater to private interests.. And I would also say that the billions of dollars of tax revenue you printed are going to destroy the middle class. I think we need a national minimum wage with a maximum housing limit. I don’t think that the government can solve all my problems so i am going to apply for government aid to start college in January for a “structural engineering and technology of applied science”, and try to get as many certifications as possible. What the country needs is not hand outs or government aid but Oportunity. And I think what they need you of you now is not the politician but the Man, Father, Husband, and intellectually honest person, I know you can be. This whole letter might fall on deaf ears but at least I had my say. I really hope you actually read this all the way through and took it into consideration despite my age. I am off to get my brother from a correctional facility because some of your “peace officers” arrested him while he was helping my grandmother out the front door with some dirty water because our sink is clogged and we cant afford to fix it. I would hope you take each of my statements as if your daughters were asking you. Why the police arrest more blacks and convict them than of any other color? And I hope you don’t disgrace the memory of Dr. Martin King who said “do not judge a man by the color of his skin but the content of his character.” One last thing I have to ask. Why it is in a country that obviously has a drug problem are we arresting these criminals the government, Has made for itself and using my tax dollars, (Which I haven’t earned much of) to house these criminals for upwards of 20,000 dollars a year, Per person. Not that we should let people out of prison because of the high recidivism rate. One final thing that I have learned from my Hispanic forbearers is “I would rather die on my feet than live on my knees”

Sincerely,

Kristian Hemker (concerned 21 years old)

Rally for president Obama, tomorrow, Courthouse, Valdosta, Lowndes County, Georgia

jsq — Fri, 16 Oct 2009 17:45:22 EDT

This happened at Jack Kingston's Health Care Town Hall, Valdosta, GA, 28 Sep 2009: a veteran was booed for saying respect the president. To Kingston's credit, he shushed the crowd.The speaker was George Rhynes, who is one of the organizers of a rally tomorrow, Saturday 17 October 2009, on the Lowndes County courthouse steps, Valdosta, Georgia. Invitations on

Democrats.org and Facebook.com. But you don't need an invitation: just show up!

Interest Rate Rise NOW!

My Vote Matters — Thu, 15 Oct 2009 00:47:28 EDT

I have been doing some thinking lately and analyzing the Fed's rate action since 2000 and have decided the biggest problem created by the Fed was not bring rates to historic lows after the 9/11 terrorist attacks. The problem began when the jacked up rates in early 2000. Then after realizing they “goofed” dramatically reversed course in 2001 only to overshoot to the down side where they left rates to low for to long. When realizing this, the Fed followed with a draconian attempt to return the rates back to "normal" beginning in 2004, which wrecked havoc with the credit markets and economy.

Federal Republic of Germany - Bundestag Election

"Voice for Humanity" — Mon, 28 Sep 2009 09:21:46 EDT

By Padmini Arhant

Congratulations! to the Chancellor of Germany Angela Merkel and the FDP leader Guido Westerwelle on the re-election of CDU-CSU (Christian Democratic Union and Christian Social Union) in grand coalition with the Free Democratic Party in the 17th German Federal election on September 27, 2009.

As a major economic power and the largest exporter as well as the second largest importer of goods, Germany is significant to the global economy and the international progress. The export-oriented nation has been drastically affected from the global economic crisis. It experiences the common woes like the financial market failure leading to the government bailouts; massive job loss in the manufacturing sector especially the automobiles and heavy industrial equipments…having a ripple effect on other sectors in the economy.

However, Germany has contained the crisis from further deterioration due to the various government run programs viz.

Please refer to http://www.padminiarhant.com for the remaining content.

Thank you.

Padmini Arhant

Employment woes

Bertie — Sun, 27 Sep 2009 08:38:34 EDT

Every day I am told by various people, mainly customers at my Walmart store in Secaucus that I should thank God that I have a job. That may be true and thankfully, I am employed. But, to what end? What good is any job if your family has to apply to the government for help, which is just what we did this past Friday. We sat in the Welfare office for 5 1/2 hours waiting to see a person who took our information and told us to come back this coming Friday to apply. 5 1/2 hours and we didn't even get to apply.

Walmart stores made more than 400 billion dollars last year. It is true they have more that 2 million workers world wide, but I don't think they would miss an increment for us that would at least put food on our tables and maybe give enough to pay the rent? That is the plight of the Walmart worker. By the time I take out my food money, pay my car insurance, and set aside money for gas for the car, there is MAYBE 15 dollars left in my pocket.

Now, I have worked since I was 16 years old and legally able to do so. I helped support my family, my mom, dad and two younger brothers, quitting high school to do so. Then, when my first son was born, I had him to support, and, after I met my husband (of 33 years) I had to help support my two children and when my husband became disabled I had him to help take care of. His disability check is unrealistic and so low that there is no way he could support himself.

My point to all of this is that if Walmart, with all their riches (fat cat family made 90 billion in 2008) would give up some of OUR HARD EARNED CASH, perhaps we would not have to rely on emergency room visits when we are sick, or on Welfare to feed us and keep us in our homes. Walmart is helping to drain the US economy by their lack of compassion for those who break their backs for the Walmart company.

Something MUST be done! We are draining the United States and the taxpayers because Walmart refuses to share the wealth.

I don't want people to stop shopping there, heavens no! That would be a disaster for all of my hungry co-workers. I just want Walmart to do the right thing and give us our fair share for all the work we do.

Go www.walmartworkersforchange.com or www.americanworker.org and make a statement, take a side. Ultimately you will be affected by corporate Americans lack of caring for those of us who make things tick in this great human clock.

Why We Shouldn't Fear the Public Option

Skye Wallin — Sat, 12 Sep 2009 18:56:22 EDT

People often forget, either due to distractions, blinding cynicism or a lack of education, how unique this country really is. The United States of America is a nation forged and grounded in a rich tradition of protest and persistent refusal to accept the status quo. In many ways this tradition has been in hibernation--recent decades will never be known as the years of particularly impressive citizen participation in government and policy. Indeed, the American people have become increasingly apathetic and stupid, but I believe that the spirit has remained alive--in fact, I predict that the drive to change our most negative aspects of society is building momentum; isn't it obvious?

Take the town halls on health care, for instance. Though CNN, FOX and MSNBC only cover the crazies, there is some remarkable dialogue going on--and not just by the supporters of health care. When it comes to the Public Option, there is a genuine philosophical debate to be had. Remember that the whole point of the American Revolution was to establish independence from an abusive and invasive government that taxed excessively and unfairly. We have come a long way since then, and have perhaps gone full-circle in many ways. I share many Libertarian concerns of the expansion of the U.S. government, excessive spending and the limitations placed upon civil liberties; not to mention our often tyrannical foreign policies. Indeed, the United States became the very empire its citizens died to defeat. People think I'm a big gov liberal, but the fact of the matter is that the federal government IS WAY TOO BIG! The War on Drugs is a fiscal and societal disaster, the Iraq and Afghanistan wars are squandering our treasure. The IRS ought to be torn down and replaced with a simpler tax code, and the Patriot Act ought to make every single American extremely wary of what leaders know about our personal lives. Not to mention the militarization of government that has seeped into the media and saturated our culture.

So when people say to me: "I just don't believe the federal government should expand! It's already too massive" I agree! The problem is that in this modern world, there are modern problems that require state intervention. Spying on Americans is not one of these exceptions. Drug abuse isn't either. Nor is Saddam Hussein or Ho Chi Minh! But to the people who believe the Public Option is some kind of government takeover and the onset of communism: should we not fight to end the excessive federal policies that actually hurtpeople? The War on Drugs fuels a culture of crime in the inner-cities. At least a million Iraqi citizens are dead because of the current conflict--not to mention the 4,339 dead American soldiers. But now you oppose a public health plan? A plan that will help your fellow citizens get the care they need? A report by the Institute of Medicine suggests that as many as 22,000 American citizens die annually due to the lack of an insurance policy--one that either could not be afforded or was cut by employers!

And let us not forget that the Public Option is an OPTION! While the true Left wing of this USA would really like a single-payer system, it is simply not going to happen with this legislation. Big Insurance is the most powerful lobby in Washington, and certainly has great influence on the bill--in other words, the argument that people will be forced to take the government plan is bullshit. The truth of the matter is that most people will keep their private plans; plans, by the way, made more consumer-friendly due to other reforms that will be in the final legislation (including the preexisting condition issue and the ability to choose your own doctors).

Though this is an expansion of government services, I want to tell you how the Public Plan is actually more economical and sustainable than the current system. You see, being private enterprise, Big Insurance seeks to charge as much as possible while providing as little as possible. I have no problem with capitalism (I am a Capitalist), but this is the reality of the basic operations of a firm. While this is perfectly acceptable in most sectors, health care is an entirely different beast. Since 2000, insurance premiums have nearly doubled! In 2007, the U.S. spent about $2.2 trillion on health care,* which comes out to approximately 16.2% of GDP--nearly twice the amount of the rest of the developed world! ** If you aren't worried yet, then you have read these numbers: by 2025, costs are expected to rise 25%; by 2082, 49% ! *** Oh, and did you realize that every GM vehicle is $1,525 more expensive because of employer-based health care coverage? Insurance is by far GM's biggest expenditure--even more than steel! ****

And the numbers go on and on. This is the financial argument, and it is all tied to the Big Insurance practice of driving up costs for higher profit margins, and making up for their clunky and inefficient administrative costs. Medicare costs are skyrocketing because they are subsidizing these inflating premiums, and this must be replaced. The Public Option must establish a much simpler and transparent system that injects competition into this stale and unsustainable market. It is fiscally sensical and it is moral.

But just any Public Option will not do. Next week I will tackle the question of "what must a Public Option look like in order to drive competition and cut costs?"

Absorb it, discuss it, and hopefully support it. Leave your comments below.

*Office of the Actuary, Centers for Medicare and Medicaid Services, National Health Expenditure Data for 2007. U.S. Department of Health and Human Services, available at: http://www.cms. hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage

**Organisation for Economic Cooperation and Development. OECD Health Data 2008.

***P.R. Orszag, Growth in Health Care Costs: Statement Before the Committee on the Budget, United States Senate, (Washington, DC: Congressional Budget Office, Jan 31 2008), available at http://www.cbo.gov/doc.cfm?index=8948

****R. Wagoner, Testimony before the House Financial Services Committee, December 5, 2008.
http://thinkprogress.org/2008/12/05/gm-health-care-reform/
my blog: http://www.theskyewire.com

Denison University 2011

*Office of the Actuary, Centers for Medicare and Medicaid Services, National Health Expenditure Data for 2007. U.S. Department of Health and Human Services, available at: http://www.cms. hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage **Organisation for Economic Cooperation and Development. OECD Health Data 2008. ***P.R. Orszag, Growth in Health Care Costs: Statement Before the Committee on the Budget, United States Senate, (Washington, DC: Congressional Budget Office, Jan 31 2008), available at http://www.cbo.gov/doc.cfm?index=8948 ****R. Wagoner, Testimony before the House Financial Services Committee, December 5, 2008. http://thinkprogress.org/2008/12/05/gm-health-care-reform/

Adam Smith writes in The Wealth of Nations

ALiveOneHere — Tue, 25 Aug 2009 00:19:42 EDT

"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.
...
"He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
...
"In civilized society he [man] stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love, and never talk to them of our own necessities but of their advantages."

"All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man or order of men. The sovereign [politician] is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient: the duty of superintending the industry of private people." (The Wealth of Nations, vol. II, bk. IV, ch. 9.)

"It is the highest impertinence and presumption, therefore, in kings and ministers [read politicians] to pretend to watch over the economy of private people, and to restrain their expense. They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs." (vol. I, bk. II, ch. 3.)

ADD -Attitude Decides Destiny

Unknown user — Fri, 14 Aug 2009 01:27:32 EDT

It is The Attitude that will change us Attitude is not a simple word Attitude is reltionship management ,is everything How we look at, is attitude How we act, is attitude How we react ,is attitude How we support causes,is attitude And Finally What Lessons we should learn from the mistake (not to repeat)is attitude

Cerberus: Hound of Hell!

Greg M — Wed, 12 Aug 2009 13:53:57 EDT

A interesting thought: After reading about the President's actions concerning GM and Chrysler earlier, I was a bit disturbed to learn that both Chrysler and the former financial arm of GM, GMAC, are majority owned by "Cerberus Capital Management," whose chief spokesman is former US Vice President Dan Quayle, and whose Chairman is John Snow, former US Secretary of the Treasury under G. W. Bush.

The "Gabriel" fund, a fund of Cerberus partner, J. Ezra Merkin, was the major player in acquiring both Chrysler and GMAC, and was also a feeder fund for Bernard L. Madoff Investment Securities LLC.

If you're up at all on Greek/Roman mythology, Cerberus is the multi-headed (usually 3) dog which guards the gates of Hell, to prevent those who have crossed the river Styx from ever escaping. Cerberus was the faithful companion/guard of the god of the underworld, Hades, and son of Echidna (half woman/half viper),"The Mother of all Monsters," and Typhon (half man/half serpent), "the largest and most grotesque of all creatures that have ever lived."

Cerberus Capital Management founder, Steve Feinberg, has stated to his employees, during the company's earlier days, that while the Cerberus name seemed like a good idea at the time, he later regretted naming the company after the mythological dog.

I, however, would have to say that perhaps there is indeed much power in a name! Just something for all my friends to chew on a bit today! Blessings... Greg

HOW DO WE PAY FOR THE GENERAL ELECTION MANDATE OF THE AMERICAN PEOPLE?

MoorAmerican — Mon, 10 Aug 2009 02:47:27 EDT

"This victory alone is not the change we seek —
it is only the chance for us to make that change."

— President Barack Obama, Election Night, 2008

HOW DO WE PAY FOR THE GENERAL ELECTION MANDATE OF THE AMERICAN PEOPLE?

Somebody asked the chief engineering officer of BEE, “POPLUV THE PAYGO” …”Is this just another APE idea?”

American Politrix Enterprise is alive and well. There is a civil unrest among the American people about the whole idea of change, as they see or perceive and believe, things are actually going the way of “spreading the wealth around” by the Obama Administration.

“JOBS! JOBS! JOBS!”... “NO WORKER LEFT BEHIND!”… “NO TAXPAYER LEFT BEHIND!”… “NO HOUSEHOLD LEFT BEHIND!”… “NO AMERICAN LEFT BEHIND!”… 304 MILLION AMERICAN PEOPLE STRIVING FOR A MORE PERFECT UNION…

“POPLUV THE PAYGO”

This is what needs to be said in response to the outrage over CHANGE – Change You Can Believe In! ... says the spokesperson from NESS – the National Economic Security Service. NESS is a non-partisan independent free enterprise estate trust of the American people, the free sovereign beneficiaries of a capitalist free market enterprise system.

What’s in a 5 syllable slogan that triggers instant economic stimulus or security income payments and derivative income payments from the Global Derivatives Market?

The Global Derivatives Market is a dollar-based financial trading market for central bank financial contract obligations. Derivatives are contracts derived from economic activity and leading economic indicators.

“POPLUV THE PAYGO” …is first a reminder of what time it is with the general circulation money supply… Create consumer demand for Federal Reserve Bank Notes to generate economic stimulus payments to American taxpayers and households, at least through the duration of the U.S. economic recession.

Once the economy shows signs of real GDP growth and job creation, consumer demand can be adjusted to generate economic security payments.

After all the outrage over how change is unfolding in America, the natural order of the universal law called CHANGE rules and takes advantage of “a teachable moment” of how to get things done in Washington, D.C.

The Democratic party as the super majority must enable the American taxpayers with the opportunity to profit from contributing there net earned income up to 100% in exchange for an economic stimulus payment equal to twice the amount of the net earned income contribution towards the national budget of the U.S. up to a maximum contribution of $5 trillion dollars in Federal Reserve Bank Notes.

This civil liberty already exists says the spokesperson from the National Economic Security Service (NESS). Two (2) free enterprise economic development models have been designed by BlackSunWheels Economic Engineering.

Both institutional economic enterprise models, the American Currency Board and the United States Currency Board are accessible by the American taxpayers and households to provide for the general welfare of the United States.

American business enterprises based in the United States can sponsor the United States Currency Board. The American Currency Board is exclusively for individual American taxpayers and households.

There are 50 billion financial unit shares of economic resources (fuser) immediately available to 138 million American taxpayers. 114.8 million American households in the U.S. are eligible for both – Economic Stimulus Payments and Derivative Income Payments from the Global Derivatives Market, a dollar-based financial trading market utilized by the Federal Reserve Bank to monetize credit lending transactions.

The Federal Reserve Bank Note is designed for the general circulation money supply – paper money for the demand deposits of M1. Liquid cash money instruments. ‘POP’ Public Obligation Paper; financial credit lending debt exchange units.

United States Dollar Funds includes coin and paper instruments. The currency board utilizes public laws enacted by Congress to effect risk-free, tax exempt, financial equity trading fund with fixed exchange rates that transforms the American taxpayers and households into a self-financing social order of economic production.

The U.S. economy will be changed into a self-financing "pay-as-you-go" consumption economy says, the spokesperson for BEE.

Every unit transaction in equity trading fund creates financial unit shares of economic resources – fuser, which is also called ‘LUV’ … Lawful Unit Value of U.S. Dollar Currency equal to United States Treasury Notes, readily available from TreasuryDirect.gov.

United States Treasury Notes are equal to the dollar face amount of minted silver and gold bullion coin; one ounce weight and content guaranteed and backed by the United States of America.

American Eagle Bullion Coin; one ounce silver and gold pieces – 1 Dollar face amount for Silver coin piece - .999 fine pure silver; 50 Dollar face amount for Gold coin piece - .999 fine pure gold.

The American Eagle Bullion Coin program is public law enacted by the United States Congress to pay revenues and profits through the U.S. Treasury Department towards the national budget and government debt obligations.

The American Eagle Bullion Coin program makes the currency board a government fiscal tool that shapes free market demand for Federal Reserve Bank Notes used in the production of United States Dollar Currency equal to United States Treasury Notes and based on the value of silver and gold bullion coin, says the spokesperson for BEE.

As for “T-H-E-PAYGO”? Simply risk-free and tax exempt income opportunity for the working class. The principles that effects a national unity founded upon TRUST – HOPE – ECONOMY; transparent “pay-as-you-go” balanced budget fiscal policy.

“POPLUV THE PAYGO” is how we pay for the General Election Mandate of American voters that want CHANGE. Financial stability and economic prosperity. This is the change the American people deserve.

So, my fellow Americans, after all the fussing, cussing, shouting, pouting, ranting and raving, ask the question - Who Wants To Be A Trillionaire? Smoke it over in your mind - contact esp_ness@hotmail.com to get more information about how we gonna really grind with the American Currency Board and the United States Currency Board.

social networking enterprises... engage.

Disrupters or Dupes?

Senior Moments — Sat, 08 Aug 2009 17:01:55 EDT

So...Here I am, a non-activist where politics are concerned, but now I believe the conservative elements in this country have just gone too far! Their orchestrated disruptions of open political debate are a threat to the free speech rights of all the rest of us, and at the very least, we must deplore those tactics.

What is worse is the obvious sub-text of their actions: they are actually promoting the undermining of the effectiveness of the Obama administration. Why would they do this? Do they not realize that would mean a severe diminishing of the US world-wide, that our international security and world-wide economic efforts would also be undermined? But, then on reflection, they aren't being entirely rational.

It is sad to see how people who might otherwise be decent have had their fears mobilized and how they are manipulated by the powerful business interests that simply do not want health care reform at any price--because reform would affect the huge profits they realize from the current so-called "free market" system. Let's face it--there is nothing open about the current health care insurance marketing system; it works to fix prices and bar very ill patients who would be costly for them!

I believe in free markets in general and the American entreprenurial profit system, but not at the cost of the lives of the elderly and uninsured.

Losing my marriage to the recession. I need your help.

Craig32935 — Fri, 07 Aug 2009 09:17:12 EDT

I appologize if this appears as a duplicate post under my blog as I am new to blogging and was not sure how it works. Post begins below

Back track to early 2007. I had met the most wonderful woman of my life. We shared equal values and dreams. I was 46 at the time and she was 44. We began our plan to merge our lives. I here in Melbourne FL and she 2700 miles away in LA County CA. We married in April of 2007 and in less than a month the economy began it's decent and began to take our hopes and dreams with it.

At the time I was earning enough to support myself plus plan for our retirement. Although we lived in separate parts of the Country when we married we thought things would go smoothly. The plan was either for me to sell my home and move to her or her to move here. I did not lose my job but, lost overtime pay, half my retirement fund and ongoing investment income. Then as bad luck would have it my 17 year old cars engine seized up and I was forced to lease a new car.

Ironically we could hardly live in two worse States. I in Florida and she in California. Both have horrible housing and employment markets now. I cannot sell my home even though I am not upside down as of yet. No employer in CA will even call me. Probably because I am still in Florida. My wife could not find work here in Florida either. We are still living apart and for two years she has helped support me. We tried to visit each other when we could. Mostly she came to see me as I could neither afford to go to her or would risk my job by taking so much time off. However she does not get paid time off so the costs are heavy on her. I have been a financial burden and source of stress to her and I know this is hardening her heart. Other issues have happened on her end that have made things worse for her. She is now working 7 days and almost 14 hours each day. She is making herself sick and I can do nothing to help her. Just the other day she got sick with the flu. Because we are on opposite coasts all I could do was tell her what medicine to take and to say I hope she gets better soon. I can't begin to describe how awful I felt because that is the best I can do right now. Life is not fair sometimes. I have nothing to offer beyond my health insurance. I in turn feel like a horrible failure as a husband and a man because I can not provide for her as a man should. I love her more than life itself and as such hate myself for being the burden I have been. I believe that when the economy improves I can change this but, when will that be and how long will it take? She has told me very recently she wants to divorce and this is tearing out my heart but, what can I say? I have told her to stop doing things for me and just worry about taking care of herself. I want her to keep the marriage for now so at least she has health benefits which she does not otherwise have and can remain my beneficiary. At least in this way if something were to happen to me she could finally be secure financially. How ironic that in life I am a burden but, after I would be the opposite!

I have tried everything I can think of short of just abandoning my house and moving out there to be by her side. I have even tried finding a second job here or even a part time one so I would not be a burden but, my present work schedule makes me an unattractive candidate for either. I tried to apply for a mortgage modification but, I missed the minimum qualification of my total mortgage expense having to meet or exceed 31% of gross income! It did not matter that it exceeded 51% of my net income or that all other living expenses combined exceed 110% of my total net income. Another irony here is that when my old car died had I taken a home equity loan to by a new one instead of leasing one I would have qualified for a mortgage modification!

In a previous career I was a fully certified ASE Master Automobile Technician with 100% dealership experience. I thought maybe I could go back to that as the pay could be better and overtime chances greater. So I decided to retest to see if I still held the knowledge necessary to pass at least some of the qualifying areas. Imagine my personal surprise and satisfaction when upon receiving my results I discovered I had passed every single test and was once again a fully certified master technician. I thought things might finally be going my way. That maybe the tide would turn. I updated my resume to reflect this achievement and posted it on many job boards as well as directly responding to job postings. So what happens? GM and Chrysler decide to close thousands of dealerships! That puts thousands of automotive technicians out of work and sends me to the very bottom of any candidate pile as current on the job experience is going to trump older regardless of certification level.

I am now at a complete loss as to what to do or try next. Maybe that's why I am posting this blog. Not just to share my personal recession experience but, also to see if perhaps there is something I missed, some other ideas I could try to change my circumstances and in turn possibly save my marriage which is what is most important to me. Maybe I am a die hard romantic at heart and I know many people would call me a fool but, I believe that with out someone special to love and share your life with then how can life have meaning? Even if I were by some miracle to become a wealthy man it would be meaningless to me if it meant I lost my marriage. I guess what I am saying in a way is that I would do anything. I would truly move Heaven and Earth if I could just to be with her as the husband and provider I was supposed to be. So I am open to ideas and suggestions. I will not let pride get in the way of asking for help so I am asking. You may ask what is it I want or think I need? I need to be with my wife or at least not be a burden any longer. In a perfect world that means I would be able to sell this house and also find a good job in the LA County area. I don't suppose there are any employers reading this blog that are willing to take a chance on me are there? I am probably as motivated as they come. Now back to my marriage and us.

We do not fight and otherwise have similar values. I have told her that no matter what happens I will always love her and that I will find a way to make everything up to her even if she does divorce me. I cannot live with myself knowing the burden I have been. I will find a way to repay all she has done but, she tells me no! I tell her I must. That I cannot go through life without her unless I know I can some day make it up. Sometimes the world is very cruel. I ask every day why someone so wonderful was brought into my life only to have her taken from me. I really do feel a failure as both a husband and a man. She deserves a far better life than she has had with me. I was supposed to give her that life and I still want to if I can.

Please feel free to share this blog. Perhaps the more people that see it the greater the chances that I will find the help I need. Thanks to all for taking the time to read my story.

Revolt against Health Care Reform Politics

"Voice for Humanity" — Thu, 06 Aug 2009 14:23:16 EDT

By Padmini Arhant

Here we go again! To quote the former Republican President Ronald Reagan revered by the political faction on the right, the obstructionists rise against health care reform under the guise of ‘fiscal governance’ with the stagecraft artists as citizens screaming and ranting over the health care policy for all.

Should anyone be surprised about the sources responsible for the spectacle at the town hall meetings?

When the propagandists can’t think for themselves, they often lavishly steal ideas from others and misuse the Gandhian principle of non-violence and peaceful protest discussed earlier for their own diabolical means, despite the action being detrimental to national progress.

Surely, Gandhi will be turning in his grave on the abuse of his noble wisdom…at the narcissistic profiteers in the health care industry using the selective media muscle power drive insanity to no point of return.

Out of sight, out of mind and the opposition goes ballistic to stampede the health care legislation.

The noise and raucous in the public arena instigated by the agents of warfare against welfare of the people in a democracy are leaving no stones unturned for their vile personal agenda i.e. dominate and deploy the destructive forces in health care matter directly related to economic and employment recovery.

Don't miss the remaining content @http://www.padminiarhant.com

Thank you.

Padmini Arhant

P.S. Time to replace the conservative propaganda machine with collective progressive action.

Why Health Care Reform - “It’s the Economy Stupid” and Capitalism

Unknown user — Tue, 04 Aug 2009 12:23:30 EDT

• Health Care Reform is about fixing the U.S. economy and the deficits that will increase due to increasing health care costs and the related negative impact on the U.S. economy.

"The first and most important thing in getting the federal deficit under control is substantial reform of the health care system," - National Economic Council Director Lawrence Summers

Yes, the public option is a Trojan Horse, but it will do the trick!

Maria B. — Thu, 23 Jul 2009 12:42:28 EDT

I sometimes wish that public radio would not give air-time to the conservatives whose comments border on stupid. Today a Texas doctor emotionally argued that people should have health savings accounts. I suppose he should be allowed to make a fool of himself, but what a waste of time -- we need to moving the debate forward.

Most thinking Americans know that a single-payer system is the only good answer. However, I think it's pretty clear that our country cannot handle that right now, for many reasons, not the least of which is the large segment of the economy that would be decimated by the elimination of the medical insurance companies. Yes, a public option is a Trojan Horse. President Obama has almost said as much when he challenges the insurers to compete with a government system.

But we must try a system where the insurers continue to play, and remember that it is only a first step. It won't be long before people vote with their pocket-books, and cut the insurance system down to size. My prediction is that they will eventually be regulated like a public utility. (They are already the contracted administrators of Medicare.)

We need to acknowledge that our current "health care system" does not deliver health care to Americans, it delivers profits to corporate investors. Insurers have stolen our nurses to sit at computers to evaluate hospital length-of-stays. They have frustrated our physicians in numerous ways: removing their decision-making ability; limiting the time they can spend with patients; reducing their income by administrative costs.

I have long said that "if every person who wears a suit took care of one person we would not have a problem." The only people working in our health care system should be care-givers.

In a successful society health care is a right, not a privilege. Americans are smart people; we already understand that profit-making on people's illness is morally wrong.

Let's put profit-making where it belongs -- making "things" that improve lives. If health care is provided to all people we will have a work-force that's truly capable of meeting the real challenges we face, and an economy of substance, not smoke and mirrors.

Sincerely,
Maria Buatti, MPH.

The American Graduation Initiative

Jill 4 Obama — Wed, 15 Jul 2009 07:58:23 EDT

TUESDAY, JULY 14TH, 2009 AT 5:52 PM

Investing in Education: The American Graduation Initiative Posted by Katherine Brandon

As part of his effort to build a stronger foundation that will allow us to lead in the global economy, the President announced today a historic initiative to strengthen our nation’s community colleges, and called for five million additional graduates by 2020. Speaking at Macomb Community College in Michigan, the President stressed the importance of education to America’s prosperity: But we also have to ensure that we're educating and preparing our people for the new jobs of the 21st century. We've got to prepare our people with the skills they need to compete in this global economy. (Applause.) Time and again, when we placed our bet for the future on education, we have prospered as a result -- by tapping the incredible innovative and generative potential of a skilled American workforce. That's what happened when President Lincoln signed into law legislation creating the land grant colleges, which not only transformed higher education, but also our entire economy. That's what took place when President Roosevelt signed the GI Bill which helped educate a generation, and ushered in an era of unprecedented prosperity. That was the foundation for the American middle class.
(President Barack Obama greets the crowd at Macomb Community College in Warren, Mich.,
Tuesday, July 14, 2009. Official White House Photo by Lawrence Jackson) Yesterday, we told you about the Council of Economic Advisers’ report about the future of the U.S. labor market. The report described a shift towards jobs that require greater analytical and interactive skills, and the benefits of higher education. It is expected that jobs requiring at least an associate degree will grow twice as fast as jobs requiring only a high school education. The President understands that education is fundamental to reviving our economy and strengthening our workforce, which is why he is committed to increasing graduation rates, and has asked every American to commit to at least one year of higher education: But today I'm announcing the most significant down payment yet on reaching the goal of having the highest college graduation rate of any nation in the world. We're going to achieve this in the next 10 years. (Applause.) And it's called the American Graduation Initiative. It will reform and strengthen community colleges like this one from coast to coast so they get the resources that students and schools need -- and the results workers and businesses demand. Through this plan, we seek to help an additional 5 million Americans earn degrees and certificates in the next decade -- 5 million. (Applause.) You may remember Dr. Biden recently spoke about the critical role of community colleges in our higher education system. Community colleges are rapidly growing, and are needed now more than ever to keep America competitive. The American Graduation Initiative will build on the strengths of community colleges and launch new initiatives and reforms that will increase their effectiveness and impact by figuring out what works and what doesn't, modernize facilities, increase graduation rates, and expand and create new online learning opportunities.

Read the White House fact sheet on the American Graduation Initiative.

The Initiative is estimated to cost $12 billion over the next decade, but the President has outlined a plan to pay for it by cutting waste, while increasing Pell Grant scholarships and reducing the deficit: Not since the passage of the original GI Bill and the work of President Truman's Commission on Higher Education -- which helped to double the number of community colleges and increase by seven-fold enrollment in those colleges -- have we taken such a historic step on behalf of community colleges in America. And let me be clear: We pay for this plan -- this isn't adding to the deficit; we're paying for this plan -- by ending the wasteful subsidies we currently provide to banks and private lenders for student loans. (Applause.) That will save tens of billions of dollars over the next 10 years. Instead of lining the pockets of special interests, it's time this money went towards the interests of higher education in America. (Applause.) That's what my administration is committed to doing.

Dear Mr. President

Bob — Sat, 27 Jun 2009 08:53:35 EDT

Dear Mr. President,

I guess that acceleration of an existing trajectory is certainly a form of REAL CHANGE. But I don't know if that is the kind of change that the people who elected you had in mind.

Just to spell it out in idiot-proof terms: you cannot borrow your way out of a crisis of debt. Consuming more than you produce is unsustainable. Spending more than you make is unsustainable. Unsustainable means that at some point there will be a crisis / crash / default. The Piper is always paid, as they say.

You are clearly not an idiot and these simple principles must be as obvious to you as they are to me. So what do you personally gain from pursuing a course that cannot but make the inevitable crash worse and worse; that cannot but cause untold suffering for millions of Americans who are busting their butts to live a common, decent life? Real suffering for real people. Really. Who gains from your acceleration of the existing path toward economic armageddon?

I want to believe, Mr. President. I want to hope. I love your foreign policy rhetoric. I love your willingness to verbally step up to the plate and take responsibility. But there is the talk, and there is the walk. So far, the talk is A+, but the walk is a solid F.

Man up, Mr. President. You cannot solve the very real economic crisis we are facing by continuing down the same path with the same players. CLEAN HOUSE. Get rid of those guys: Summers, Geithner, Bernanke -- the whole Wall St. banking crew who took us here in the first place -- and set a new course altogether. Not an acceleration down the same course; that's the wrong form of change. Turn left, or turn right, or put on the brakes. When you are crashing, the accelerator is not your friend.

Yours sincerely,

Bob Job (has no job)

What do you think?

Krickle — Tue, 23 Jun 2009 10:07:48 EDT

I support health care reform because our country cannot continue on the same course. We all know that it may not be perfect from the start, but we have to start somewhere. Let's improve it as we go. My concern is that our active service men and women, veterans and their families will be asked to pay for their health care. I do not support this because they have endured and have sacrificed alot for our safety and freedoms. We should thank our military and their families by providing them with the care they need and require. I am married to a Vietnam Veteran, my son-in-law is in the Air Force being deployed next week to Afghanistan, my nephew is in the Army, and I have several uncles who have served in the military during war time so I know and understand the hardships they and their families endure. Let's pass health care reform and take care of our military...it won't be perfect from the start, but what is? We can make it work..

Problems with USA tax laws!

Unknown user — Wed, 17 Jun 2009 12:44:35 EDT

Certainly not many of you follow the ongoings of cases where people try to take advantage of tax laws to benefit themselves because the law itself is murky. However, there is a case that is drawing much attention unto itself, because of the nature of the "supposed" crime.

A fellow citizen who thought himself smart saw a loophole in the way he could pay his employees. If he payed them with gold or silver, which has to still be recognized by our society as a legal form of payment, he could give them more for less. This worked in the way that the legal system binds the value of these metals, to the current standings on the market. However when tax time comes around you are only taxed on the "face" value of the metals, not the current value of the market.

Citation is here

http://www.lvrj.com/news/48145032.html

and here http://www.lvrj.com/news/46074037.html.

Now to do this is wrong...absolutely not, seeing as the law is clear on how it wll tax its citizens and what is legal in payment. However, the point they are trying to make, is that this is fraud ...tax fraud because the person doing the action is doing this on purpose to avoid paying taxes.

OF COURSE HE IS, ESPECIALLY WHEN YOU GAVE AWAY OUR MONEY TO BIGGER CRIMINALS (GM, CHRYSLER) AND WE HAD NO SAY IN THIS!

So he is trying to save a few people from paying more money then they have to. If I get a slip saying I can not deduct a full amount of gas receipts on my business because technically the gas is also used for personal use, then send me a letter saying I can only report 80% or something likewise...dont bring me to jail because I did not quite know you could only declare a percentage.

They are trying to say he meant to avoid paying taxes, but then so was I when I declared 100% and not 80% of my gas receipts! This is a government that stone walls other investigations which could impact this one, on purpose because they do not want to give a chance to the defendant to have the upper hand. I am talking about an unlawful seizure by the FBI and IRS and the defendants home without proper warrants prepared, yet that case which was started before this one, has yet to see the light of day, and should that case rule that the seizure was unwarranted, then it would be thrown out of court, yet you can not discuss another case that has yet to be tried, therefor, it was a tactic to stone wall that is now leaving the defendant without any options.

He payed his employees with gold, the employees could have refused and he would have paid them cash, or cheque, but they accepted....so who is really at fault...the employer, employee or the goverment for not seeing that one law presided over another?

The government sees this action as a possible sore point where people will end up paying less taxes and the value of gold keep climbing, which BTW we have no real mines left in the US, all te gold mines are off this continent, we would end up being again stuck with foreign policies dictating our current economy!

I am signing out, however I think about Obama going off to jail because he gave as a gift to someone, a friend or family member, some gold coins and was found guilty of fraud. Can a gift be taxed, I don't know ....luckily I live in Canada!!!

Cancel Student Loan Debt to Stimulate the Economy

Heidi Roberts — Thu, 11 Jun 2009 15:24:05 EDT

Reprinted from: "Cancel Student Loan Debt to Stimulate the Economy" Facebook group by Robert Applebaum

"How many times have we heard from our leaders in Washington that education is the key to solving all of our underlying societal problems? The so-called "Silver Bullet." For decades, presidents, senators and members of Congress have touted themselves as champions of education, yet they've done nothing to actually encourage the pursuit of one on an individual level.

Some of us have taken advantage of Federal Stafford Loans and other programs, including private loans, to finance higher education, presumably with the understanding that an advanced degree equates with higher earning power in the future. Many of us go into public service after attaining such degrees, something that's also repeatedly proclaimed as something society should encourage. Yet, the debt we've accrued to obtain such degrees has crippled our ability to reap the benefits of our educations, causing many to make the unfortunate choice of leaving public service so as to earn enough money to pay off that debt.

Our economy is in the tank. There isn't a reasonable economist alive who doesn't believe that the economy needs stimulating immediately. The only debate now centers on how to go about doing it. While the new stimulus plan contains some worthy provisions, very little of it will have a significant and immediate stimulating effect on the economy. The Obama Administration itself doesn't expect to see an upsurge in the economy until mid-to-late 2010.

Instead of funneling billions, if not TRILLIONS of additional dollars to banks, financial institutions, insurance companies and other institutions of greed that are responsible for the current economic crisis, why not allow educated, hardworking, middle-class Americans to get something in return? After all, they're our tax dollars too!

Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy NOW. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created. Consumer spending accounts for over two thirds of the entire U.S. economy and in recent months, consumer spending has declined at alarming, unprecedented rates. Therefore, it stands to reason that the fastest way to revive our ailing economy is to do something drastic to get consumers to spend.

This proposal would quickly revitalize the housing market, the ailing automobile industry, travel and tourism, durable goods and countless other sectors of the economy because the very people who sustain those sectors will automatically have hundreds or, in some cases, thousands of extra dollars per month to spend. The driving factor in today's economy is fear. Unless and until the middle class feels comfortable enough that they'll have their jobs, health insurance and extra money to spend not only next month, but the month after that, etc., the economy will not, indeed, cannot grow fast enough to stop the hemmorhaging.

Let me be clear. This is NOT about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond.

I am in no way suggesting that the lending institutions who carry such debts on their balance sheets get legislatively shafted by having them wiped from their books. The banks and other financial institutions are going to get their money regardless because, in addition to the $700 TARP bailout, more bailout money is coming their way. This proposal merely suggests that in return for the trillions of dollars that has been and will continue to be handed over to the banks, educated, hardworking Americans who are saddled with student loan debt should get some relief as well, rather than sending those institutions another enormous blank check. Because the banks are being handed Trillions of dollars anyway, there would be no danger of making funds unavailable to future borrowers.

To avoid the moral hazard that this plan could potentially create, going forward, the way higher education in this country is financed MUST be reformed. Requiring students to amass enormous debt just to receive an education is an untenable approach, as demonstrated by the ever-growing student loan default rates. Having a loan-based system rather than one based on grants and scholarships or, ideally, public funding, has, over time, begun to have the unintended consequence of discouraging people from seeking higher education at all. That is no way for America to reclaim the mantle of the land of opportunity.

A well-educated workforce benefits society as a whole, not just the students who receive a higher education. It is often said that an undergraduate degree today is the equivalent of a high school diploma 30 or 40 years ago. Accepting the premise as true that society does, in fact, place the same value on an undergraduate degree today as it did on a HS diploma 30 or 40 years ago, then what is the rationale for cutting off public funding of education after the 12th grade? It seems to me that there is some dissonance in our values that needs to be reconciled. That, however, cannot come to pass until the millions of us already shackled with student loan debt are freed from the enormous economic burdens we're presently carrying.

Many of the vocal nay-sayers who have curiously joined this group seem intent on ignoring the fact that Washington IS going to spend TRILLIONS of dollars, likely in the form of handing blank checks over to more and more banks, as a way of getting the economy under control. Normative assessments of how things should be are fine, but they don't reflect reality.

Accepting the premise that Washington WILL spend Trillions of dollars in unprecedented ways (a good portion of which will just be trial and error, since we're in uncharted waters), what is the argument against directly helping middle class people who are struggling, rather than focusing solely on the banks and other financial institutions responsible for crisis to begin with?

Further accepting that there is an aggregate amount of outstanding student loan debt totaling approximately $550 Billion, (that's Billion with a B, not a T), one is forced to ask again, what is the objection to helping real people with real hardships when all we're talking about is a relative drop in the bucket as compared with what will be spent to dig us out of this hole?

In a perfect world, I share these biases towards personal responsibility and having people pay back what they owe and making good on the commitments they've made. But we don't live in a perfect world and the global economy, not just the U.S. economy, is in a downward spiral, the likes of which NOBODY truly knows how to fix.

This proposal will immediately free up money for hardworking, educated Americans, giving them more money in their pockets EVERY MONTH, addressing the very real psychological aspects of the recession as much as the financial ones. Is it the only answer? No, of course not. But could it help millions of hardworking people who struggle every month to get by? Absolutely. Given the current economic climate, as well as the plans to spend trillions of additional dollars that are in the works, one must wonder what is so objectionable about giving a real helping hand to real people with real struggles.

2009 and the new Obama Administration is supposed to be about change. Nothing in the new economic stimulus package represents a significant departure from the way Washington has always operated - it's merely a different set of priorities on a higher scale, but it's certainly not materially different from any other economic stimulus package passed during the past few decades.

Washington cannot simply print and borrow money to get us out of this crisis. We The People, however, can get this economy moving NOW. All we need is relief from debt that was accrued under the now-false promise that higher education equates with higher earnings.

Free us of our obligations to repay our out-of-control student loan debt and WE, the hardworking, middle-class Americans who drive this economy will spend those extra dollars NOW."

-Robert Applebaum

Pulse of the Economy

"Voice for Humanity" — Thu, 11 Jun 2009 13:15:30 EDT

By Padmini Arhant

With a finger on the pulse of the economy, the recent reports on employment, housing, financial and stock market post stimulus funding worth $787 billion approved by Congress in February 2009, has drawn both praise and criticism from different quarters. The praise is always welcome and encouraging for any administration and the Obama administration is no exception to the rule, particularly when they are relentlessly engaged in stabilizing the economy as the top priority.

Whereas, the criticism targeted at the President is no revelation considering the partisan Washington atmosphere. The results thus far, indicate the current national unemployment rate at 9.2% against 8% in the pre-approval stimulus package forecast. Further, the reports reveal the economy shed 1.6 million jobs with the White House claiming 150,000 jobs saved since...

More @http://www.padminiarhant.com

Thank you.

Padmini Arhant

Become Engaged

Engaged Citizen for transparency and accountability — Wed, 10 Jun 2009 15:16:31 EDT

We often hear today that our government is doing too much too fast. Really?

We have an economic melt down that is costing hundreds of thousands of jobs every month putting us in an economic and financial crisis. We continue to debate the financial and climatic impact of an unsustainable energy policy that requires a transition to alternative, renewable energy. We have the year-to-year cost of health care crippling individuals, businesses and our governement (Medicare & Medicaid). We seem to lack a commitment to the fundamental requirement of an educational system that produces competent, world class citizens on a scale with other countries.

We need to know what our representation in Washington is doing about these critical issues. We need to let Washington know how we would like them to legislate on our behalf. We need to make every elected representative accountable for the actions they either have or have not taken on our behalf.

Become engaged - let Washington know where we stand.

So Where Is Single Payer?

John from Durham, NC — Sun, 07 Jun 2009 10:06:05 EDT

This is my first blog posting and it is motivated by my disappointment in our new President's support for a SINGLE PAYER PLAN in Health Care. Seems that when it comes to 'Health Care Reform' things have gone back to business as usual. Health Care is controlled by the health insurance industry and their influence appears to be headed, ONCE AGAIN, to trumping any relevant reform. The President and his administration is just rolling over and playing dead.

Let's face it. If we don't have a STRONG PUBLIC OPTION then ANYTHING called REFORM in Health Care will just be a joke. I don't want to hear about 'one step at a time' or 'let's go slow' or 'we will get there just have faith". We should know better by now that just like the banking industry, unless we dictate terms to the insurance industry that makes them howl in protest we've not done anything to change anything. If they are going along with things then we know we've not done enough.

Damn It... create a strong public plan that ANYONE can get into and let the greedy pigs of the insurance industry see if they can catch up.

More then any other single issue it can be argued that what is done with Heath Care during this administration is the single opportunity to make a significant change to how our country moves into the future. Yes more then defense, more then the economy, more then gay marriage, more then energy, and for God's sake yes more then fretting over terrorism or which country has the bomb.

Going out on a limb here but I'm going to say it. If the Obama Administration looses this opportunity to move the insurance companies out of the center of control over our health care this administration will on balance be a failure.

Looks like that is where we are headed if you listen to what Obama is saying. Business as usual the insurance companies will control it all.

Bring Back the Road Gang

Southern Cross — Fri, 05 Jun 2009 20:27:53 EDT

It's without doubt the y3000 desert reforestation is going to take massive amounts of money. As I sit and watch the global economic crisis unfold across the world I see a similar characteristic of uncertainty overwhelm politicians across the planet.

How will we get through this? For the time being we are settled in relying on our governments bail out multi billion dollar companies. Trillion dollar bail out packages are the supposed Holy Grail used by politicians lacking the intelligence and imagination to create newer more effective cash flow solutions.

Continue reading Bring back the Road Gang

Budgeting

Mysti — Thu, 04 Jun 2009 19:36:17 EDT

I am not sure if anyone will be able to read this,THE FONT IS REALLY SMALL, especially; people in California; but we are in trouble. especially, our children. Education and Health Care is extremely important, no job, no tax no savings for the future. It is a problem that our state has to take from people whom are struggling to survive as it is. I am sorry but, our children are our future, without health care or education they will just be another number. This is 2009, our Country should have already passed this ridiculously fight over who gets what and when and how it is going to help. I have been an advocate for the disabled population for quite sometime now; and, it is truly sad that even the working disabled, still needing assistance to be able to work, are being cut. Our children's education is also important; without them how are we to grow?, how are we to continue with our Globe?, who is going to proceed with our country? All these questions need to be addressed. Someone is still being stingy and putting money in all the wrong hands. Our health care is ridiculous; with all of the air, water and food tainted our children are growing with health problems. This needs to be corrected. CALIFORNIA HAS A PROBLEM..

Reagonomics Revisited

Henry M — Mon, 01 Jun 2009 17:26:02 EDT

Reagan Did It

By PAUL KRUGMAN
“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.
He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.
For the more one looks into the origins of the current disaster, the clearer it becomes that the key wrong turn — the turn that made crisis inevitable — took place in the early 1980s, during the Reagan years.
Attacks on Reaganomics usually focus on rising inequality and fiscal irresponsibility. Indeed, Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence.
On the latter point: traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us.
The increase in public debt was, however, dwarfed by the rise in private debt, made possible by financial deregulation. The change in America’s financial rules was Reagan’s biggest legacy. And it’s the gift that keeps on taking.
The immediate effect of Garn-St. Germain, as I said, was to turn the thrifts from a problem into a catastrophe. The S.& L. crisis has been written out of the Reagan hagiography, but the fact is that deregulation in effect gave the industry — whose deposits were federally insured — a license to gamble with taxpayers’ money, at best, or simply to loot it, at worst. By the time the government closed the books on the affair, taxpayers had lost $130 billion, back when that was a lot of money.
But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.
These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.
Together with looser lending standards for other kinds of consumer credit, this led to a radical change in American behavior.
We weren’t always a nation of big debts and low savings: in the 1970s Americans saved almost 10 percent of their income, slightly more than in the 1960s. It was only after the Reagan deregulation that thrift gradually disappeared from the American way of life, culminating in the near-zero savings rate that prevailed on the eve of the great crisis. Household debt was only 60 percent of income when Reagan took office, about the same as it was during the Kennedy administration. By 2007 it was up to 119 percent.
All this, we were assured, was a good thing: sure, Americans were piling up debt, and they weren’t putting aside any of their income, but their finances looked fine once you took into account the rising values of their houses and their stock portfolios. Oops.
Now, the proximate causes of today’s economic crisis lie in events that took place long after Reagan left office — in the global savings glut created by surpluses in China and elsewhere, and in the giant housing bubble that savings glut helped inflate.
But it was the explosion of debt over the previous quarter-century that made the U.S. economy so vulnerable. Overstretched borrowers were bound to start defaulting in large numbers once the housing bubble burst and unemployment began to rise.
These defaults in turn wreaked havoc with a financial system that — also mainly thanks to Reagan-era deregulation — took on too much risk with too little capital.
There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.

Henry Mu

A spark of MOTIVATION

SummerLovin77 — Thu, 28 May 2009 14:37:01 EDT

I'm motivated at this time to do my part but unsure of where to start. Even though I am not the political type, I believe in equal rights & fair treatment for all mankind. My main concerns at this time are health care & the economy.

I will educate myself daily on these issues and search for others in my community, so I can start my process to see health care reformed. Time to act now inspite of life's problems. I will put more of an effort in seeking facts & use some of the helpful ideas I heard via The President's national call this morning. I'm still shocked & amazed that our government are actually paying attention to the cries of the people. I feel very honored, blessed, and relieved for I know that our President cares for us all.

I am ready & willing. I support President Obama. God bless AMERICA.

Near the Starbucks coffee shop in New York progremel explosion

Unknown user — Mon, 25 May 2009 20:00:07 EDT

The morning of May 25 near the Starbucks coffee shop chains in New York progremel explosion. None of the people are not hurt.

As reported by AP, the explosive wave of the institution vybilo glass. Lack of victims can be explained by the fact that the explosion occurred early in the morning when the coffee shop was still closed.

Police have not yet been able to determine when and by whom it was built an improvised explosive device, which presumably were made of fireworks.

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Save the auto industry

Howard Livingston — Mon, 18 May 2009 20:05:27 EDT

Here's my inspiration on how to save the American auto industry:

When Henry Ford produced his first car, there was a need to produce cars all day everyday. But now there is no need for new cars every year so why not produce cars every three years and allow for some real research and development and the dealships can stay active maintaining the vehicles they sell for three years.

      A. Include in the sale price (or discount) the price of 3 years of oil changes
      B. Include in the sale price free tire rotations for the 3 year period
      C. Guarantee a trade-in regardless to the condition of the vehicle at time of trade-in
      D. Make arrangements with recylcing plants to recycle the trade-in.

Ban vehicles older than 5 years unless they are classics in modern day running condition (emissions, fuel, etc.). A lot of the nestalgia is that the car is inexpensive, not endearing.

Newspapers want the government's help

Maggie Knowles — Thu, 07 May 2009 13:52:20 EDT

May 7, 2009

Dear Senator Klobuchar,

I heard you speak on CSPAN last night regarding the newspapers who want a variance on antitrust laws so they can collude and all charge for their content at the same time.

I loved hearing the story about your father's career as a journalist. And I fear that this very romantic idea of the newspaper industry will cloud your judgment.

The mainstream media at one time felt obligated to serve the public interest. Let's not forget that that's an old idea. We are way beyond journalists serving the public interest. Media serves their board of directors who want access to powerful people and profits, period.

Remember Judith Miller, the New York Times and the Iraq War? How much has this cost Americans in lives, money, wasted resources, wasted time? The costs to us, U.S., have been enormous, and we're still paying for it. Everytime I read the New York Times, I remember that. It's deep within me. I want to love the New York Times, but Judith Miller is in the forefront of my mind everytime I look at it. Because it's cost our country so much, as in the lives of U.S. troops (and innocent Iraqis), less money to educate our kids, no political will to change healthcare, and kept us in an oil economy instead of moving to a 21st century green economy. These newspapers serve special interests. Take the global warming issue, I would say that mainstream media has been largely responsible for keeping the idea that global warming isn't anything to be concerned about alive.

These are issues that effect the life of our species, whether we are to survive or go extinct. Very serious, yet, newspapers (and mainstream media as a whole) have not allowed us to have a serious debate that would actually inform the public in a way that allows the political will to develop to make the change we need. We should have moved to a green economy back in the 1980s. February 15, 2009 George Will's column in the Washington Post distorted facts about global warming to say it's not man-made. I mean, is it ever going to end? Not if our government gives them the tools to continue to support this garbage. Garbage into the public will get you more garbage from the public because these kinds of acts keep the public confused and that's not good for making change.

Also, it appears that many of their so-called journalists reporting on the financial sector may have been planting stories for the purpose of stock manipulation. And during the Obama campaign, the so-called journalists would ask the dumbest questions because they seem to be more interested in creating conflict (where one didn't exist) than going deep into the issues and facilitating a real discussion of them between the newsmakers and the public. Huffington Post is a good example of how to do this differently. CSPAN also had very good election coverage.

When reading these so-called journalists, one has to be very careful to read everything very critically. I wish that when I read an article online, that I could mouse-over the article to get a pop-up window that would also report on the journalist's past articles and their pattern of reporting so that I can clearly see if they've been reporting fairly, or if they've been reporting to support a special interest. For instance, how about CNBC and the stock market? How about Bloomberg and the subprime mortgage meltdown? All these so-called journalists were banging the drum for free markets and deregulation. Now they want to change the laws because they're losing money. Is this fair to the greenshoots like Huffington Post? Is it fair to the public?

The issues and the way reports are slanted to serve special interests (and advertisers) is obvious and it's the norm these days.

If the newspapers are failing, it's because they haven't managed themselves wisely. It's because they have a bad board of directors and bad leadership. It's because they bought into the idea that markets only go up and they unwisely took on more debt than they can now handle. Yes, it's about survival now, but I say that they have not served the public interest. In fact, they have played a huge role in the destruction of our economy.

They are concerned only with profit and to weaken antitrust laws would hurt the public interest.

You know what really gets me about all this? The argument that the newspapers are using could also be used for the Employee Free Choice Act. That a single employee doesn't have much leverage, but if all employees can organize, they then have the leverage needed to make the corporations play fair. But if you were to investigate where these newspapers (who are corporate entities) stand on unions, I'm sure they would think it's ok for corporations to organize, but it's not ok for individual people, say working at Walmart to organize. I would guess that if you were to study their reporting on Employee Free Choice Act, you would see a bias for corporations like Walmart and against unions like UAW, etc. It's disgusting. Where has the point of view of labor and unions been in the mainstream media over the last 30 years? Certainly not in the newspapers, unions and labor don't have a seat at the table as is reflected in the bulging bags of cash the CEOs have compared to the stagnated salaries, 50% loss of value of 401Ks, and loss of homes of ordinary Americans.

So please, leave your romantic ideas about your father's career at the door when considering the interests of the newspapers versus the public interest. Let the market decide regarding the newspapers. Our government already allows media to organize into huge conglomerates that serve special interests against the public interest, why give them any more power? Let the market decide if they pass or fail. Let the new greenshoots like the Huffington Post have their chance to grow in the market. We can have a bright future if only our government will support and nurture the greenshoots that really do serve the public interest.

The public needs a media that we can trust to serve our interest. To support entities whose bad practices have contributed largely to our current economic disaster is not change I can believe in. Please, do not give the likes of Rupert Murdoch and his Fox News Empire any more power. They are killing our country and we need to move on.

It's time for change Senator. Please, let it happen.

Kindest regards,
Maggie Knowles

Government equilibrium in relation to Current Policies

Chirag — Mon, 04 May 2009 00:22:48 EDT

Government Spending Vs. Tax Cuts (Less Spending)

Lately, it is hard to walk into somebody on the street and not strike up a casual conversation about the economy. Everybody is worried about the economy. According to the latest Gallup poll over 70% of Americans trust President Obama's plan for economic recovery. However, do people really understand what the Government is trying to achieve? If we don't have an answer for that question then we definitely don't have an answer for the next question: is it fair to criticize the Government Spending approach to stimulate our economy then give more tax cuts to higher-income Americans?

There are two major indicators of the economy:

Labor Productivity
Consumption

There are two ways to stimulate the economy and they both move the labor productivity curve and consumption curve in the same direction. Both ways work to a certain extent.

The two models are

1) Tax Cuts

2) Increase Spending

We had seen two tax cuts during President Bush's administration. A tax cut is NOT a freebie, and after we get a Tax Cut we will see the Tax Increase at some point in the future because Taxes are a very important source of revenue and it is the right of the Government to collect Tax. Tax cuts come with the cost and as I said earlier, you can only make an adjustment to a certain extent.

Now let’s talk about the Government. The ideal government tries to satisfy this formula:

G+[G’/(1+r)] = T+[T’/(1+r)]

G stands for Govt. Spending

T stands for Tax

R is Interest Rate

In simple terms we call that a balanced budget. It can be balanced by changing either variable (tax or govt. spending). I won’t tell you that you are wrong because you like more tax cuts because it has the same effect as increased government spending. I find it necessary to increase government spending because we are already $1.5 Trillion in deficit and the problem is not on the supply side. The problem is with the demand side. People right now do not have money to spend. Only the government can spend money but I totally agree that when the consumption curve starts moving with the labor productivity curve then government spending needs to be stopped. Until then, the government needs to spend, and the majority of economists agree with increasing government spending. People are worried about budget spending, but spending fluctuates depending on how and where the economy is and all this spending in the bill is not a concrete number that needs to be spent. If next year the economy recovers then the government doesn’t have to spend money just because it has written a 1000 page spending bill. My anger is not towards the last administration because they were republicans. My anger is towards their spending pattern and the disparity in spending. Let me give you an example of FY 2008 Spending breakdown by department:

Dept of Education: around $ 80-90 billion
Dept of Energy: around $20-30 billion
Dept of Defense: $630 Billion
Health and Human Services: over $700 billion (We do need Health Care Reform)
Treasury dept: over $500 Billion (including interest on debt)
Dept of Veteran's Affairs: around $80 Billion
Total Debt: Over $10 Trillion.

That is where I have a problem: outrageous spending but nothing to grow a better economy. The problem is not with spending. The problem is spending without a plan. If we spend so much money how can we pay for it? What will happen when the war ends? What will it do to the unemployment rate when our troops come home? and When and How will the war end? In the name of protection, money was wasted left and right. It left our economy handicapped with the most devalued currency in a decade. The devaluation of American currency was another big factor contributing to the slowdown of our economy as we couldn't afford foreign-made goods--all of sudden those goods became more expensive. It hurt all the nations that depend on the United States of America for their products including China and the Indian software industry. That has raised the need for another global currency. People are saying President Obama is stealing from their kids and grandkids. What if there is no economy left for their kids if we don’t do anything today? Grand Theft was committed during the Bush Administration in the name of "No Child Left Behind." It is an amazing program without sufficient funding and I already gave you proof of spending above. The results were clear as glass: a record number of college drop outs. When India and China are producing a record number of doctors and engineers, we started producing a record number of HIGH SCHOOL DROP OUTS. I know we are better than this. If we are not better, then why would anybody come to America for higher education? Over 70% of students in higher education are foreign students. I had a hard time finding somebody who speaks clear English before I signed up for my classes in college. My math tutors couldn't even say any body's name. So she used to write names on the black board to take attendance. Without disrespect to any of those students why couldn't we have our American kids go in higher education and build better America? Why do we all have to fight for blue-collar jobs? Seriously, how many Joe the Plumbers are out there who are making more than $250 thousand?

When it comes to Energy, we all know that oil is a limited resource. It will run out with time. But the Sun will always shine, and the wind will always blow. So why is it so hard to pay attention to alternative sources of energy? Why is President Obama called the thief of our children's future when he is the one who is trying to invest in alternative sources of energy?

So if we don't invest in the Economy, Energy and Education today then WHEN?

Why is it a bad idea: To invest money in the ECONOMY
Why is it a terrible idea: To invest money in search of Alternative Sources of ENERGY
Why is it wrong: To invest money in EDUCATION so that we can produce more engineers, doctors and better college professors in our country.

President Obama's plan to recovery and prosperity offers the solution those core issues such as Economy, Energy and Education.

I am taking a commitment to educate myself, keeping an open mind and understanding first hand about the plan. I would't want any views from hate media specially FOX NEWS. It is time to move forward and get work done. America has great leader with clear vision and plan, and we an American people has done our job by electing right people on the right spot.

Organizing Meeting Saturday 5/2/09

Ross — Thu, 30 Apr 2009 10:50:07 EDT

To effectively plan for and build up to the Clean Energy Jobs Days, we'll hold an Organizing Meetings on Saturday May 2nd at 2:00 at the Barrow Mansion in Jersey City. Please go to:

http://pol.moveon.org/event/events/event.html?event_id=93104&id=

to sign up. What's the Clean Energy Jobs Day?

On May 28, all over the country, we're organizing a Clean Energy Jobs Day -- a national day of action to turn up the heat on Congress by showing the promise of the clean energy economy to our senators and representatives, the media, and the public. We'll highlight the clean energy jobs and businesses that already exist in our communities, and we'll showcase the ways in which they could expand. During the Jobs Day, each MoveOn Council will organize a press conference at a clean energy business, and then visit a few other clean energy sites. We'll call on their senator or representative to support President Obama's plan for a new energy economy.

More details and upcoming events on our blog:

http://jerseycity-hoboken-moveon.blogspot.com/ Please join us

Rossella Aquila

MoveOn.org Coordinator

Jersey City Hoboken Council

Obama Administration – Performance Assessment

"Voice for Humanity" — Thu, 30 Apr 2009 01:42:10 EDT

By Padmini Arhant

Courtesy: www.padminiarhant.com

It is one hundred days since the new administration under President Obama took office on January 20, 2009.

Precisely, around that time the nation was in a precarious situation specifically with the economy in severe recession heading towards a possible depression. It required urgent policy decisions to avert the serous economic crisis contributing to the crumbling housing market, potential bankruptcies of the auto industry, tremendous job losses, failing financial institutions and volatile stock market.

Even though, the crises are far from over, the administration demonstrated diligence with the legislation of the $787 billion stimulus bill through American Recovery and Reinvestment Act accompanied by various strategies to reform and revive the financial institutions and housing market.

The financial bailouts were justifiably controversial and awaiting the stress test results due on May 4, 2009. Meanwhile, the alternative of inaction would have proven equally detrimental and exacerbated the liquidity crisis in the financial market.

In addition to the measures in stimulating the economy, the administration’s effort to sustain the existing jobs in different sectors particularly the auto industry is noteworthy. Further planning and policy decisions to create new jobs phrased, as ‘green jobs’ through vigorous environmental and energy programs is the right course of action to efficiently deal with the challenging issues of global warming and energy independence.

Other achievements in promoting science and technology such as the stem cell research within the realm of ethical code, proposal to digitalize medical records as one of many innovative solutions in the health care policy, coordinating with the environmental agencies in the protection of threatened and endangered species are impressive. However, the request from the environmental groups to rescind the rule that limits the protection of polar bears from the melting Arctic ice caused by climate change is pending approval.

In social programs, the signing of two major pieces of legislation into law – the Lilly Ledbetter Fair Pay Act, ensuring equal pay for men and women and the State Children’s Health Insurance Program (SCHIP) that guarantees 11 million low-income children affordable health care are significant actions.

World health crisis in the wake of the ‘pandemic swine flu’ appropriately handled by the Obama administration thus far.

Despite the fragile economic conditions, the Obama administration’s response and reaction to most issues has been right on target. The anticipated legislation of the budget focused on education, energy and health care should accelerate the economic growth for rapid recovery from the existing crises.

The administration must strive hard to isolate investment from wasteful spending i.e. earmarks or pork barrel that often finds its way through major budgets and stimulus packages. Likewise, preventing the special interests and lobbyists’ continuous dominance should be part of the administration’s agenda.

With respect to transparency and accountability, the recent scandals involving legislators raises credibility issue for the majority party. It is important to maintain bipartisanship in legislative matters for national interest since future holds no guarantee with the majority rule. Moreover, divisive politics contributes to polarization jeopardizing national unity and ultimately election results.

In foreign policy matter, the recent participation in international summits appears promising with the exception of the boycotting of the Geneva conference on ‘racism.’ Please refer to the article on ‘Racism – The Durban II Geneva Conference’ @ www.padminiarhant.com.

Obviously, the rising tensions in the international arena from Afghanistan, Pakistan, Iran and North Korea are few of the many challenges ahead. Resolving the Israeli-Palestinian conflict in the form of two states solutions is paramount to attain permanent peace in the region. It would create a pathway for others sharing similar aspirations.

Combat troops withdrawal from Iraq and simultaneous deployment in Afghanistan deserve individual criteria and attention. Military operation always yields immense casualties and often precious lives are lost in the process.

President Obama’s initiative with Russia in the reduction of conventional weapons and other arsenal is praiseworthy. Nevertheless, it remains subject to the real statistics and the actual defense spending contraction by the geopolitical powers. The bold and audacious declaration of nuclear disarmament was music to ears, although the reality of it relies on the willingness and commitment by the other nuclear nations.

At the G-20 summit, the United States’ reluctance to support France’s proposal to force international financial institutions unveil the corporations using tax havens for tax evasions was disappointing. The unpopular yet meaningful recommendation contributed to a major disagreement between France and China leading to the mediation by the U.S. President Barack Obama. The international sources attributed China’s objection to the potential ramifications on the corporate investments in that nation.

In conclusion, the result oriented performance reflects President Obama’s admirable leadership skills and the administration’s ambitious goals in education, energy and health care is a step in the right direction.

I wish President Obama and the administration success in all endeavors.

Thank you.

Padmini Arhant

Obama's First 100 Days and the Politics of Transformation

N. Julio Barthson - E-Campaign Leader — Wed, 29 Apr 2009 16:47:58 EDT

A great tribute by former presidential candidate Gary Hart..

Change is in Our Future Not Our Past

Tom Awtry — Wed, 29 Apr 2009 02:30:55 EDT

Every good past President has looked to the future, while every failed administration has suffered with the past, in part by their own misunderstandings of the failure(s) and to fully concentrate on moving their own agenda’s forward! Consequently, we the American public are as much to blame, for their failures as they are.

Today in office we have elected a forward looking Chief Executive, tasked with the mission of tackling the previous administrations failures and deceptions; while moving onwards his own vision of how America should be.

To me, this means let the president delegate responsible, for corrective action on the issues concerning Gitmo, torture, Rove, FOIA and FISA to his appropriate cabinet members and select committees within congress.

We as diligent citizens and supposed caretakers of our country should and must be focused on issues such as health care, getting out of Iraq, the economy and perhaps an over looked issued by many, an improved, affordable plan to enhance our current educational system of higher learning.

We have seen hundreds of thousands of jobs disappear over the past several months, will these jobs ever come back? The answer is “No”!

Soon we will have thousands of veterans returning from overseas, will they remain in the military service? Again, the answer is possibly “No”!

So what are the solutions to the aforementioned issues within the Obama Administration? I feel the president has chosen the most correct choice by relying on what made our nation what it was in the “past” – “Education”.

But, as we all know, including the president, both the cost and quality are the downsides for most of us, even the slightly “upper middle class”.

As quoted by President Obama (President Obama on Higher Education and Reforming Student Loans):

Over the past few decades, the cost of tuition at private colleges has more than doubled, while costs at public institutions have nearly tripled. Tuition has grown ten times faster than a typical family’s income, while inefficiencies in the student loan system provide lenders billions of dollars in wasteful subsidies instead of making college more affordable for all Americans.

When we review the 60’s, the days of placing a man on the moon and the golden times of NASA; education was at our country’s forefront, even while the Vietnam War was in progress, education was considered a must for survival in the Cold War overall and personal success in life as an individual(s).

We must not accept taking a backseat within the international community, as we have and again noted by the President in his Remarks by the President at the National Academy of Sciences Annual Meeting:

Our schools continue to trail other developed countries and, in some cases, developing countries. Our students are outperformed in math and science by their peers in Singapore, Japan, England, the Netherlands, Hong Kong, and Korea, among others. Another assessment shows American 15-year-olds ranked 25th in math and 21st in science when compared to nations around the world. And we have watched as scientific integrity has been undermined and scientific research politicized in an effort to advance predetermined ideological agendas.
Complementing while confirming the aforementioned is the following from Gallup Polls with an article entitled: “Public Discontent With Quality of U.S. Education, where we can see the American public over the past eight years have been frustrated with the Bush Administration’s progress on education:
A three-year aggregate of Gallup data (2002-2004)* on attitudes toward the public schools indicates that 44% of Americans are very (11%) or somewhat (33%) satisfied with public education, but a slight majority, 55%, are either very (25%) or somewhat (30%) dissatisfied. Despite these negative perceptions about the quality of the U.S. education system, past surveys have demonstrated that most Americans are happy with their own educations and the educations their children receive.

So, should you subscribe to the fact our nation’s higher learning institutions are to expensive and our primary education system(s) of public schools are not performing as they should; how is the president and perhaps more selfishly “us the American public” going to resolve the educational systems and turn their services into “jobs” and an increased standard of living for all of us?

The President has prepared congress for needed changes, staring with his Fiscal Budget for 2010 with major investments in broadband networks, clean energy technologies, and health information technology, as I’ve quoted him here (Fact Sheet A Historic Commitment To Research And Education):

President Obama has already made science and technology a top priority: The Recovery Act includes $21.5 billion for research and development, the largest increase in our Nation’s history, and well as major investments in broadband networks, clean energy technologies, and health information technology. The President’s FY10 budget includes sustained increases in basic research, $75 billion to make the research and experimentation tax credit permanent, and funding to triple the number of the National Science Foundation’s graduate research fellowships. The President is committed to restoring integrity to science policy, and making decisions on the basis of evidence, rather than ideology.

Also, the President has enacted steps within his own Executive Branch (President Obama Meets with Family Struggling with College Costs, Underscores Need to Eliminate Wasteful Spending in Federal Student Loan Program, Reinvest Savings in Making College More Affordable):

Today, President Barack Obama met with a family struggling to afford the cost of college and underscored his commitment to cutting wasteful spending on federal student loans by ending taxpayer subsidies to banks. President Obama discussed the strain that rising tuition costs are placing on middle class families and his proposal to end the private Federal Family Education Loans program that lines the pockets of the banks who serve as middlemen while costing the American people $5 billion a year.

As I elated to earlier, since this is a failure of past administrations to attend address the president has wisely delegated this national concern to Vice President Joe Biden, who in my own opinion as been doing an outstanding job for the president in seeing all measurers are brought to the forefront on getting legislation authored and past in a bipartisan manner.

Vice President Biden has implemented “Middle Class Task Force” to find solutions and assist him in seeing colleges become more affordable through a series of town hall meetings. Here in an excerpt from such a meeting in St. Louis, the excerpt is entitled: “Middle Class Task Force Report: College Affordability”

Middle Class Task Force Report: College Affordability

An obstacle to federal student aid is the unnecessarily complicated application process that is often intimidating to families and students seeking loans. In order to qualify for aid, students or their parents must first complete the Free Application for Federal Student Aid (FAFSA) form, which contains well over 100 questions on income, assets, family characteristics, personal characteristics, and other items. Completing the FAFSA requires families to sift through paperwork and transfer numbers from tax forms that they may or may not have readily available.

The following is a downloadable pdf report, which bears reading, regarding steps being taken by the Obama administration to lower college cost to the middle class desiring to enter college and making the application procedure more simplified and friendly:

Middle Class Task Force Staff Report (pdf)

So, what’s the Point:

Much “to do” recently has been made in the media over the release of torture memos and the president’s first 100 days in office, which are all constructive concerns and self-servicing pats on our own backs for electing the “right person for the right job”, but lets not get hung-up on the issues of witch hunts and arrogance that got us into the trouble we’re in today.

Lets keep pressing forward in correcting mistakes and apathy of the past with “new ideas” and approaches that will insure we’re never in the fix we are in today.

After all wasn’t it President Bush who said “Fool me once and you’re a fool, fool me twice and I’m a fool”.

The following selections of videos cement President Obama’s commitment to the middle class and his devotion to insuring every American is entitled to higher learning:

Opening the Doors of Higher Education

Taking a defiant stance towards those banks defending the status quo, the President proposes cutting out the middle man in student loans for a savings of almost $50 billion over ten years.

Additional Videos:

Real Tax Cuts Making a Real Difference

Flanked by Americans who have benefited from his Making Work Pay tax credit, President Obama speaks about his tax policy and how it is helping people across the nation.

Taking on Education

The President explains the urgency of changing the way we educate our children, and offers four pillars of reform.

Meet Secretary of Education Arne Duncan

Secretary of Education Arne Duncan talks about the source of his passion for education reform — and why he thinks it’s about more than education, it’s about social justice.

Additional postings regarding this topic and others may be found here:

Prayer Request for April 29, 2009

White House Prayer Team — Wed, 29 Apr 2009 00:34:52 EDT

This week our focus has been placed on addressing the ills of our economy. Even after the recent election, we view the economy, still, as our Issue #1.

Our Verse of the Day April 28, 2009 (http://www.whitehouseprayerteam.blogspot.com) was "Will you not revive us again, that your people may rejoice in you?"— Psalm 85:6 (NIV) God is working to restore back to us all that which has been taken away from us. He knows our hearts and will work to perform what it is we seek Him for.

Monday-Wednesday (April 27-29, 2009) we are praying for those friends and family members we have enduring the woes of the housing crisis. Sub-prime loans, greed and corruption, not to mention financial irresponsibility has driven the nation into the slumps of a crisis that has not been known for over 50 years.

We don't accept this as finite. We don't see this the end all be all, however, we rest our hopes not in the White House, but instead in the Creator who sees and knows all. He loves us and rewards our good deeds.

Join in with us tomorrow and pray for those who are struggling to see the light at the end the tunnel. As you pray, believe that God is hearing you when you pray. Although we need faith to overcome those things that we see, we also must count on the actions we perform to act out our faith in what it is we do not yet see.

So many people have contacted the prayer team by email at whitehouseprayer@live.com to be added to our prayer list and we would hope that you follow their steps as well. Others have also contacted us seeking to provide free consultations and advisement. (*All parties have been informed that any services provided must be at no cost). Add your email for that information as well.

Listen, we believe in God. He truly answers prayer! Join with us in prayer and we will ensure that our empowered time with Him raises those things we request pass the ceiling and into the welcome of His love.

This is our prayer-WHPT

Earth Day and Green Energy

Tim Schram — Wed, 22 Apr 2009 20:23:52 EDT

All the proposals and policies I have seen have the same flaw. They rely on major corporations and electric companies to produse the power and ignore the potential of individuals and commercial buildings entirely. Sorry, we can conserve. THAT is not good enough!!!!!! Did you know that there is over three times the surface area available today on residential buildings alone than the 100 mile by 100 mile mega facitility proposed for Nevada? That sight is said to be capable of meeting all our electrical needs. One of the big problems is transmission to areas of demand. That is the same problem with mega wind farms in the Dakotas. The other problem with both is that we are still at the mercy of companies with the ethical track record of Exxon, Enron, and electric utilities like National "Greed" in NY.

Installation of solar and wind technology on any residential and commercial building that wants it could more than meet our electrical requirements. AND it is generated where it is USED. There is no need for the vast majority of our electricity to be transmitted hundreds or thousands of miles. Throw in a smart grid that can bring in electricity to calm and overcast areas from all surrounding areas in ever increasing circumference and even localized shortages can be met with minimal net transmission distances.

Require the grid to by excess generation at wholesale prices and allow them to sell it to electricity intensive facilities at retail prices. This keeps the utilities profitable in the transmission business. If needed they can operate a drastically reduced number of power plants to meet rare power shortages.

Another area that gets a lot of hype, but is short sighted is plug in electric cars. This may be a short term necessity, but should not be looked at as a long term solution. Why should we be limited to the range of a batteries charge? Imagine trying to go cross country on battery power. There is an alternative. Wireless resonant induction is a technology that could be adapted to wirelessly powering vehicles on a continuous basis. This technology may be a decade or so off yet. The idea is that the transmitter coils be incorporated into the pavement at a depth of 3 to 5 cm. The power for these coils is supplied by local wind and photovoltaic generators along the roadside with back up from the smart grid. Photovoltaic in urban areas could be produced by CIGSS technology on the sound barriers with no noticeable change in aesthetics. The receiver/s should be mounted on wheeled, to prevent contact of receiver to pavement, extension arms at 1 to 5 cm above the pavement surface. The receivers and transmitters are sealed in waterproof casings similar to the technology used in modern electric toothbrushes. Currently efficiencies are on the order of 90% within 10 cm. The electricity needed to operate the vehicle is transmitted from the road coils to the receiver coils only when they are in resonance, like 2 bells of the same pitch. For heavier vehicles and loads, like tractor trailers, more receivers can be used to increase the power. Small battery systems can be used for brief interruptions to the wireless system or brief excursions out of the wireless network. The electrical energy is not transmitted unless the receiver is at the correct frequency so danger of electrocution or other negative effects is minimal.

MIT is working on this technology to power the appliances in your livingroom today. That requires transmission overdistances of upto 15 feet. This is done in rooms in which you are living and moving about. All without your sensing the electrical transmission. Another exampeare the wireless charging plates for cell phones and ipods, etc.

I just want to stress in closing the urgency of expanding our discussion of alternative energy to include decentralized generation. It is imperative in my opinion to develop this technology to most effectively meet future needs and as the most exportable technology to the developing world.

A Lot of Talk Finally Some Action

Tom Awtry — Tue, 21 Apr 2009 22:04:28 EDT

Call Centers - India

During the Presidential campaign we heard numerous politicians expounding on their concepts on ways to retrain our veterans returning from Iraq and Afghanistan and fellow Americans workers who saw their jobs outsourced overseas.

Finally we have one brave Democratic Senator Bob Casey of Pennsylvania with a workable plan to introduce a new law that aims to pay community colleges nationwide $1,000 per student to retrain laid-off workers, which Casey says would come from existing funds already allocated to job retraining in the department’s budget.

In an article authored by Anne Fisher of TIME, entitled: “Tuition Help for the Unemployed Gains Traction” the following excerpts regarding Senator Casey’s pending bill:

His inspiration for the bill: Pennsylvania’s community colleges, 10 of which have enrolled 1,062 unemployed workers in free training programs this semester, at a total cost to the schools of $741,788. “They shouldn’t have to foot the bill alone,” Casey says. “My bill will encourage other community colleges across the U.S. to do the same thing.” Senate Democrats are working to build bipartisan support for the bill and expect to move it forward in the coming months. (See TIME’s special report on paying for college.)
A few states already have a head start. California, whose 11.2% March unemployment rate is the state’s highest since 1941, is rushing to funnel $415 million in federal stimulus money to 49 job-retraining centers. Most of the training will be designed to qualify people for jobs in infrastructure construction, health care and green industries like waste recycling and wind-farm technology. In Texas, legislators will vote next month on a final version of a 2010-11 budget, already passed by the state senate, that boosts spending on higher education by $1.5 billion. That figure includes $500 million in federal stimulus funding for workforce retraining and a $134 million state-funded increase in financial aid for students.
Michigan, whose 12.6% jobless rate is the highest in the U.S., with still more auto-plant closings coming soon, launched its “No Worker Left Behind” program in August 2007. So far the state has footed the bill — up to $10,000 per displaced worker — for 61,434 unemployed Michiganders to learn the math, technology and science skills they need to embark on new careers at companies like Hemlock Semiconductor, Dow Chemical and Dow Corning, which are investing and hiring there. Also in demand: the program’s newly trained nursing assistants, physical therapists and health-care technicians.

Hopefully Senator Casey’s proposed legislation will quickly be approved, in congress, since it won’t be long before our long awaited veterans will finally be returning home and will be in direr need of employment.

The following video concerning outsourcing is a revolutionary twist on outsourcing. American workers have themselves gotten into the act of sending their jobs overseas. For example; there are tasks, such as proof reading that could be accomplished overseas as well as it could be done in the office back in the states, thus allowing more time, useful energy and increased productivity to be devoted to other, more important tasks. Give the video a watch it’s interesting.

More American Workers Outsourcing Own Jobs Overseas

The following video concerning outsourcing is a revolutionary twist on outsourcing. American workers have themselves gotten into the act of sending their jobs overseas. For example; there are tasks, such as proof reading that could be accomplished overseas as well as it could be done in the office back in the states, thus allowing more time, useful energy and increased productivity to be devoted to other, more important tasks. Give the video a watch it’s interesting.

Additional postings regarding this topic and others may be found here:

My blog is at http://mark.baland.net/blog .

markbaland — Sat, 18 Apr 2009 17:51:31 EDT

My blog is at http://mark.baland.net/blog .

Chapter 1: Putting Money In The Hands Of Purchasers.

kavips — Fri, 17 Apr 2009 15:07:50 EDT

Who purchases things? Who ever it is that does so, they need to get snapping..... kavips

Here is an interesting question. What happens in a Great Depression?

Let's trace the fallout from one single event: General Motors going out of business. As soon as that happens, its now unemployed workers must cut back on their spending. Sales drop precipitously in neighboring restaurants, and a percentage of those food service employees are quickly laid off.. None of those ex restaurant employees can now buy anything at the supermarket, so it too lays off a percentage of its stock clerks. With everyone in survival mode, the local gas stations no longer can move the amount of gas they are used to selling, and they too, must add their layoffs to the pot... Even insurance salespersons begin to lose a flood of accounts as they expire and fail to get renewed; now they too shop less, contributing to an additional scarcity of business, stopping by the supermarket now for only emergencies. Because of plummeting sales, the supermarket has no choice; again it must make drastic cuts. One week later the gas station does likewise and cuts everyone but its owner, who himself becomes the sole employee, manning it from Monday through Friday, 8 am to 5 pm. Fewer and less people working creates even less economic action, which in turn, causes fewer people to work, which causes even less economic action. The downward spiral grows wider. Left alone,... it is unstoppable. Eventually one very wealthy person, the last man standing with any money, buys up the entire town for pennies on the dollar.

But wait,....aren't there a lot of other towns supplying parts to GM, simultaneously undergoing the same scenario? Yes. Across this nation, in every village, town, or city, because of GM's folding, the same downward spiral occurs.... As people lose their jobs it causes more people lose their jobs; the reason they lose them is because their neighbors lost their jobs first... The unemployment curve which once climbed steadily, suddenly shifts, and rises exponentially.

Obviously the critical point where we should attack this economic problem is at it's very beginning... Keeping GM afloat. As one can see from this projected downward spiral, which widens as time progresses, the longer one waits to apply a fix, the higher becomes one's cost to correct it. Eventually the price of fixing becomes just too high; money runs out, and there is nothing more which can be done. To succeed, one has to nip it in the bud.

The four best methods for doing so are discussed below.

A) re-running the stimulus tax check scheme.

B) putting a moratorium on household mortgages for three months.

C) have banks flood lending markets with very low rates.

D) creating a WPA to build public works, funded by the Federal government.

Method one is the idea we found to be the most politically expedient; it was the first idea that occurred, after all it was just this past year we tried it. Although its impact or effect on our economy is still debatable, most public opinion polls taken beforehand did show that once it was received, paying down one's bills was almost every recipient's first plan of action. Even though the second quarter of 2008 showed some growth, that positivity was short lived. Today as we look backwards from 6 months past, we see there was little residual effect from that stimulus package, except for the admonition that things would have been much worse had we not followed through on it. What is almost forgotten however, it that this stimulus money is not paid for in advance by taxpayers, but is borrowed (as is a large portion of our budget) from various lenders charging us various rates of interest. Not only do we have to pay back the stimulus funds, but when that time comes and we do have to pay them back.....we will be paying back far more than we received,... due to the interest that is now accruing daily.

Fortunately we can learn from past mistakes. We can choose to put our "shot-in-the-arm" purchase on our national credit card, and continue to say "we are living well". But on the day of reckoning when we do pay it back, our economy could be doing far more poorly than it is now... (which means (1) it won't get paid back; or (2) that we will really suffer horrible economic hardships when we do pay it back, much worse than we suffer now).

Our investigation discovered that a stimulus package succeeds only when a nation is not buried under debt. Normally, if extra money gets placed in our hand, we spend it. A stimulus tax check should work in theory. If everyone spends their check simultaneously, their extra purchases deplete retailer's inventories, which if restocked, would create new activity and growth in the manufacturing sector; therefore in theory....the economy should grow. But as it stands right now, when everyone is mired so deeply in debt , the bailout money gets used to write off existing red ink. What winds up happening is that as I write a check to my debt company, who then uses my money to write off a check to their debt company, which in turn, flips those funds over to their debt company... Everyone passes the money around and around, and instead of manufacturing jobs being started, it is only red ink that gets written off. No new investment gets placed into projects that create new wealth. Bottom line: all that is happening within each and every one of today's economic stimulus packages,... is that we are borrowing from our nation's public debt, to pay-off our nation's private debt. The public debt is still owed by the public; so nothing really changes, except the terms of the loan, and name of the entity to whom we owe!

The next option holds much more promise: that of granting a stay for three straight months on paying off one's mortgage. Stop for a second,......... now imagine how quickly you could get your personal finances in line, seriously, if you were allowed to go without paying three months worth of mortgages?

Month one would be dedicated towards catching up on bills. Month two, would be dedicated to getting completely caught up, and possibly ahead on bills. Month three would be spent on buying cool stuff. Bouncing this idea around to a lot of people, the same exuberant reaction comes from almost every household: this works for them.

So how would this affect those financial institutions actually in charge of handling the notes? Before I go forward with that task, we need to take a moment to familiarize everyone with the difference between real wealth, and "virtual" wealth.

Real wealth is what we are familiar with; it is something we can touch. Our car for instance. "Virtual" wealth is something seen primarily on a computer screen. We all know what real wealth is: as little kids we saw Scrooge McDuck's money room in our Disney Books ... Virtual wealth is the same thing, except it has "pretend" value. This homily should help explain how "virtual" wealth accumulates it's value.

Let's assume that somehow you were able to convince me to purchase some gravel which you picked up alongside the highway while you were walking forward to meet me.. I look it over, decide to buy it, thinking hopefully that I can sell it at a profit sometime later, and pocket the difference. And why not?.. I certainly don't need rocks, ... but I could use some extra cash. However my wallet is short of funds and our transaction which we are discussing,... is in jeopardy. To keep it afloat, you decide to take one dollar for every ten of which you are asking, and when I sell the rocks off later, I will give you nine more dollars at that time...

So here is how "virtual value" works. The real value is $1 dollar for the pile of rocks I received, because that was all of the out of pocket expense that I paid you.. However, instead of $1 dollar, I write down its value at $10, because eventually that is value of what it will cost me. But in truth, it will not actually cost me $10, until ... that moment after it is sold.. Sound complicated? It really isn't....

Here is why. You made $1 dollar selling me the rocks. They cost you nothing to acquire. Now that I have the rocks, if they go worthless it will only cost me a dollar anyway. So I lose a dollar.

However... in some computer, it shows on file that you are carrying the value of $9 dollars owed to you by me as an asset (money coming to you), and I am also carrying my value at $10 as an asset so that I can sell it if needed, so between the two of us, we stand to lose $19 dollars if the gravel market goes to zero. And it's all really just make believe money, since only $1 dollar actually changed hands. *

Our current crises is predominately over "make believe" money; it is over stuff which we thought was owed to us, based on its arbitrary value at the time we made an agreement. We still have the objects of which we paid for in our possession.

Background explanation over.

So back to the mortgage write off. I lend you $100,000 for your house, and give you a payment book. Now that I've given you the money, I have a lien on your house, and I collect the money plus interest over time... If you do not pay me back, say skip a month, I do not lose anything except "anticipated earnings". I am not in the hole any more or less because you did not pay. I do not have to pay anyone for the house. Everything stays the same, except the additional income I thought I would receive... It simply does not come in when I expected it... which is exactly the same thing that would occur during a restructuring bankruptcy. For a while you pay nothing, until eventually you catch up and resume payments and pay off the loan..

Under our agreement, if you couldn't pay in a timely fashion, I had the right to sell your home and pay your debt for you. In a thriving economy that is possible. But, as a lender, if no one out there has any interest in buying the house, and I unload it at the going rate market value which costs me money instead of making it, I stand to lose all my money I gave you. Obviously it would be better for me to allow you a small grace period, which will cost me nothing in real money (only the virtual money I thought would be coming in), but will guarantee that over the life's value of the loan, I will lose nothing... Between losing everything and losing nothing, being a rational person, as your lender, I would prefer to take the latter course of action.

To nip another argument before it gets started, allow me to reiterate with one other example. Let's switch roles, you and I .... Let's pretend that you are a mortgage company worth one hundred million dollars, and you have lien on a 1000 mortgages worth $100,000 dollars each. During the good times your monthly income averages $900 per mortgage for a combined total of $900,000 per month. Out of that monthly amount, you pay off your employees, utilities, maintenance service contracts, and costs charged to you by other banks. You keep the difference as profit. Speculation suggests that even without the moratorium, this March you will be faced with a 75% failure rate as people accept the fact that they just can't pay. Your monthly income suddenly drops to $225,000. (down from $900,000).

In the following month, April, 50% of those who were late, will pay their late March payment, but will still not have enough cash available to make their payments for both months. The other 50% will be down by two months on their payments, with no real hope of ever making it up. In virtual terms, by the end of April, your business will be down $1,012,500 dollars. This is sort of the black hole to where all our bailout money is currently being applied... However, disregarding the "virtual" losses, your actual losses would be only the money spent on paying your employees, utilities, maintenance service contracts, and those costs charged to you by other banks. For you still have lien on those 1000 properties. At today's zero value, those liens are worthless. But if the economy ever takes off again, by tomorrow they could be worth $100,000,000 if one could find a sufficient number of buyers willing to purchase them at the price you paid.....

So all that mortgage companies simply need to do in order to sustain themselves for three months of no income, is to pay their expenses. And they could again pick up where they left off starting on the fourth month. After all, it does not help our overall economic problem if we lay off numbers of financial service workers, because we were helping the economy by canceling three months worth of mortgages.

The above example is based on estimates which show that twenty five percent of mortgages will continued to be paid through April.. However the boost of this economic impact would be minimized, if only those people in dire financial straits were only the ones given a grace period. Those others fully capable of continuing to pay, would find themselves penalized for having been good creditors and paying their full amounts on time.... Not fair.

If it is to work, the three month grace period must be applied across the economic strata .... covering everybody. Everyone, no matter how poor or how wealthy, needs this same privilege. Remember, our primary goal here is not to stop foreclosures; it is to jump start the economy. To tip the balance of our economy, we need every bit of money pumped back into our system. We especially need those still untouched by our failing economy, who can still afford to keep their mortgages current, to throw their cash into the economy and sweeten the pot.....

As we all heard during the 1930's, back then banks went on "holidays" for up to weeks at a time. None of those "holiday" banks ever threw in the towel during the time they were closed; however, had they remained opened, bank runs being made on them would have put them under. The same principal holds forth with our mortgage industry and financial institutions today. They will lose no money over their three month closings, but will instead gain the benefit of still being solvent three months from now; something which is doubtful if the dangerous current trends run unabated....

This plan has several major advantages, and a couple minor disadvantages. The major advantage can be dreamed of by every mortgage payer today. "Gee, if only we didn't have to pay the mortgage this month". This plan does not require Federally borrowed money like a stimulus package that someday will need to be paid back. This plan does not cause a single dollar to be lost to those businesses who lend money. This plan places a tremendous amount of spending money into the hands of purchasers within three months. The minor disadvantage will be determining who will pay for those employees who usually receive their income from these lending institutions....

The Federal Reserves estimates that this action will put 3.5 Trillion into our economy each month. There is no way federally funded mandates could match that level of impact. There is even perhaps some poetic justice in that since mortgage companies were the ones who first put the global economy into this mess, they should be the ones responsible for pulling us out......

Technically this action could be done very cheaply through the issuance of an Executive Order: stating that no part of the Justice Department will hear or prosecute any cases regarding any unpaid mortgages falling inside the three moratorium months of 2009. If there is no recourse in the Federal courts for not paying one's mortgage, then by de facto the moratorium is in place. For if you, the mortgage payee, are being pardoned by the Federal Government for not paying your mortgage...then why pay it?

In other alternative situations the same plan could also be passed by Congress, State Legislatures, etc, etc, by anyone who wanted to bask in the warm accolades of regular people....

The next item (much less interesting) is that of dropping interest rates to the floor. After the recession following 9/11, that same thing happened and the housing market took off... quite possibly to our detriment today.... In late December 08 the Federal Reserve dropped the interest rate on inter bank lending to half a point, and speculation was that that it may go to zero, or even negative during the next few months... Zero interest rate? As happened during the last time we had low rates, the purchase of homes became remarkably cheaper... In late December, the Fed released information confirming that a record number of applicants inquired that week about re-financing just after the news was announced....

This has possibilities, but it must have the support from other factors of our economy to be effective. Just cutting down the cost of building a business, the cost of buying large purchases on credit, the cost of taking on a bridge loans to cover a brief, rocky, financial moment that one finds himself, ..... can, if available, provide an incentive to switch money now lying dormant in a safe account, over to flipping a new business that may hopefully one day generate new fresh money towards the GNP.

However for it to work,... banks have to lend...

That openness towards lending did not happen during the previous Great Depression, and from what little evidence is available to be seen thus far, it appears that banks are loath to let money again slip beyond control of their fingers...

That fear revolves around the habit that banks have of "calling in a loan". When a bank lends money, it has the right to receive full payment if requested on demand. All banks lend to other banks. If one bank is in trouble needing cash, it calls in its loan. Unfortunately that poor bank holding the loan just called in, now has to ante up a considerable amount of cash rather quickly. Most likely, it will also call in its loans in order to pay off its loan that got called in earlier. The pyramid scheme fans out as each bank triggers two or three additional banks to call in their own loans as well.

A banks only defense in this scenario, is to have huge stocks of money available in cash, for those times when their neighbors call in their loans... Therefore banks are loath to lend out their reserves. If a bank puts most of its money back into the economy, jump starting it as quick as possible by investing in neighboring factories, production units, and houses, and automobiles,..... and then gets "THE CALL"..... it can't unload all those properties in time to prevent its going under.. But if it has cash, it simply says "here it is...." So one can rant, rave, and rail at banks for not lending out their reserves..... but it would be foolish for anyone to place a monetary bet upon any bank that would make the choice of being altruistic, over it's own survival...... Until the problem of calling in loans has been eliminated, credit will remain frozen.

(The problem can be quickly fixed by changing those rules regarding the "calling in of a loan"... most particular in its regard their "timing" or lead time, leading up to that act.) As an extreme example, changing the rules to allow a bank a full year to comply, would relieve much stress on any financial institution getting the call. Any bank given a year could figure out how to get liquidity to pay off that "call". In an area where every bank lends to every other bank, the threat of going under would be abated. Keeping money tied up in reserves, at 0 percent, is costly if one could otherwise get 10 or 11 percent upon it.... Remove this threat...and the credit markets rapidly open up.

Again this action can be done cheaply by an executive order aimed at the Federal Reserve, stating that over a certain period of time, a bank has up until one year from the date its loan is called, to ante up... The bank originally calling for the loan has no worries... it has a year.. The chain reaction of calling in loans is never begun. Banks no longer need more than the required reserves on hand and lending becomes easier because banks are in the business to make money too...... Or again a law regarding such could be passed by Congress, state legislature, etc, etc, or anybody else desirous of basking in the adulation of the public's citizenry.

(Although the "effectiveness of various tactics" will be written about in another chapter, the best option available today to initiate open credit, would be to issue a national Executive Order stating the obvious, and within it: installing an expiration or Sunset Date, by which it had to be passed and endorsed by another governing branch or legislative body if it were to continue further.)

So dropping the interest rate to zero, CAN put money into the hands of those purchasers who refinance existing loans, and CAN create new business opportunities since the cost of opening a factory will become much cheaper, if and only if, banks are given some way out of having to instantly pack up all their reserves and ship them out at a moment's notice .......

Finally the most popular idea leaked out by the initial transition team's encampment, was: creating a WPA to build massive public works funded by the Federal government. For those too young to remember, the former WPA was a Federal Program run like a business, but was funded with the taxpayer's money.... and not by the purchase of private stock.... The principal is simple.. If banks won't lend to start capital improvements, the the Federal Government will lend the money to itself (or a division thereof), and something at last will get started. During the last Great Depression, some examples of massive public works built include the planting of a wind break across the entire Great Plains, of building dams along the Tennessee River (TVA), as well as up and down the Colorado and Columbia Rivers... It also included building the Golden Gate, as well as the building of the then ultra modern Pennsylvania Turnpike across the Appalachians...

These local investments spur the economy in their respective areas. Concrete is needed, heavy machinery is needed, as well as are paid personnel. Those people then need to spend their paychecks and money enters the economy.

If one looks back to the last Great Depression, one sees that within the local areas, Public Works did jump start economies on a scale relevant perhaps to the size of a county or a township. But after the job was finished, the work moved away, a little further down the line perhaps, and the brief high level of economic activity was not sustained. As the extra workers move out, that area fell back into a recession. Only in a case like the Tennessee Valley Authority, where continuous activity lasted for decades, was any long term economic viability enhanced.

The added benefit was that we did get some great dams, which are then able to provide electricity over wide swaths of rural areas... or a turnpike... or a nuclear plant.... or a massive bridge....something of lasting value...

But proposing public works as a method to rebuild the economy, doesn't seem to pan out, based on historical evidence... Essentially the amount of public work that can be done at one time, is just too small to make a dent on the national economy. Building Hoover Dam does not relieve those living in the Hoovervilles of Indiana. Building the Golden Gate Bridge, does not assist those starving in St. Louis, the Gateway to the West. Another Bridge to Nowhere, helps very few people somewhere else....

And that is that is fallacy behind using public works to grow our economy. It's handsome bucket of water being thrown upon a blazing house. The silver lining of that program is that since we are we paying for unemployment anyway, this option provides a better return to our investment (again we will be using borrowed dollars to pay its way). Paying someone to reforest a clear-cut forest instead of watching Ellen DeGeneres on television, is arguably the better use of our tax dollars. Paying someone to demolish condemned city properties does more far more public good than seeing that money going to seed criminal activity.....

So the money spent towards unemployment, supplementing the welfare of those citizens out of work, could be better spent on Public Works with those same wages being applied to those same people who were underemployed. Again, an Executive Order directed towards the Department of Labor, could require that only those working in the service of their country (assuming other factors were not in play), would be eligible to receive future unemployment benefits. We would then scramble to figure how to accommodate that directive.

Review:

The four possibilities were:

A) Tax stimulus checks
B) 3 month moratorium on mortgages
C) Dropping the Fed's interest rate very low
D) Building Public Works

Although all have the propensity to help jump start our economy, the one having the greatest impact upon our economy in the shortest amount of time, ie putting the most money into the hands of purchasers, is Plan B: a 3 month moratorium on mortgages.

Chapter 2: Pay Some Type Of Compensation To Those Out Of Work.

kavips — Fri, 17 Apr 2009 15:04:54 EDT

Those without money,... can't buy much... kavips

During the thirties, it was acceptable that those thrown out of work were simply out of luck... Some lived, some died and if you were one of the unlucky ones, you had our sympathy, but not our resources... Those resources we saved for ourselves, because more sooner than later, if circumstances folded differently, we might find ourselves destitute along side of you...

Today our mentality is different, in part because during the past Great Depression, we figured out that leaving humanity alone, was more costly than giving them something to do.. Because of our earlier insolence, we all recognize that paying some compensation to those put out of work, is a national requirement.

What is the cost of unemployment?

I recently revisited that cost on a personal level when I forgot to eat for a day and then realized too late, that I was completely out of food; it was far too cold and windy that night to go shopping .. I decided to tough it out till daylight. As the night hours crawled by one by one, I reflected that it had been a long time since I was ever hungry. (I am not talking about the little two-hour-starve thing; it's the 36-hour-fast thing I'm talking about..) I asked myself to what extremes would I go after spending 4 weeks in the condition I was feeling by the end of that time?... Let's just say it changed my perspective a little.....

A) We need unemployment insurance; it is not a luxury.

B) Education and retraining for yesterday's economy is not the answer.

C) Tie the receipt of Unemployment Compensation to some type of "Service to America" platform.

Society can NOT afford the higher cost of having NO unemployment insurance. It can do without the crime, the black markets, and general malaise associated with very hungry people who have nothing to eat. We do not need to remake America in the image of the old Time's Square of the seventies..... We need to prevent that natural trend from occurring.

Currently only 37% of our unemployed are in receipt of benefits. Only 37%. The increase in working women, the prevalence of two-earner couples, and the reality of single working parents, is not reflected in most states’ Unemployment Insurance eligibility criteria, which fails to take the impact that family considerations — such as the need to care for a sick child or the collapse of child-care arrangements — can have on woman’s employment histories. In most states, workers who lose employment for such a reason and are trying to find a new job are denied unemployment benefits.

Unemployment only supplies 60% up to a certain level, of one's former compensation. Currently, unemployment is tagged to finding additional work. Today's unemployment checks are given out, but only after proof of looking-for-work is forthcoming. But how fair is that.... when and if there is no work to be found?

Back during the Great Depression, estimates show unemployment was as high as 25 percent. One out of four heads of households was not working. It became the duty of the other three, to make sure those did not starve and die. Shelters and soup kitchens were just one way of accomplishing that...

Today we hear discussion of our need for re-training. Training can most often be considered a scam proposed by those who make their money on "instruction." After all, what does training actually give to unemployed workers? A new title? Are they now considered to be among the "trained unemployed"? ..... Could the amount being spent on training, be better served to hire workers who actually "do something" lasting... like building a road that is sorely needed. Consider "that" a form of on-the-job training......

One version of unemployment benefits is titled Self Employment Benefits. These are paid to citizens who have lost their jobs and are trying to start a small business. To date, Delaware, Maine, Maryland, New Jersey, New York, Oregon and Pennsylvania have Self-Employment Assistance programs. Under these programs, States can pay a self-employed allowance, instead of regular unemployment insurance benefits, to help unemployed workers while they are establishing businesses and becoming self-employed. Participants receive weekly allowances while they are getting their businesses off the ground.

The problem is that if the economy is not moving, those businesses will fail as well. And then what? Will we have a glut of out-of-work business owners who have used up all their unemployment benefits? Now were the economy vibrant, this plan could provide much needed growth. It is a much better use of public money over that of paying someone to watch TV... But when there is a glut of under utilized nail parlors, how does adding one more help anyone?

Recently the Federal government extended the time to apply for unemployment benefits. If there is no work found during the first 26 weeks, what makes one think that 13 more will do the trick? Sooner or later one must come to the conclusion, that there is too little work to be found. We are paying ex workers to go on a journey to futility....

Review: here is what we have found so far.

We cannot afford "not" to pay our unemployed. The current system pays them a lot of money, and gets no return on our investment.

Answer?

Tie unemployment compensation to "serving America", similar to terms used in the reimbursement of college tuition to guarantee that every child had a right to higher education. Volunteers are in desperate supply, especially now that businesses cannot afford extra labor. Volunteering in a soup kitchen, would be worthy of unemployment compensation. Assisting a parental teacher's aide in a rowdy high school, would be worthy of unemployment compensation. Picking up litter along a highway, or city street, would be worthy of unemployment compensation. In the inner cities, keeping youth off the streets by organizing a basketball league, would be worthy of unemployment compensation.

In all, we are giving citizens the opportunity to give back some of what they've gotten,... back to "WE, the people".

In doing so, we have formed a more perfect union.... More often than not, we will receive more back... than we gave... After all, everyone needs to be needed. There is no better cause than putting one's talents to good use for our nation, especially in its dire time of need.

Stories of the last Great Depression are fraught with glimpses of how time stood still. There was no one to pay for picking up litter, so it never was.. There was no one to pay for cutting grass along the highways, so it was left alone. Other civilizations have used their populations to achieve great works. Recently, all eyes should turn to China, who as late as 20 years ago, was just a few years past Mao.... But people built dams for food. People planted hillsides for a daily bowl of rice. Whatever it took to survive, people accepted as a necessity. But, if unemployment progresses to 25%, with only 1 out of every 4 people still working, we will need someway of keeping that one alive, while at the same time providing an opportunity for them to live with dignity. I can think of a no better way to live than doing service for one's country.

With this economic crises we have an opportunity to realign America. We sort of steered ourselves down the wrong path by worshiping our markets a little too much.. While chasing the dollars across our oceans, we sort of forgot that volunteering our time over here was important also. We can relearn that lesson.

In essence, to really make America a better place, we need to tie unemployment benefits with service being done in the name of America... Bringing proof of one's volunteerism, instead of one's job searches, would benefit America as a whole. As we shrink our state and national budgets over these next ten years, we will need to find a way to continue those services upon which we have grown so dependent. The best way to do both, (shrink the cost, grow the service) is to use volunteers. Since we can't have volunteers starve or freeze, we will need to pay them a little so they can sustain themselves for their food and shelter... When work returns, we know where to find new workers....

Whereas extending unemployment benefits over longer gaps of time, retraining the American work force, and tying unemployment to the service of one's country, all act to mitigate the pain our upcoming Great Depression will bring, the latter,.... linking unemployment compensation to service volunteering for our country, will provide the greatest return to America for all the money it invests into its out-of-work labor force......

Chapter 3: Rebuilding Our Infrastructure, (Green Energy Included).

kavips — Fri, 17 Apr 2009 15:02:06 EDT

A bridge to the future, if collapsed, takes you no where... --kavips

This chapter looks at rebuilding our infrastructure. We have highway problems, energy problems, educational problems, as well as health problems, environmental problems, and social problems. Can rebuilding our infrastructure be a tool to begin the mending process?

Up to now very little has been spent on maintaining our highways. Most highway money was earmarked for new growth.. It was as if no one gave consideration of the fact that maintenance of what we already had up and running was a cost that needed budgeted in.. After all, what political points are ever given for repairing a road before it goes bad? (Damn it, why are they tearing up good highway, costing me twenty five minutes in each direction?) But with the August 1, 2007 collapse of the Interstate 35 Bridge in Minneapolis, we see what happens when highway infrastructure is ignored.

For example in the United States alone, 25% of our bridges are deficient. In Delaware, 15.4 % of our bridges are either functionally or structurally deficient, which is actually good when compared to our fellow small state Rhode Island with 52.9% of its bridges deficient. As one travels back and forth, one crosses an unknown number of tiny bridges; of these, one out of four is deficient. How would you like to be on the I 95 bridge across the Susquehanna... when its time came to fall?..... or perhaps driving across the Chesapeake Bay Bridge between Kent Island and Annapolis? Thinking "one out of four" may raise your apprehension rate the next time you find yourself traveling unknowingly across a potential deathtrap...

The need to improve our infrastructure is obviously there. So if we have the labor available, how will we pay for the construction and repairs with our treasury bottomed out?

That depends on whether bonds still had any worth, meaning whether or not anyone still had any interest in buying them... Normally bonds are sold at a low interest rate, and the money taken in is used for construction. The notes are paid back in regular payments. But if there is no demand for, or more money out there with which to buy the notes, who will fund the infrastructure investment?

Today the bottom line is that the money will have to come from the Treasury. Being broke, that also means the Treasury will no choice but to print more money in order to accommodate the economy's need. As more money starts chasing fewer goods, inflation looks at us dead center down it's barrel. Unfortunately we are in such dire straits, that we have no choice but risk the chance of inflation just to keep the next Great Depression at bay....

The same scenario applies to our efforts to revamp our educational system. Now estimated to require between 45 to 50 billion (how much was AIG's bailout?) the infrastructure of our schools systems faces the same challenge of acquiring minimum funding, as does that of rebuilding our highway system.. Up until August of this year it could still have been done. Now due to insufficient funds, this accomplishment is unlikely. But if we choose to go forward, we will have to do so again funded by printed money with inflation drawing another bead upon the target on our own purchasing power..

Even today, there is enough work to employ every man, woman and child in America if we can find the resources to pay for them doing so... Work such as environmentally cleaning up Superfund Sites, energetically laying new transmission lines, socially integrating our square pegs into round holes, educationally teaching problem readers to become literate, or simply maintaining hospice care over those citizens who cannot survive long enough to see America turn its corner; yes, work can be found...

But the underlying question still remains as to how we will be able to fund the privilege of keeping America employed... and at whose expense? If we were unable to solve these problems during the past 8 years of plenty, how will we deal with them during a time of shortage?

Fortunately, we are not the first group of people in our lifetimes to rebuild our world around us... Three examples of what can be accomplished, are found in three post war states who after war's end, found themselves under American influence. That would be Germany, Japan, and South Korea. These are the models we need to turn to. Someway and somehow they bounced back from complete devastation to becoming the the second, third, and fourteenth largest economies behind that of the United States...

At war's end, there were very poor resources to spread around. Everything possible needed fixed at once. But with a small amount of seed money provided by the Marshall plan, a major currency adjustment, and a release from price controls, the German population pulled themselves up and today have roaring economies better than do any of our allies of that past conflict. (It doesn't seem fair.)

History shows us that for two years after the war, while post war punitive policies were kept in place, all of the occupied countries' economies decreased. The Soviet sector opted to maintain those policies and their economy continued to suffer accordingly until German Reunification in 1990. However in the western Allied sector, starting in 1948 with the abolition of price controls and most post war rationing, along with the devaluation of their currency designed to shrink the amount (by 93% contraction) of the money in circulation, their economy took off; lost days decreased by half, and industrial production climbed within six months by 50%. Both nations were blessed with the post war abundance of skilled cheap labor; therefore both nations were able to increase the flow of money into and around their country.

Rising to the challenge imposed upon them by history, all three countries had able leadership which was effective in communicating this to each countries' populations: ... that their time and effort were to be properly considered as an investment. Their rewards would not be reaped immediately, ...but would someday be magnificent. Their leadership was also effective in communicating that timing was critical. If they did not begin immediately... their nation's dreams would never materialize. It was their competent leadership that marshaled the populations of both WWII nations back to work "on the cheap" and that.... the bottom line, is how both counties bounced back. Not dictatorially, but economically. One should note that both of the two occupied economies fared much better than our Allies, who received far more Marshall Plan aid than did the conquered nations, and who did not have to pay for war repatriations as did both of the war-torn countries.

From here I pulled this little piece of history, showing the progressiveness that forced the German economy forward.....

Colonel:“How dare you relax our rationing system, when there is a widespread food shortage?”

Erhard:“But, Herr Oberst. I have not relaxed rationing; I have abolished it! Henceforth, the only rationing ticket the people will need will be the deutschemark. And they will work hard to get these deutschemarks, just wait and see.”

That they did.

Obviously sitting in our armchairs looking forward, we too understand that we will face the specter of inflation. It MUST come with the copious amounts of money we are currently and anticipated soon to be printing. However as does any nation in a war, our country does what is needed. Currently and just like it was after WWII, the US right now is the only global entity strong enough to expand its money supply fast enough to put most of its citizens back to work. As we begin earning extra spendable income, our demand increases; when that demand pushes up prices, more and more entrepreneurs race to fill in the vacuum of goods... bringing them back down. Greed is good.

As for actual rebuilding of infrastructure, postwar Japan offers a slightly different model. In Japan we meshed the government, banking system, and large industrial players to fund, construct, and grow their infrastructure during the sixties. The local banks, backed by the government of Japan, used a system of overloaning. This policy is one which the Bank of Japan guarantees all loans issued by city banks to their industrial conglomerates. Because there was a shortage of capital in Japan at the time, industrial conglomerates borrowed beyond their capacity to repay, often beyond their own net worth, thereby causing city banks in turn to over borrow from the Bank of Japan. This gave the national Bank of Japan complete control over all dependent local banks until the loans were repaid.

The primary difference between the Japan of then and America today, is that today, the money is still not being lent out by those banks receiving Federal assistance. Instead, today's over loaning is being wasted on the buying up of other banks; today that mass infusion of capital is being used to consolidate the financial industry, instead of financing large projects that actually put citizens to work, and in turn funnel money back through the economy.

The question remains. Does rebuilding our infrastructure get us back on our feet?

Yes and no. The economic impact on the local level at the location where the federally funded project is being built, is huge. But it is a localized effect. For an economic turnaround to be effective, infrastructure building must occur simultaneously in almost every town or village across the United States. If funded solely by the federal government, that significant cost would appear prohibitive. But if instead of being funded solely by the Federal Government, it is done as did the Japanese during their infrastructural rebuild, (where all local banks simultaneously financed local projects close to their locations), much more capital becomes available. If we place our bets on the option that local banks WILL lend out the money, if we guarantee that they lose none of the amount lent out,.... then that outcome could start some infrastructure development in the very near future somewhere near every community's small bank, no matter where it may be located.

So if as a nation, we choose this plan, and we attempt the Japanese-tried approach, the question next arises over which infrastructural improvements will return the largest investment? The consensus seems to be that Energy, Education, and Technological advancement lead the pack.

As we now all know, even during prosperous times our nation gives up a large percentage of its income to other overseas nations just for oil. By simply keeping that dollar amount in the United States we could provide our economy a substantial boost. Furthermore, manufacturing and exporting new technology which help frees the rest of the world from their dependence on oil, would certainly assist us in turning the trade balance back in our favor. Both of these lines of thought converge to point out this: the increase of our energy independency could become the primary viaduct which could bring America back into prominence.

As for increasing our energy independency, there are several options for doing so. One, is to create new sources. Here is one startling fact: there is enough potential wind power in North Dakota alone to cover 25% of America's energy needs. The problem is getting it to where it needs to be used. Building transmission lines from America's heartland out to its extremities, where its largest users are, should be a first priority. For one, it actually uses the free market plan and opens markets to a cheaper supplier of that required product. Two, transmission costs are a significant portion of the energy costs we pay for electrical energy today. Three, poorly outdated transmission grids eat up a lot of energy that could instead be used to power America.

Likewise building transmission lines from our local shores to major metropolitan areas, provides those city areas with cheaper electricity from off shore wind, thereby increasing the likelihood that more wind power generating companies will set up off-shore. The larger the wind farms are off shore, the better our economy will weather that upcoming Depression that appears to be looming off our horizon... And if hydrogen is one day destined to become our replacement fuel, then locating their manufacturing plants in close proximity to offshore wind farms, in order to capitalize on a wind farm's free excess energy during non peak hours..... could certainly help build an industrial base to back up the tourist economies of rural shoreline counties.,.

Directly related to the new technology of wind power, would be the need to construct electrical storage facilities in areas that have no jobs. Western Pennsylvania and West Virginia would be ideal localities to build closed circuit water generators that use free excess wind power during non-peak times to pump water up a hill to reservoirs on top, from which water can then be released during peak times, flowing downhill turning a series of giant generators as it falls to the valley floor. These massive projects would put large numbers of Americans to work in those areas desperately needing new development.

But these three investment strategies are all dependent on the knowledge that wind driven energy will be a big player in the years to come. No one will make such an major investment in a climate of doubt. The Federal government over the next few years ... has to make that clear.

For other hard hit areas, an investment in solar power out in America's Southwest can do the same. A conglomerate of local banks issuing out loans, guaranteed by the Federal Banking System, should have sufficient resources necessary to begin the immediate construction of a series of large solar farms in that area. With such an investment to attract large numbers of employees to that area hardest hit by the housing crises, local banks could with the Federal bank's support., begin paying workers who in turn would help out the local banks by buying back some of those foreclosed mortgages at market prices...

But unquestionably, the largest saving can be made by simply conserving more energy in our homes and businesses. Just re-insulating every home in America, can save the cost of its installation within a year. According to the Department of Energy, re-insulating a home can save between 5% and 22% of its energy costs per year. At their estimated energy cost of $1500 a year (seems low, doesn't it), the range would be from $75 dollars to $300 dollars a year. So paying someone a bounty of $75 dollars for each house, just to infra-red, then re-caulk it's leaky windows and insulate it's doors, would see its return within one year on every dwelling visited. Paying someone to go through a city's public housing could save that city government tremendous amounts of money which could be better spent putting its citizens back to work.

Educational infrastructure is likewise needed. Our nation's schools for the most part, have not been updated on a grand scale since they were originally built for the influx of baby boomers ... What is more important than structural additions to existing buildings, is a revamping of the educational process itself.

America needs to regain their technological prowess... Our educational system ranks behind most of Europe and civilized Asia. One Duke study concluded that 137,437 engineering graduated in the United States, compared to 112,000 for India and 351,537 for China. Of course the quality of those foreign engineers are open to debate. But still, with lopsided numbers like that, it is obvious that over time.... we lose the technological war. Today... whoever is driving the global need for technology... drives the global economy.

Putting additional parents or motivators inside of class rooms, increasing allocations for science supplies (simply dropping sodium into water turns most students on to science as well as instantly explains the clarity of the periodic table), and increasing the social status of the "geeks" in teenage classrooms, are just some of the ways we can rebuild our educational infrastructural needs, without large investments of cash... Where we most often complain that the educational system is broken and in dire need of fixing, at the core of the problem is broken down people. Whether it is administrators, teachers, school board members, parents, or the students themselves, what we have throughout our education system is a group of talented, but leaderless individuals. All are spinning their wheels independently in their effort of trying to find some type of traction in improving education. Often within the same schools, different partners are spinning in opposite ways.

What American education needs is a grand goal, one that is set nationally and bought into by all of its people. Once again, America needs to be challenged. At its forefront it needs a leader capable and willing to stake his reputation on meeting and achieving that goal.. And most importantly, that challenge needs to me made without any financial strings attached. You know: the usual "we need to invest $$$ in .......". Instead, what is needed by our incoming leadership is to voice a measurable goal such as this one for example: that says by 2015 we will as a nation, turn out as many engineers as does China..... (Goal reaching against a competitor worked for reaching the moon). Perhaps to achieve it, some additional funding may be necessary. But what is more important, is that is sends a real signal to students that fun and games as they have been portrayed on children's TV, can no longer be tolerated within our high schools. Every young person now has the survivalist duty to apply themselves to the best of their ability, for the honor of their country in whatever the direction their talents lead them... (With proper leadership, this can be done fairly cheaply: it takes just one big speech.)

The long term return on this cheap investment is that by 2020, our engineers should be in the field working at top notch organizations, benefit them and us from their training and expertise.... The longer we wait... the further behind China and India we find ourselves... We are already talking twelve years from now before we can get any return on both ours, and our student's investment....

Likewise, tying in with improvement of our educational output, is our need to advance ourselves further along the road of technological innovation, ie. creating new patients. For which ever nation builds the most savvy technical gadgets, that is the country from whom all others will want to buy...

But in today's economical climate one must realize that a risky investment on some new technological device, untested in the market place, will have difficulty finding financiers. Once again, the Federal government, if it is spending its resources elsewhere, has the option of only printing more money to pay for this investment, assuming that private lenders are too scared to lend. Therefore as mentioned above, as in the post-WWII-Japanese model where the small city banks overloan to businesses and corporations allowing them to invest in research and development, if these loans are themselves guaranteed by the national bank, private lending can fulfill the need.

A very strong incentive to promote new research and development by corporations, would be to allow all such expenses devoted to the creation of new products, to become tax deductible under the newer higher rates that will be forthcoming shortly. Every bit of money spent on research and development, is our nation's best investment. Innovative new products lead to the quickest economic turnaround as those new developed ideas soon become commercially viable...

Other areas where infrastructure can also be propped up by an infusion of small loans made by city banks which are then guaranteed by the Federal Reserve, are in the areas of environmental protection, health care, social services. Western forest fire fighting companies, environmental detoxification companies, and tree reforestation companies, could begin putting people to work.

It could work like this. A company such as Guardian, on call for disaster, receives a payroll loan from a small bank guaranteed by the Federal Government to keep itself afloat until money comes in from charging an oil tanking firm for the mess they made... Most of that loan money is used to buy necessary additional equipment, which puts someone to work in the manufacturing plant where that piece of equipment came ..... As work eventually comes in, the Federally guaranteed loan is paid back to banks... In this and most cases, no direct Federal investment is required. They just stand behind the guarantee.

In the health care industry, private companies providing hospice care, watching over psychiatric patients, creating new MRI's, handling billing requests and follow up from insurance claims, can now receive a private loan from a small bank guaranteed by the Federal Government to carry them over until their money returns. Needing new equipment keeps a job at the plant where that piece was manufactured...

Companies specializing in assisting the poor, handicapped, impoverished, hungry, homeless, can also stay afloat by these private loans over lent by their banks, but guaranteed by the Federal Government. When the money returns from their clients, the loans are paid off.

In each of these areas, existing goods and services are maintained. The businesses don't fold. Here is a different way of looking at it. This Keynesian jolt of economic activity is metaphorically like starting a heart of a human being temporarily stopped in cardiac arrest. At that time, all the systems are in place to work.... the heart just needs pressed to get started..... Our economy is like that. Inattention to the core of our economic problem, which is money not flowing out of banks, will lead to the same result to us as it would to a patient who does not get his heart restarted....

So this chapter can be summed up this way. The Federal Reserve is given responsibility for making sure that all projects having a viable chance of success, receive funding from, and eventually pay back... the small local banks making those loans. The Fed just guarantees the loans won't fail....

Those out going loans should be focused on projects giving us our biggest bang for our money. Those areas providing the best return on their investment, are in the areas of energy, education, and technological advancement......

Instead of direct investment, the use of Federal guarantees in these three areas, coupled with the Federal Reserve's monitoring the effects of inflation, are one way our nation can capitalize on its current hardship, and pull itself out through our effort, grit, and tenacity....

Chapter 4: Re-establish Some Type Of Manufacturing Base Back Inside This Country.

kavips — Fri, 17 Apr 2009 15:00:16 EDT

He said build something; I said with what?-- kavips

Some of you remember the "giant sucking sound"?

Ross Perot, Reform Party candidate for the US President in 1992, coined the term during one debate (4:45) to represent how dropping protective tariffs for NAFTA... would suck our manufacturing jobs to undeveloped nations south of our border...

Today we see evidence that it was true. Although China, India, and Southeast Asia are contenders for stealing our manufacturing base as well.

There is no real industrial manufacturing base left in the United States, which is one of the reasons that bailing out our car manufacturers has become a national emergency. At the exact moment when we need a manufacturing base to prime the pump of our economy, it is missing. Gone. It is not there.

The Free Trade agreements do well for our nation's consumers; they bode ill for those working at high wages. I remember buying the cheapest shovel I could find for $25 dollars back in '92. Last summer the same brand was still on the shelf for $25 dollars, but the one I bought cost me $4. I figured I could buy 6 replacements before breaking even.... My choice gave me $21 dollars to spend on other items.... Free Trade works for American consumers...

But for someone costing more than $1 a day, for someone with pension costs, health insurance costs, and vacation costs, free trade is something to fear. For the sucking sound of job loss continues up until the point occurs where the cost of doing business here, drops down to meet the climbing rate of the cost of doing business elsewhere....... At $18 dollars an hour here, and $1 dollar an hour there, when both settle out around $9 the flow of jobs is abated.

But you can't force a company to not make money. If it gets so bad that they can't stay in business, they have every reason to shut their doors.... Even if WE were able to close off the imports of all products made more cheaply elsewhere than domestically...... we would be paying much more than necessary for those products we bought. Most of us would choose to go without that unnecessary expense, before paying what we considered exorbitantly high prices.

Furthermore, closing down imports would turn us into a trade island. Other nation's $4 shovels would continue to be snapped up on the world market, while we sat on a huge inventory of $25 dollar ones.... As soon as our nation's market was saturated, its one shovel plant would have to close, (provided no bailout was forthcoming to keep it solvent and afloat....) They could not sell any more of what they had....

I mentioned in a previous chapter that it was lower labor costs which were responsible for propelling Germany, Japan, and South Korea out of their economic paralysis following the ends of wars. Writing on the wall says that for us to survive... we probably will have to do the same.

Just having health care removed from corporate responsibility, could significantly impact how this is done. If the burden of providing huge sums for medical insurance was suddenly lifted off of business' shoulders, its cost of doing business in the US would drop significantly without touching the amount paid out in wages.

So what would it take to get manufacturing jobs to come back to the United States of America.

Bottom line....the entire process from raw materials to final delivery, needs to be cheaper here ..... than somewhere else...

That cheapness doesn't mean we are forced to sacrifice wages... After all, wages are the fuel that drives our economy. After all, wages are what buys those goods and services which America makes. After all large scale cutting-back on wages, cuts back on the money supply that buys what we produce.... Cutting wages is the final resort: our very last line of defense. It is in other areas where we need to look if we wish to get our nation to bypass this economic bump in the road...

One different and novel method would be to shorten the accounting rule on how one claims depreciation. One of the reasons that trading in mortgage securities was so profitable and lucrative was because the full cost of buying those securities was immediately deducted from the purchased amount creating an expense that matched the asset. However upon buying a piece of equipment under depreciation, a large amount of capital is required up front... and is not costed out except in little pieces over a very long time.

Building a business is capital intensive. Buying securities ... was not. Considering the global shortage of capital right now, changing the rules for even a short time, could be considered to be sort of a tax break. If banks were lending (those loans guaranteed by the Federal Reserve), and.... purchases made this year could be written off totally... meaning no taxes would be paid on that amount.... this would be the goldmine year for a business to expand, buy, update, renovate, modernize, and become more efficient. And if each one of every businesses started ordering materials, .....well, you see what that would do to our economy.......

Since a business will be carrying a lot of expenditures this year, the chances are that their tax payment will be minimal. That does not do well for our nation's Treasury... we sorely need that money... but, if one waits long enough... upon the following year, all those new pieces of equipment will have been completely depreciated, so that when the rules return to normal, the profit below the depreciation line is higher than it would have been had we left everything alone! And the Fed's taxable portion of that amount, would be higher in its dollar amount, even though its marginal rate did not change. The same boost in more taxable dollars, would occur each year up until that time when the equipment would have finished its cycle of depreciation. Basically for the Federal treasury, it is the same principle as having a business skip a monthly mortgage payment, by agreeing to pay a token amount more each month after that grace period to achieve balance.

Another concept is to change our definition of what constitutes manufacturing... The old days are gone, thanks to technology. If one looks at our assembly lines today, one does not see a myriad of men running around at breakneck speed to keep up with the assembly line... Instead one sees (in the words of Robert Reich) "a lot of numerically- controlled machine tools and robots, and a few technicians sitting behind computer consoles. The old-style assembly line factory worker is going the way of the bank teller, telephone operator, and service-station attendant."

"But there's a different way to think about manufacturing, and here we're doing much better. Take a close look at any manufactured item -- a pen, a cup, a car, a dress -- and see who's actually earning what portion of its purchase price. Much of it goes to Americans, even if the factory that made it is located in Asia. More and more of any item's value is going to researchers and designers, engineers, entrepreneurs, marketers, advertisers, distributors, bankers, lawyers, wholesalers, retailers. None of them is considered a manufacturing worker, but they are the future of manufacturing. " a different way to think about manufacturing, and here we're doing much better."

"The loss of blue-collar manufacturing jobs is a huge problem for America. That's because many young people with only high school degrees no longer have access to middle-class wages. But that problem, which has been growing for years, won't be solved by an Assistant Secretary for Manufacturing or any get- tough trade policy. To solve it we need good schools, ready access to technical skills and community colleges, and companies that continuously retrain and upgrade their workforce." Robert Reich 2003.

Robots are here to stay. What is needed to maintain them, is an educated workforce that can design them, program them, maintain them, market them, and sell them.... Education puts higher costing jobs back on the family's table. If America is to compete, then we need to be the ones making the most technologically advanced pieces of machinery that are bought by technicians from other countries... We don't want our workers competing for $1 an hour jobs, yet we need those products which are cheaply made so we don't have to spend prodigious amounts of our income on simple necessities. We waste a lot of time in today's schools. Currently Delaware schools lose 1 month every year talking up Black History month. We need to start asking hard questions on how that helps America compete against someone from India or China? It doesn't? One example of where our priorities are wrong, and we know it, but we do it anyway.

If one asks Americans whether we need more manufacturing, the choice is overwhelming.... In one unscientific poll, 99.13% said they would be willing to pay more for a product if it was made in America. The unscientific nature of that poll is suggested by the lack of determination of just "how much" those Americans would be willing to pay over the cost of a foreign import.... As in that true story about Lowe's $25 dollar shovel... are they willing to pay 600% more? If you remember ... this one shopper wasn't... He figured the could get six shovels for the price of one, and bet that his shovel would hold up well against those odds. (He was right too, by the way).

Another traditional way to protect local manufacturing jobs, would be to forcefully devalue our currency. If we artificially keep our currency at a lower rate per exchange with other nations as does China, our products, even if costing the same to produce, will be cheaper to buy... Again this would be a short term solution, since as our economy began to grow due to an increase of factory orders, our currency would gain value and then rise.

The downside is that it would make traveling through Europe expensive, but that would be a small price to pay for not having the Great Depression at our doorstep. A more significant negative would be that the global economy would prefer to peg their prices upon the Euro, and the once almighty America dollar, would fall quickly out of favor...

Speaking of traveling, the high fuel prices paid last summer point to another element as to why manufacturers would want to return to America. Keep in mind that many manufacturing jobs went offshore for cheaper labor. The downside of doing so is that one must pay to transport the product back here to market. With the influx of $4.33 dollars for a gallon of gas, the cost of getting foreign products into stores, climbed rather significantly. At some point it will be cheaper to again build in America and pay the American rate, instead of building cheaply offshore and then giving back the savings to those responsible for transporting ones product back to our shores to sell.... If a fuel tax is levied as has been discussed, it could turn America into a land of new manufacturing opportunities. The less miles traveled... the lower the cost that would be incurred.

In the same vein, the imposition of Carbon taxes would bring manufacturing back to America. If America imposes Carbon taxes and China does not, then all those Chinese products being imported are subject to carbon tax tariffs making them too expensive and unmarketable on these shores. Carbon taxes especially when coupled with high energy costs, make manufacturing closer to home, the cheaper alternative.

Cheap energy can really bring American manufacturing back onto these shores. That energy would be wind at 2.3 cents per kilowatt/hour, being made with free fuel turning the rotors of 7MW generators perched on tall towers dotted across America. Pushing forward with subsidies to initiate the building large wind farms, would be advantageous in not only putting workers to work on building the towers as well as installing the rotors, but also in lowering our energy costs so that any company moving here would still do better than it's competitor languishing oversees.

Some say our brand new baby boom may bring jobs back to America. In 2007 America broke its record for the most births per year. That last record had held from 1957. With a workforce growing by 4,300,000 persons per year, and China's one baby policy still in effect, our labor pool may appear more attractive 18 years into the future. This may not sound as far fetched as one would initially think. Most business decisions are sketched out over a fifteen year time frame... which means in most better run companies today, some employee has already started the research that will ultimately become the foundation of the plan... The idea is to get companies to reinvest here... not elsewhere. Grand trends that happen in our future can be a valid part of convincing someone to open an American manufacturing plant....

Likewise tougher and better American regulation can return manufacturing back to America. That may not make sense to anyone who has not done business in third world environments, where capriciousness blows with the wind. One of the classic blunders invested in the third world is the huge oil investment made in the Niger delta, now rendered cost prohibitive by the actions of local guerrillas. Another occurred last winter, when toy manufactures suffered significant losses because toys contained lead. And it was last year when animal enthusiasts bought everything American so that their pets would not keel over dead? In an arena where paying off a string of corrupt politicians is considered just a cost of doing business, the uncertainty of knowing just how long those politicians will last, has firms thinking again about the stability of doing business on American shores... RegalWare. Inc has brought back all of its plastic manufacturing back to Kewaskum, Wisconsin. As their CEO Jeffery Reigle states:

About three years ago, the company, with the guidance of consultants TBM, started evaluating its operations to become more efficient. A particular concern was how long it was taking to deliver cookware to customers. The overseas manufacturers emerged as a key bottleneck. Since the company brought production home earlier this year, delivery times to one major customer, Reigle says, have gone from 30 to 60 days to as little as 24 to 48 hours.

Even if Regal Ware's prices are 8% to 10% higher than buying direct from China, the its cash flow from Regal Ware products has increased 10% because the seller can turn over inventory more quickly.

Other pressures that motivate a manufacturer (or outsourced work) to move their manufacturing back from overseas: 1) bad experience with foreign vendors, partners, suppliers, local government, employees, 2) updated product portfolios and the pursuit of short lead-time or customization, 3) good utilization of automation, 4) overheated competition and lack of patient protection from improving foreign competitors, and 5) finding the made-in-USA label sells really well overseas. Not to mention liability issues where shoddy work, or tainted raw materials can upon being discovered, totally disrupt normal business flow.

The overall rising costs in China, from wages to taxes and to utilities, are definitely in the spotlight. American businesses may have realized through the years, from observing work transfer first to Mexico and then to Asia, that no country will be low-cost forever. Low cost is not everything. Consistency and trust in the quality also considerations a consumer factors in when making a purchasing decision. Tightening our quality standards, our environmental regulations, and stressing our attention to detail, will have the effect of increasing the value of the label "Made in America" That label is already the one preferred by wealthy Chinese who like us, have care and concerns for their children as well... Knowing how their countrymen sometimes operate, they prefer American.

So far missing in this analysis is all mention of imposing tariffs on imports for any reason. Pat Buchanan has been making the argument to stem free trade for years.

To date one of the more interesting aspects, is his distinction between how foreign trade works with VAT taxes and against corporate taxes... VAT (Value Added Tax) are used by almost every civilized state other than us. American's have held off because of the huge populist sentiment that permeates their politics. (VAT's being a consumer tax, are regressive). The VAT works on this principal: at each step of a manufacturing process, just the value added ... is taxed. In America, when one buys a bag of flour on sale at $2 dollars a pound, and assuming a 6% sales tax, one pays 12 cents additional in sales tax. In Europe, Japan, and other industrialized nations, each step is taxed and the consumer pays the final price posted, Over there the fuel, seed, and fertilizer used in the growing of the wheat is taxed. When harvested, the silo operator taxes the farmer, who in turn has the taxes paid on his raw materials, deducted from the amount he is called to pay. The regional distributor taxes the silo operator, who in turn deducts the amount of tax he paid to receive each farmers wheat. The mill operator tacks on his charge which is paid for by the regional distributor, and when selling the product to a distributor, he credits the amount he paid... and so it goes right up to the last person to sell you the bag of flour.. Each entity buys the product with the tax attached, attaches their tax and gets credit for the tax they paid when they purchased their raw material. That way, each entity is taxed only on the value they added to the product.

Since just my telling of it appears so complicated, one can get an idea of how keeping track of every step in the process, must run tax agencies bonkers. Instead of trimming the IRS, we would be growing it by leaps and bounds. Which is why in frugal America... VAT's have not yet been moved out of any committee....

The bright side is that this amount replaces corporate income taxes: zero corporate income tax. The downer is that we would be paying $2.12 for our flour .... before a state even had a chance to tack on their 6% sales tax. Together, we would be paying a 12.36% tax on all products. Your $150 grocery bill would cost $168.54. Whereas that seems like a lot to Delaware citizens who are used to no sales tax, to those in other states already immune to a 6% sales tax, the difference would be only an additional $9.54 dollars.. The average American would be paying roughly per month, four times that amount on groceries or $38.16 for the privilege of doing away with corporate income taxes...

But... and here is the argument when applied to free trade....

Foreign cars arriving here, have their portion of the VAT's deducted by their home corporations. We, without a VAT, must pay the full amount of the VAT expected in foreign countries, when we drop our cars off there. Roughly a 15% charge is added to the purchase price of any American car in a VAT country, while they receive a 15% credit for selling cars in ours... It is hard for American cars to compete as imports.

Perhaps we could recognize this constraint being placed on what is now, ... the taxpayer's car company, and use this opportunity to initiate a VAT solely on the car manufacturing sector of our economy to see whether or not its principal holds up under actual international trade. The worst case scenario is that American cars may cost us 15% more, and the best case is that US manufacturing plants go into full production due to the overseas high demand of affordable "American quality" vehicles....

Finally, we come to the heavy hitter part of the intellectual argument. If we are talking about changing import taxes, what about tariffs?

Tariffs limit free trade. How? Tariffs make imports more expensive, thereby making domestically produced products cheaper by comparison. Tariffs become a means of keeping prices higher for all Americans thereby enabling American companies to remain solvent as well as increase their profit margins. Tariffs once imposed, cause retaliatory tariffs against us which shut out our imports from entering new markets, causing plant shutdowns and layoffs.

Protectionist tariffs are often blamed for the increase in the severity of the Great Depression which occurred after the passage of the Smoot Hawley Act of 1930. Intended to protect America businesses and force up prices by limiting cheaper foreign competition, those companies protected went under, because no one bought any of their higher priced goods. Imports plunged 66% from US$4.4 billion (1929) to US$1.5 billion (1933), and exports fell 61% from US$5.4 billion to US$2.1 billion, both drops far more than the 50% fall in the GDP.

It did little to protect America jobs. Unemployment was at 7.8% in 1930 when the Smoot-Hawley tariff was passed, but it jumped to 16.3% in 1931, 24.9% in 1932, and 25.1% in 1933.

Today, one cannot help but to invoke the image of Ronald Reagan when discussing "Free Trade". Above anyone, he is the person responsible for bringing that term into modern consciousness. However, even the harbinger of free trade was quick to slap tariff duties on "motorcycles over 7 liters" to protect Harley Davidson from going under.

The Cato Foundation was quick to criticize this action. In a policy piece titled "Taking America For A Ride" they were quick to point out the economic hardship facing America. Concluding that:

"the new tariff will unambiguously prove to be a setback for the American economy. ITC specialists predict that the tariff hike will raise prices 10 percent the first year. Other officials believe that the price increase might be as high as 17 percent. The ITC estimated an increase of 12.5 percent for the second year."

They went on to predict that 20,000 less motorcycles would be sold the first two years, with an increase of 8,000 to 10,000 Harley's being sold over the same period...

But they were wrong. Initially the goal was to jump the current tariff of 4.4 percent to 49.4 percent and keep it there for a year; lower the rate to 39.4 percent in the second year, to 24.4 percent in the third year, to 19.4 percent in the fourth year, and to 14.4 percent in the fifth year. After the fifth year the tariff is to return to 4.4 percent. During the amendment process lines were added that allowed numbers of BMW's, Italian, and English manufacturers to slip through unaffected. The Japanese were given the same amount as were the other foreign bikes in without tariffs, but... due to the size of their market share, a large percentage of their imports were affected.

Bottom line: Harley Davidson is still around today. They would not have been had this tariff not been imposed. Harley Davidson took this time to retool, refinance, and modernize their brand, becoming a better company for it. Able to make better motorcycles, their market share increased to make them enough profit allowing them to call for the removal of the tariff a year earlier than planned.

Furthermore, solely because of the tariff, two Japanese companies, Honda and Kawasaki increased production at their American plants since they were not affected by the tariffs, in turn providing additional work for American workers.

So why was one tariff a success and the other an abysmal failure? The difference is scale. The Harley Davidson tariff was limited to Japanese manufacturers who used their protected high prices at home to subsidize dumping into the America market, which ultimately drove down motorcycle prices so low that Harley Davidson was unable to keep up. The tariff was limited to five years, and designed with a specific purpose: equalize the playing field. It was not done to protect American workers (they were few in number); it was not done to keep a lazy and insolvent company afloat forever; it was done to allow the free market to work. Now, every time a "hog" pulls alongside of you, you can thank Ronald Reagan.

Protectionism ( the imposition of trade barriers) has its purpose. With today's economy one should expect to see and hear labor unions clamoring for more and more "protection". It's a plea that is hard to resist. After all, we could all be in the same boat some day, and certainly would appreciate someone bailing out our leaky vessel.... How can one "not" protect American workers?

The answer to that question is this: that we, the rank and file Americans, have to realize that protectionism is a form of war. As we recently found out, when a nation goes to war, it had better be sure beforehand that it will end up on the winning side. For once a war is started, the costs are always higher then expected. And if the enemy has a method (not in your calculations) of outmaneuvering you,... you never get the chance to say... "oh...never mind... let's call this off and pretend like it never happened..." For once you hurt someone... they will do their darnedest to hurt you back.

The Smoot Hawley Act hurt a lot of people indiscriminately. The Harley Davidson tariff did so with precision. It's the difference between accomplishing the same goal with either an all out war, or with a deniable, dark-ops special operation. One must take into account, and not be surprised, by the retaliatory measures which be taken against us.

As an aside, it is worth noting that an interesting observation came from the removal of the Smoot Hawley Tariff as WWII came into closure. The world emphatically sought assurances that no Smoot Hawley Act would ever be passed again. This bitter hate led to the Bretton Woods Agreement, in 1944, a great lessening of global tariffs starting in December 1945, and the General Agreement on Tariffs and Trade, in the 1950s. However it is interesting to note that special provisions were made for national security. Due to globalization in the 20's and 30's, Britain and France had ceded their watch making to Germany and Switzerland. Later they discovered that the lack of a watch industry was a great handicap in building defense equipment during the war. Both nations determined never to be without a watch industry again and placed embargoes on watch imports after WW II. (Lewis E. Lloyd, Tariffs: The Case For Protection, 1955, p. 137-139). The US is in somewhat the same danger today.

When dealing with protectionism, it is important to first sift through all the facts to see who is benefiting from whom. When George Bush protected the American Steel Industry in 2003, business went to China costing our nation 200,000 American manufacturing jobs.... Yet when one goes shopping for jeans, and sees articles from the Philippines, Malaysia, and made in America all at the same price, it puts a hole in the argument that free trade lowers prices for all Americans. Obviously instead, it increases profits for those who move their business to cheap labor areas off shore, then selling it back to us at the rate we are used to paying... Again that is why one must be leery of free trade pronouncements being made by large multinational corporations. They may benefit someone else, and not America.

Protectionism helps the American worker as Ross Perot adequately explained. The downside is that protectionism hurts the American consumer as Al Gore showed Ross Perot in their 1993 debate over NAFTA on the Larry King show. Al presented Ross with a large picture of Smoot and Hawley shaking hands in a congratulatory ceremony. As with anything tainted with protectionism, we need to weigh the benefits against the risks. Sometimes the risk may be acceptable. But it is unconscionable for us to look at protectionism in a vacuum.... as one affecting just American workers. The proper yardstick to measure protectionism's effectiveness would be to measure its impact upon the total amount of money circulating throughout our system. Will protectionism grow the amount of money... or diminish it. Each case by case analysis needs to take that single measurement into consideration, otherwise we will be making a great mistake, sort of like Smoot and Hawley did during Hoover's administration.

Bottom line of this entire post:

Raising tariffs, like war, is a very unpredictable method of furthering a nation's wealth. Therefore other methods to increase our manufacturing base should be tried first.

Recognizing the severe nature of our economic situation, any policy change if enacted should be given expiration dates. A handout is helpful; continuous welfare is not.

To return American manufacturing jobs back to Americans, the entire process of acquiring raw materials to delivering the finished product, needs to be cheaper here in America, than it would be with foreign workers halfway around the globe. The best avenue for providing that benefit while getting the biggest bang for the buck, is to temporarily change our depreciation laws so that capital purchases can be written off entirely over one year. As opposed to the much talked about stimulus package amounting to no more than a national welfare check; this little change would have a lasting economic effect with less long term cost than a corporate tax cut. The second short term policy would be to use a budget reducing gasoline tax, to artificially raise fuel rates, making it expensive for foreign manufactures to ship here. Doing so would reward those businesses that built near their markets.

Both stimulate our economy without directly affecting retaliatory measures by our trading partners. Those two, one politically acceptable and one not, should be our first choice of action.

Longer term solutions involve 1) educating most of our youth to be technically savvy, 2) moving forward with a Carbon Tax benefiting technologically advanced societies over cheap working developing nations, and 3) developing cheap energy sources (2.3 cents per kilowatt/hour) for American manufacturing, would all keep American jobs in America...

What we do not want to do... is believe that we are an island and impose trade restrictions that isolate and collapse us further, instead of growing our way out of our current crises. We do want to lower all other costs so manufactures will want to set up shop here, on these shores, despite our higher wage levels......

Chapter 5: Open Access To Short Term Credit

kavips — Fri, 17 Apr 2009 14:55:32 EDT

The easiest way to become rich, is to take other people's money and give none of it back... -- kavips

Leap back two years ago. In a speech given before the New York Bankers Association (NYBA), OTS (Office of Thrift Supervision) Director John Reich expressed concerns about weakening credit quality at some financial institutions. Specifically, he identified inadequate loan documentation, misaligned loan pricing relative to credit risks, declining underwriting standards, liberalization of loan terms and an increasing reliance on wholesale funding as areas of concern to OTS. (Article from Mortgage Banking: May 1, 2006.)

It appears that banks have (two years too late) finally taken up his advice. Now that our economy is collapsing and the Federal Reserve is trying every trick it can think up to loosen credit, the amount of loans going out into the commercial market, can be best described in three words: shrink, shrank, shrunk.

As the new owner of $172.5 billion of preferred shares and warrants in 208 U.S. financial institutions, the Treasury Department hasn’t succeeded in thawing frozen credit markets, leaving taxpayers propping up an industry that won’t lend to them.

More than 8.5 trillion has been pledged by the Federal Reserve and U. S. Treasury to back up financial institutions. Instead of making it easier to obtain a loan, getting approval has become more difficult. Fed reported that about 85 percent of U.S. banks said they had tightened standards on commercial and industrial loans to companies with more than $50 million in annual sales, up from 60 percent in July. Ninety-five percent said they increased the cost of those loans. About 70 percent said they made it more difficult to obtain prime mortgages, and almost 65 percent said they did the same for consumer loans.

Not the best statistics to get the economy going again..

While mortgage rates have declined, they haven’t fallen as fast as bank borrowing rates, meaning financial institutions are demanding more profit for every dollar they lend.

Average rates on 30-year residential mortgages fell to 5.14 percent last month, according to data compiled by McLean, Virginia-based Freddie Mac. That’s down from 6.67 percent in June 2007, before the worst turmoil in the housing market. At the same time, the spread of mortgage rates over the 10-year Treasury bond yield rose to 2.958 percentage points from 1.567 or soared inexplicably 88.7%!

With the exception of GMAC, which immediately began offering loans to GM customers with lower credit scores in order to halt the decline in auto sales, most financial institutions that received TARP funds have been reluctant to lend.

If they can't make loans, many banks may hold on to the government capital until stability returns — or use the money to finance takeovers of weaker rivals. Pittsburgh-based PNC Financial Services Group Inc. did that last month when it acquired Cleveland-based National City Corp. — hours after receiving approval for $7.7 billion from the government.

But had they opened the gates holding back credit, last week's evidence shows what might have been the economic outcome of doing so.....

Mid-Michigan General Motors dealers say the loosening of credit requirements by GMAC Financial Services has prompted an increase in traffic to their showrooms. CNN reports that some dealers reported that 40% of their sales for the month came in the last two days. It was on Dec. 29, that the U.S. Treasury Department gave GMAC $5 billion from its $700 billion Troubled Asset Relief Program, and agreed to lend GM up to $1 billion to support GMAC.

"I've got a showroom full of people," Jim Messick, general manager of Graff Chevrolet of Mt. Pleasant, Michigan, said earlier this week. "It's really helped."

"It's beyond hopeful. We have already seen an increase in sales by 20 percent. It's almost equal to what we were down," Machunsky said of his sales in New Hampshire.

With the economy slowing, banks are seeing a big decline in the number of people seeking loans because nervous consumers and small businesses are scaling back their borrowing.

In fiscal 2008, the number of small business loans issued by banks plunged 30 percent compared with the previous year, according to the U.S. Small Business Administration. Over the same period, the dollar value of those loans fell from $20.6 billion to $17.96 billion, a 13 percent drop.

The pullback is partly a result of tighter credit availability among lenders and declining creditworthiness among borrowers. But it also reflects a big drop in consumer spending that is forcing small businesses across the country to put off expansion plans and cancel orders for new equipment.

The reluctance to take on loans boils down to fear.

The Treasury's goal is to revive lending — and thereby stem the credit crisis — by freeing up potentially massive amounts of loans. For every dollar a bank keeps as capital, it can lend out as much as $10, which means the $250 billion injection could in theory result in $2.5 trillion in available loans.

But banking experts say lending such a vast amount would be almost impossible given the economic downturn.

If small businesses see that the bailout is starting to take hold and confidence is returning, they will be more likely to seek loans, helping kick-start the economy's recovery, according to experts.

One example of a business owner looking for signs that it's safe to borrow again is James Duran, CEO of a Silicon Valley staffing company that does business with big tech companies like Google Inc. and Yahoo! Inc.

Last year, he had as many as 200 employees. Today, he's got just 15 — cutbacks that mirror job losses across his industry.

He said he has a $1 million line of credit to help build back his company but that he would be "crazy to use it now."

"Once I see this cloud of uncertainty lift and companies go back into hiring mode, I'll start using that money," he said. "But we're not even close to that."

What we are seeing is a circle of borrowers and lenders each depending upon the other to make the first move.. Banks are depending upon the economy to signal it's safe to lend again, and customers who seek those loans, are depending upon the economy to signal that it is safe to again apply for a loan. Neither one is moving until they see a change in the economy.

It's the economy... stupid... all over again. And it goes further back than that: FDR said in speaking of the 1933 crises.... we have nothing to fear, but fear itself.

Since the practice of calling in loans greatly precipitated the Great Depression, a review of 1930's history is appropriate today in anticipation of what can again become our fate if we make the same mistakes, and follow the same choices.

When the stock market fell in 1929, brokers called in their loans, leveraged 10 to 1, which of course could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or simply not used. Bank failures led to the loss of billions of dollars in assets. Outstanding debts became heavier to bear, because prices and incomes fell by 20–50% while the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By April 1933, around $7 billion in deposits had been frozen in failed banks or those left unlicensed after the March Bank Holiday.

Bank failures snowballed as "desperate" bankers called in loans which the borrowers did not have time or money to repay. With future profits looking dismally poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. Banks built up their capital reserves by making fewer loans, which exponentially intensified deflationary pressures. A vicious cycle developed; the downward spiral accelerated.

The liquidation of debt could not keep up with the fall of prices which it caused. The mass effect of the stampede to liquidate, increased the value of each dollar owed relative to the value of declining asset holdings. The very effort of individuals to lessen their burden of their percentage of debt, effectively increased it. Paradoxically, the more the debtors paid, the more they owed. This self-aggravating process turned a 1930 recession into a 1933 great depression.

Today, in order to open access to short term credit, our real focus must be focused on the psychology of how to alleviate that fear of losing one's money... Something that is simply said......but is hard to do.

Conclusion:

The economy must be fixed, or more appropriately..must be perceived to be fixed, before the buyout strategy to loosen credit within the markets can begin to take effect. As we saw with GMAC's bold move, loosening credit coupled with great deals, does move out old inventory. But as we still see today, the problem is in getting banks to do what GMAC just did. After all, it goes directly against the advice given to them two years ago.....

Chapter 6: The Painful, Necessary Long Term Solutions

kavips — Fri, 17 Apr 2009 14:52:55 EDT

If we could owe this debt to ourselves instead of others, we'd be rich from all the compounded interest we'd be paying back... -- kavips

There is nothing that a strong dose of morphine can't cure.... at least to the person receiving the injection ..... Damn... No legs.... Ahhh... no problem.....

Obviously the long term plan is the one we need to tackle first, so short term fixes like the one above, are seen as steps in the right direction, and not random neural contractions found during a soon-to-be-eaten chicken's last minute.

Long term:

1) We need to spend within our means, both personally and as a nation.

2) We need to pay down the deficit, reducing our national interest payment.

3) We need to control our spending on entitlements: Social Security and Medicare.

4) We need a better trade balance with our trading partners.

5) We will need more cash in order to do all of the above.

We have been lulled into believing that we can spend money that we do not have... Hell we've been doing it for 8 years now... We did it for twelve years before that, starting with Ronald Reagan. And it was working fine up until late September.... Why can't we keep on the same path?

As we have now found out, there is a small problem with taking out loans.... It's called paying them back. To pay back a loan, some of the money that you are currently making needs to go back to those who invested in you at the beginning. Wait you say... why can't we get more people to invest in us, and use that money to pay off those who invested in us earlier?

It's been tried. And someone Madoff (made off) with a lot of other people's money by doing just that. But eventually somewhere along the line, one cannot find enough new people to pay off the old, and crash, the system collapses.. Sort of like our Social Security system today ....

So if we have a loan, we have to pay it back?

Yes, that seems to work best. Although often loans can be forgiven after it becomes clear that they will never be repaid, and that further attempts to repay will collapse the entire pyramid where everyone loses everything... In those cases, sharing the risk by writing off some of the debts, allows one to begin making money again at some point in the future.....

But choosing to default, or not paying off the loans, also makes it impossible to get loan money later when you really need it.

So how much do we owe?

That depends on how you want to count it.. When you get a loan, there is a price tag attached that is called interest. One pays back the loan plus the interest to the party that fronted the money. After all, that is why people lend money in the first place... to make more of it... So if you bought a loan for $100,000 dollars, you could pay $100,000 the next day and be done.. That is one way of counting how much you owe. But, over time, that house you are buying is going to cost you 2.15 times its amount, because of compounded interest. So saying that you owe $215,000 is also correct....

The current U.S. obligations as of September 30th..( before any of the bailouts were passed by Congress) stood at 56 Trillion dollars. Every man, women, and child now owes $184,000 dollars. If we pay that back over 10 years, that is $18,400 per year of our income going just to the Federal government. Which means that if your family is struggling on $60,000 a year right now, that you had better start planning on how you can survive on $41,600 over the next ten years.

It may not be as bad as it seems. If free health-care becomes a reality, a yearly out of pocket savings of $7800 is a step in the right direction. Now we have just $10,600 to make up.... And if we cancel further investments into our 401 K for ten years, depending on how much you put in yearly, that accounts for somewhere between another $2000 to $10,000 dollars of which you will soon be out of pocket.. One had better hope that Social Security is still there for you when you retire.....

This is not something we have options on. This is a reality that must happen. Of course we can choose to pay it out over a longer time frame and survive with less money leaving our household per year, but over the span of a long time, we will ultimately pay a lot more... It seems better to knock out the debt, learn to live within our means, and once that debt is paid, prosper again after hopefully having learned our lesson over not paying as you go.....

That means that any new money pouring in from the "tax to the max", must all be designated toward paying down the debt, and not be split off to other much needed projects. That is a hard choice to say no to... but once all debt is gone, less money will be required to be collected to fund those projects on a pay as you go basis. Our tax burden will be much less, giving us more money to spend, yet we will have ample money to fund the projects being built. The economy will grow in that scenario.

Of course this $184,000 is a shock figure designed to wake America up with a dose of reality. A bulk of the repayment will be paid back in the form of corporate taxes... starting as high as 50% and climbing perhaps to 90%. But the American consumer eventually also pays for those in the higher cost of each item he buys, since that payment will be embedded in the price he pays at the cash register.

The corporate rates mentioned above, were the same levels applied to corporate incomes after WWII, which continued and were not relaxed until under John F Kennedy's administration. Over this time frame, corporations will have to settle for just being in business. After all,... that is what most small businesses do; they are grateful each day they open their doors. There is going to be a new reality that permeates the American corporate business world.

The essence of our nation's problem is that we have lived off a credit card; one that will be paid by our children and grandchildren. And it has not just been our government that has done so.. Private debt, corporate debt, as well as government debt have all elevated our spending beyond where it should naturally be. This has been going on for so long that most investors thought that this debt/GDP ratio could continue rising indefinitely without ever overwhelming the economy and corporate earnings. In fact, the way it kept growing, we also started wondering if this could also go on forever. The total debt in round numbers is almost $52 trillion. This was not much changed this year due to the credit freeze, but rose $4.3 trillion in 2007, which was over 5 times the rise in GDP. The composition of the debt is $25 trillion in Corporate debt-both financial and non financial, $14 trillion in Household debt, and $13 trillion of Government debt-Federal and State & Local) and the GDP is $14.4 trillion. These debt composition numbers are rough estimates but all would agree that we currently owe 3.6 times our entire GDP....

This debt cycle really started in the early 1980's when the U.S. savings rate peaked at over 10% and continued downward until this year when it troughed at a negative savings rate. People once again spent everything they made and then some last year, pushing the U.S. personal savings rate to the lowest level since the Great Depression more than seven decades ago.

As anyone who has been on the wrong side of debt can tell you, once the savings rate goes negative, it becomes a lot harder on the next round to change it. For then we have to pay charges on that amount which we spent beyond our means... So not only do we have to cut back to live within our means, but we need to further cut back in order to live within our means AND pay back those pesky charges.....

Under compounded interest any wait to pay back the cost is expensive; sooner is better than later. If we borrow a dollar and are charged with 3% interest, we pay back that dollar and the three cents of interest we owe... If we wait one year and are charged 3% on the dollar-and-three-cents we owed but did not pay back, we now owe a dollar and six cents. That may not sound like much, but when it comes to big numbers, that 3% on our national debt of 10.6 Trillion, becomes $318 billion dollars. One chuckles when Republicans find themselves up in arms over bailouts costing these amounts, but yet when the same figure is just interest, it is just considered the price we pay for living "la-de-da" beyond our means... At 3%, want to know how much interest we will pay on just that 3% interest itself, if we skip a year? $9.8 billion just to pay the interest, on the interest, that we are too broke to pay... "Deficits don't matter" said Dick Cheney. When no one has money... where do we find that additional $9.8 billion to cough up?

But debt can be eradicated. Here is proof from a fellow posting his strategy.. It is a personal story to be sure, but it shows the proper mental attitude that must be created if one is about to embark on changing his lifestyle for the better....

Just the numbers of consumer debt are startling.... U.S. Household debt soared from 4.2 Trillion in 1990 (the first Bush president) to $13 trillion in 2008. During this period, the average American household dramatically increased its home mortgage debt, from almost $2.5 trillion in 1990 to nearly $10.5 trillion today. Similarly, consumer “revolving” or credit card debt quadrupled from $239 billion (B) to about $950B today. Moreover, the growth of U.S. credit card debt is substantially under-reported by the official U.S. Federal Reserve statistics, due to the tremendous volume of mortgage refinancings that were transacted between 2001 and 2005. At least $350B in consumer credit card debt was paid off through mortgage refinancings, home equity loans, and cash proceeds from the sale of real estate over this five- year period. This is consistent with the findings of Alan Greenspan and James Kennedy, who report that equity extraction was used to repay an average of about $50 billion of mortgage consumer debt between 1991 to 2005, about 3% of the outstanding balance of that debt at the beginning of the year.” Significantly, it averaged only $25.2B per year prior to 2001 (link to Manning's work)

So how do we responsibly pay down our national consumer debt? Judging from the data provided above, it cannot be done. But a reasonable approach would be to isolate consumer debt into three categories: a) Chapter 7 Bankruptcy; b) substantial debt relief in the range of 60 to 80 percent; and c) repayment of the full balance over a 5 year credit management plan. The first category (a) is for those right on the edge; we know bankruptcy is inevitable, so we get it done and over so that they can start their ten years of rebuilding their credit as soon as possible. The second category (b), is a win win for both lenders and debtors. Just enough of their debt is forgiven allowing them to be debt free in 3 years.. The third category (c) is solvent enough to pay all their debts over a 5 year period on a managed plan. As is done with any bankruptcy, applicants for these programs are mean tested to determine into which category they fall ... We can dream that all debts may someday be repaid. That is unrealistic. A practical approach moves forward, determining which debts are solvent and which are not, expeditiously processing those that are not, and in just a short time, all debt is secured and we know what our economy has to work with. No more surprises.

You can determine how your family finances can be resolved by using this calculator provided by the same Manning mentioned above.. I recommend that if you have unsecured debt, you play around with the credit card repayment section, seeing the differences that occur if you contributed your coffee fund, you movie allowance, your HBO bill towards paying down your credit card debt. Those little totals often taken for granted, can make years of a difference in pulling yourself out of debt.

We often hear pontificating towards our governments, local, state, and federal, end with the admonishment that since American consumers live within their means.... why can't the federal government do so as well...

That is not exactly true. We do a lousy job compared to our parents.

They and their parents bought savings bonds... Which brings us back full circle to our best idea of paying down our national debt... What if a percentage of everyone's pay check went toward buying themselves savings bonds. Unlike a tax, at the end of maturation, they get the entire bond returned to them with nominal interest tacked on.

Kind of like our parents and grandparents implemented for us growing up. A forced savings plan... "Oh but I want to spend it...." "No, we're putting it in savings"... With this plan, like a tax, the government has access to increased funds, but unlike a tax, it pays us back. This has three things going for it.

One it helps us save. The American saving's rate was negative last year. That means individuals spent more than they had... Obviously when the time comes to pay it back, it will not be good for the economy.

Two it provides a intermediate source of funding for our government. Instead of cutting taxes, this plan augments taxes... Since the money must be paid back upon maturation, the government needs to get a rate of return higher than what it is paying back..

Three. Using this money to decrease the Federal deficit, is a win win for all. Essentially we are using this program to buy up our own stock. It will be us who have control over our nation's destiny, and not.... it's foreign creditors.... Applying the entire amount bought in this fashion, to paying down our National Debt, will give us lower taxes in the future. The legislation initiating this program could earmark all revenue from these mandatory bought savings bonds, go towards decreasing our National Debt.

It will take great leadership to change our behavior. The bully pulpit is needed now more than ever. Since the 1980's, we have funded our economy by borrowing. Anyone can be given an unlimited credit card and then tell us he is living well. For a long time this nation has placed the acquisition of corporate profits as the prime gauge rating the welfare of our nation. Now, with acknowledgment that it will take 4 years of GDP to pay off all debt, private, corporate, and governmental, we understand our predicament.

Simply put: to survive, we need to acquire more money than we spend and use that extra amount to buy down debt. Once our debt is down, we can use that extra amount to spend again, exploding our economy through the roof of expectations.

Chapter 7: Paying Down The National Debt

kavips — Fri, 17 Apr 2009 14:47:52 EDT

My bills are too high to expect me to help out the economy.....-- kavips

One Trillion shy of all domestic Household debt (14T) , is the debt imposed upon us by "the borrowing of our governments"... local, state, and Federal (13T). The majority (10.4T) is our Federal debt. It should come as no surprise that tackling this task should be our first priority to insure that any short term economic gains we create, are not wiped out months or years later.

We were on a successful track to achieve this goal just 8 years ago... Budget surpluses were projected far into the future, and before our eyes, the whittling down of our national debt actually happened . Today, Generation X'rs and Y'rs simply accept that as fact, that balancing the budget is possible. Very few recognize how much of a miraculous achievement that thing is: a budget surplus... For until Clinton-Gore arrived, no one ever expected our national debt to decrease. But decrease it did and not only did it actually drop within our lifetimes, but a credible path was tracked showing it decreasing year by year to negligible amounts. And then ... with one election... things drastically changed. We stopped our Treasury from taking in enough money to cover its known expenses and instead, borrowed the amount to fund what was necessary.

In eight years we went from a projected $5 trillion dollar surplus to an actual $10.4 trillion dollar deficit; a flip flop of $15 trillion dollars! Political afficiendos will be quick to blame Republican philosophy and their elected president: George W. Bush. Unfortunately they are way off the mark. (I say unfortunately for if one party and one president were truly the problem.. the fix would be much easier to amend...)

The problem is a systemic one. The entire financing system of the Federal government is now broken; almost to a point where returning to the glory days of before 2000, is barely considered a laughable alternative. The problem can be best ascribed to a head on collision between a poorly timed demographic shift, and unreal expectations. Put simply in one word, entitlements; put in four words, Social Security, Medicaid, Medicare.

Here's how paying off our nation's trillion dollar debt benefits us.

Courtesy of Federal Budget 2009 (Right click for full image)

Looking at the image and being asked what can be cut under current law, one sees that only two areas of the above pie chart cover discretionary spending. The other four cover mandatory, non-discretionary items. That means that they get paid, ... irregardless. We have no choice but to pay them fully. We have to pay interest. We have to pay Social Security. We have to pay Medicare and Medicaid, as well as all other mandatory payments such as Treasury obligations.

The only two areas where we can slice, dice, and cut back on expenses, are between that of national defense, and everything else we think of as being "our government"; both together amount to a paltry 38% our our entire expenditures. 62% of our Budget is locked down, and commitments have already been determined where it will be spent.... long before the fiscal year even begins.

So one sees that if we were to pay down the National debt, we free up the interest payments ( 9% of our current budget) which can then be applied to other things we might need ten years from now.

Obviously our entitlement programs will have to be changed. One can see that ridding ourselves of Medicare and Medicaid as a governmental expense would go a long way to reducing our deficit, and ultimately be a big push bringing our interest payment closer to zero.... But doing so... brings up the ugly social issue of what to do with those Americans lacking health care....

Contrary to popular belief getting rid of these programs is not completely impossible. Except for the time-frame covering the past 40 years, mankind has survived OK without Medicare and Medicaid. Rome lasted a thousand years without it. We all know that if we suddenly became faced with an all-out-war against some type of alien invader (Independence Day),what money was currently designated as a mandatory expense to cover health costs, would instantly be moved to supplement our planet's defense with nary a whimper. Our sick would make due the best they could... perhaps even do better than they do now... (at least for those 2 million Americans a year who pick up a nosocomial infection!)

The writing is on the wall. One entitlement will have to fall in order to save this country. As America's retirees get older, the medicare problem is one costly extravagance that must be looked at closely to determine whether it helps or hurts our nations viability.

When compounded with Social Security's insolvency, the Medicare situation takes on an additional albatross around its neck. For as one thinks about it, we are using federal funds to extend the lives of those who are receiving Social Security. Using all and any expense available to keep someone resuscitated long enough to earn one more Social Security check, does not make practical or financial sense. We must rethink our commitment on how we will provide long term health care, based on today's prices... not those prices existing back when the Great Society was envisioned..... the 1960s.

Ultimately for governmental medical assistance to survive, we will have to suck the profits out of health care. There will be a few who protest. But if Medicare were suddenly to cease to exist, and health care became a cash only commodity, somehow we would survive. Who knows? When faced with no free blood pressure medicine, we might try other methods to keep alive... such as eating right and exercise.

The amount of people dying will never change. Everyone born will die at some point. All we are doing, is removing the unlimited amount of taxpayer money used to support the unreasonable assertion,that we have the right to use lots of other people's money to live as long as we selfishly can.

Think about this. Very few of us would purposefully bankrupt our own flesh and blood children by forcing them to pay out of pocket for our over-the-hill medical needs... With Medicare being fully funded by taxpayers..... it is doing just that...

Of course there is another method we can use to fund our budget and keep Medicaid and Medicare: bring in double the revenue...

But, because of the demographics of our aging population and the sparsity of those working young who are paying for the old people's expenses, keeping this cancerous expense on-board, and paying for it by saddling those still working with double taxes, is not a viable option.... One could argue that it is morally wrong. It would be saying to our children that "yes, we had the American Dream freely given to us by our parents; now you will have to work much harder, and earn even less, just to continue that dream for us."

The writing is on the wall... Sometime, somewhere in our future, it will have to go... Not disappear, mind you, but in its form now, funded as it is currently... it cannot last... The pie chart tells all. Tweaking 3 or 4 percent in any one category makes no dent upon our unfunded problem.. We must begin preparing ourselves for this uncompromising reality; one entitlement will have to go. Looking above we see the absence of Medicare and Medicaid in the Federal Budget, is more plausible than the loss of any other category.

If we were to wean ourselves away from that entitlement, and apply that amount in bulk towards our national debt as a payment of one half of one trillion per year, within 20 years.... our debt will be gone.

For when it comes down to discretionary spending... we are as low... as we can go... The cut has to come from Medicare/ Medicaid. What replaces it is a whole different discussion.....

So how high do taxes need to rise, (using today's figures without cutting out one entitlement), if we truly wish to decrease our national debt? Since the economy grew significantly during the Clinton years when all taxes were higher, those rates we can be assured do not stifle economic growth. As a first step, that would be the smartest move; let the Bush tax cuts expire. ...To those who argue that increased taxes constrain our economy, try and get a solid answer from them as to why the economy grew like magic when they were previously in place.

Since it has already once been done, it should not be hard to do it again. Right? Need more detail?

Let's look at the twentieth century as a whole.. This chart simply shows the highest marginal tax rate per year. It ranges from 7% in 1913 up to 94% in 1944-45. Graphically displayed it looks like this....

Graph Courtesy of Truth and Politics.org

Although the graph stops at 2003, this evidence shows the ending level extends at 35% through to 2008.

If one couples one's knowledge of history with numbers portrayed upon the graph, a correlating factor of 40% seems to be the ideal marginal tax rate.. When rates dip below that amount....they may last for a few years at that level, then they soar sky high for many years thereafter... It appears that languishing below 40% puts too much stress on the private sector. Something goes wrong, it buckles, and great governmental expense is taken to bring it back under control.

But if one uses the same evidence portrayed on the graph, and this time couples it with one's knowledge of economics, they notice that lower rates produced boom economies, and the higher rates stifled economic growth.

Recent knowledge ( ie. today's events) coming off of the experimenting and tinkering between 40 and 35 percent, leads one to believe that 35% is too low to sustain the economic viability of this country. As a nation we have socialized ourselves a bit too far to survive upon those lower rates.... 40% seems to be the optimum low that we can go....

Unfortunately because we played around with cutting underneath that magic number, we will be paying steep rates throughout the near future, very much like those which occurred between 1933 through 1963. Those who lived their full lives listening to Republican partisans constantly complaining about today's high taxes... well, thanks to them (Republican partisans), America's wealthy is about to find out just what "high taxes" really are.... As one can see from the chart, and can estimate from the amounts of the bailouts being currently given out.... the highest marginal tax rates for the wealthy, will climb higher than most of our wealthy has seen in their lifetime...

And because of that increase... our economy will slow.

The beauty within this chart is that it provides to all a sense of where the line needs to be drawn.. When we talk of raising taxes... we are speaking of returning to 40%, a level only 5% different from where we are now... What that means is ... instead of someone making a full billion dollars now, after future taxes are deducted that person would be still sitting on $950,000,000 dollars... Who wants $950,000,000 dollars? I do. I certainly would not fold my business just because I had to give an additional 50 million over to my government, a scare tactic some may make us try to believe. Especially since I already know that our economy functions more consistently with that additional 5% amount financing the support structure on which all businesses depend on.

So how much revenue does that paltry 5% increase raise? Try $390 billion dollars per year, based on current data provided for this year's third quarter.

True, that five percent does suck a little spending out of the economy, but if applied to the deficit, it reduces the amount borrowed which in turn lowers government's cost. Eventually when interest payments reach zero, we can again fund our government on a pay as you go plan, thereby balancing taxes with costs in a fine equilibrium....

So if we hold costs the same. How long and how high do we raise taxes to bring our deficit to nothing in 11 years... 2020.

Debt -----Yr Expenses---Yr income----Yearly incremental amount
10.4T--------- 2.7T -------------2.6T ----------------------- 204 B

(The extra 100 Billion comes from above: it's the yearly difference between current expenses and income multiplied by 10 for each year.)

So how much does that cost us? 204 Billion is what percentage of 2.6 Trillion? 7.8%

We need a yearly increase of just 7.8 percent to pull us out of debt in ten years, assuming we continue to spend as much as we do now, and that we continue to receive as much national income as we do now........

That would make the highest marginal rate (35% + 7.8%) equal to 42.8%: just 2.8% higher than it was during the booming Clinton Presidency. Really.... is that not a lot of hardship to undertake?... Especially when one compares it what our predecessors, "the Greatest Generation" had to pay in order to give us the prosperous America which we inherited?......

And if that increase amount is spread across the entire spectrum of our sources of income.

Courtesy Federal Budget 2009 (Right Click for Full Image)

The actual cost to the top ranked taxpayers, could be less.... One would be well advised to realize that the stimulus packages perhaps costing up to 3 Trillion by the time politicians finish robbing our future, will extend these estimates considerably.

But seeing the numbers makes one realize that we are not at the end of financial stability.... The United States has vast resources at its disposal to throw towards the global economic meltdown, slowing and then stopping its progress. We need just a moderate revenue increase to make it happen as well as begin making plans for shedding responsibility for one of our hitherto guaranteed.... Federal entitlements.

The question is what is in it for us... Bottom line... a job.

Although distant and remote, the National Debt plays a huge role in our economy, just as do charges and credit card payments play a similar role in everyone's household finance. Think of all the spending you personally would be free to do, if you owed no one any money and could pocket what you earned.... That same principal holds for our government as well.

Those of us who still have jobs today are worried. Those of us without... are worried even more. Our jobs and long term security, depend upon our Federal Government getting costs in line and living within their means as well.... As with any investment, paying out an additional 7.8 percent is affordable if one gets a payback of a higher return...

Those living in the 90's saw it with their own eyes... Dropping the debt creates long term stability and that.... creates jobs.

Chapter 8: Controlling Entitlements: Social Security and Medicare

kavips — Fri, 17 Apr 2009 14:45:26 EDT

Sometimes to see truth, you just have to sweep away the clutter ..... -- kavips

During our previous discussion over the National Debt, it became obvious that our deficit problems stem from these two entitlements: Social Security and Medicare.

Doing away with both will easily bring our national budget into balance, but that act will wreck inconceivable havoc upon the life of every American citizen. Doing just the opposite, offering free unlimited health-care as well as a full blown retirement package to every aging American citizen, unfortunately is no longer affordable when one factors in both demographic and economic factors.

So what do we do?

If one opens one's mind to possibilities, we have five choices. Simply put, they are these.

a) Keep both as they are:
b) Keep both with modifications
c) Get rid of one; keep the other as is:
d) Get rid of one; modify the other:
e):Get rid of both:.

These are our alternatives. The purpose of this chapter is to look at each one and decide which appears to be the best solution.....

Our first option is to keep these two entitlements as they are without changes. Let's review the data. In a famous CBS interview, the former head of the Government Accountability Office (GAO), David Walker laid it out clearly. "The cancer", Walker says, "(is the) massive entitlement programs which we can no longer afford, exacerbated by a demographic glitch that began more than 60 years ago, a dramatic spike in the fertility rate called the baby boom."

Let's go straight to the bottom line: how much will it cost us?

The following predictions are based on GAO simulations (2004). If we do nothing about our two entitlements, and if we wish to balance the budget by 2040, we will need to:

1) cut federal spending by 60% (impossible)
2) raise Federal taxes to 2.5 times of today's intake (impossible)
3) achieve sustainable economic growth in double digit range, every year till 2079 (impossible)

This gorilla-in-the-room problem belies the fact that there will soon be more people collecting benefits, than there will be those contributing. Old estimates (2004) predicted that this year (2009) would be the year when that subtle switch would occur. During 2009, our surplus stops growing, and we start down the other side; the pool from which we pay benefits, begins to shrink. By 2017 (the first year of the next presidency) the costs of paying out benefits, rise higher than the actual taxes bringing in the revenue. By 2041, the Social Security trust fund will be completely gone.

After that, if we truly wish to continue these entitlements, we must so on a pay-as-you-go plan, year to year; today's current level of taxes brings in only three fourths (74-78%) of the needed annual revenue...

So we wonder: just how much additional money are we discussing per year? For Social Security ... we are speaking in the realm of Billions....

Currently (2007) Social Security Benefits cost 4.3% of GDP and are expected by 2035 to peak at 6.1% percent of GDP... If the GDP at that point is close to $15 Trillion dollars, our annual benefits (at that future level of 6.1%) level out at $915 Billion dollars, and the shortfall amount, (25% of that), is extra we need to step up and pay beyond what we pay now..... That total is $228 Billion Dollars more each year, which is half the amount of last year's discretionary federal budget! ... Per person, assuming an estimated 330 million national population, each citizen will pay $690 more per year into Social Security which will amount to a charge of $1.89 per person per day. After 2041.....one bread winner in a family of four would need to cough up $2760 extra dollars every year.

That is IF..... nothing is done. Which brings us to the second option.

Keeping both with modifications. The Social Security's own trust report says this:

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 14 percent in payroll tax revenues (from 12.4 percent to 14.1 percent) or an immediate reduction in benefits of 12 percent or some combination of the two.

It's a small price to pay for solvency. But we must remember that Social Security is the easier of the two entitlements to fix. As David Walker, (former)GAO is quick to point out.., "the Medicare problem is five times greater than the Social Security problem. The problem with Medicare", Walker says, "is people keep living longer, and medical costs keep rising at twice the rate of inflation!" No! That doesn't sound good.

Congress made things worse in Dec. 2003 when they expanded the Medicare program to include prescription drug coverage. "The prescription drug bill was probably the most fiscally irresponsible piece of legislation since the 1960s," Walker argues.

When asked why, Walker says on tape, "Well,.... we promise way more than we can afford to keep. Eight trillion dollars added to what was already a $15 to $20 trillion under-funding. We're not being realistic. We can't afford the promises we've already made, much less to be able (to afford those) piling on top of 'em."

With one stroke of the pen, the federal government increased existing Medicare obligations nearly 40 percent over the next 75 years. Walker says, "We’d have to have eight trillion dollars today invested in treasury rates, to deliver on that promise," Walker explains. When asked how much we actually have, Walker replies, "Zip."

So where's that money going to come from?

It's gonna come from additional taxes, or it's gonna come from restructuring these promises, or it's gonna come from cutting other spending,

As a nation, we have promised unlimited health care to each of our senior citizens who will never see the bill, and our government is borrowing that money (at interest) to pay for that privilege. Obviously this is absolutely unsustainable! More so it is abominably immoral to our children. As a nation we simply cannot keep up.

So what modifications are on the table? Some being mentioned are 1) means-testing supplicants for benefits, 2) increasing payroll taxes, 3) increasing the retirement age, 4) cutting back on benefits, and 5) paying cheaply for preventative health-care so fewer citizens require the more costly operations. But none of these options cover the looming demographic shift of baby boomers who are now beginning to reach retirement. Here is a pictorial representation of the problem....

(Right Click on Image for Full View.)

Means-testing supplicants for benefits, is the second surest method to stretch out our resources so those who solely rely on these two Social Services can still have them available despite their catastrophic cost.

But there are two opposing sides to implementing "means testing". Those with high incomes who paid more of the burden, feel they should at least get something back in return... This group uses social security and medicare at relative high percentage rates. The opposite side argues, that because today's crises is drying up funding, those with high incomes who can otherwise pay out-of-pocket for their expenses, should have their benefits allotted to those who earned less over their lifetimes... That last argument is a fancy way of bluntly saying that "those with money are funding the health care of those without"...

Whereas we balk at the concept of having the rich pay the costs of the poor, the social cost of returning to the alternative, .... say Victorian England's version of dealing with the poor, bothers us as well.. It at least opens our perspective that the option we currently have of keeping both social entitlements solvent (even if it is a bad option), may be cheaper and better than the alternative of eliminating either or both Social Security and Medicare altogether. The ultimate answer lies in this one question that needs to be asked? In the future ... how much of today's corporate or small business profit will need to be siphoned off to cover other unforeseen expenses; expenses that the current entitlements prevent from happening?

If you could imagine this futuristic scene: an unsecured retail store just sitting in the middle of a town that is full of people who had not eaten a full meal in months.... How many dollars, how much additional money would be needed to bolster that store's security, to insure that business was present and ready to do business the following morning? Is the small amount we pay out for entitlements cheaper than the costs we will have to bear for abandoning them?

To find the answer that is required, we need to investigate alternative models to help us determine whether or not, the alternative costs of doing away with our entitlements, would be more, or less costly than keeping Social Security and Medicare as they stand today....

Whereas "means testing" may create a line in the sand and prevent some leakage slipping upward into taking care of the well-to-do, it also may allow a greater problem to become exacerbated. That would be to alienate to our detriment, those few providing the majority of the funding for these two programs in the first place... For they are already paying out far more than they will ever receive... If we push too hard and force them to pay for something they will never use, our American virtue of fairness will one day catch up to this arrangement, and allow them to opt out of the system entirely, because basically, we will all agree it is the fair thing to do. If that event ever happens, our entitlement problem just fell over the canyon wall.

However the surest method of entitlement solvency lies in increasing our payroll taxes. Yes, these are regressive taxes but if we would just be willing to pay 12% to 14% percent more in FICA taxes, which raises their rate from 12.4% to 14.1% percent, it would save social security.. That is an increase of 1.7% per paycheck... At 1.7% percent on an income of $60,000, the average family would receive $1020 less per year in take home pay.... But that extra $1020 would be enough to keep Social Security solvent for years to come...

These are hard facts we deal with. We can write our Congressmen and say "you must protect Social Security".... But when they follow our orders, and our time comes to ante up $1020 that we do not have.... we begin to wonder how on earth we will ever survive on what little we have left....

The ultimate question is: can you afford an additional $1020 each year of less income? That averages out to $19.61 per week, or .49 cents for every hour you work! That is the unmentioned bottom line that is required to keep Social Security solvent for years to come... Whereas some of you may doubt whether you can afford that increase... those of you still wondering how you can survive on $20 less per week, ... must balance that cost against the cost of having no money available to you after you quit working.

Now if that increase is coupled simultaneously with a larger decrease in Health Care costs, then perhaps the 14.1% increase is affordable after all.. This is why all arguments on dealing with entitlements must take place in an open forum. For there are consequences out there that are so remote and yet so overwhelming, that no one person can see all the options while staring at the drawing board... Only with the give and take of offering a plan, and then having it modified under sharp criticism, can we forge from such diverse outtakes as exists across the American spectrum, a solution that is workable over an immense span of time.....

Most likely that increased cost will be split between the business and the employee as is currently done today.. Per person $510 or half of the $1020 will be paid by the employer, with the additional $510 being supplemented by the employee... However we must factor that this too creates a drag upon the economy. Every business must now pay $51,000 over what they currently pay now for every hundred employees on their payroll... A small business with 100 employees and $1 million in sales, loses 5.1% off their margin. If every similar business was losing around 5.1% off their benefit line, it would be hard to convince such a business to re-invest in people in order to get America back to work... Far better instead it would appear for that business to invest in a machine that does the correct job each and every time, and over its work-life costs less than a human being...

However, sobering as this increased cost is, if this moderate increase is dropped into place simultaneously with the exiting of having-to-provide-medical-insurance to each and every one of its employees, this solvency issue could become a big win for business, and the hiring of human beings would be less negative than it was before...

The second option, the one of increasing the retirement age, confronts the Social Security problem in two ways; although it does not completely solve the entitlement problem, it is the best option available to stem some of the ebbing of money away from the trust fund.... Jumping the retirement age upwards by 5 years from 65 to 70, adds 5 additional years of tax money pouring into the system, while also decreasing by 5 years the amount of benefits that are needing to be paid out..... If we garnish 5 years of extra funding and lose up to 5 years of paying out benefits, just moving up the retirement age by 5 years gains 10 years of funding per future retiree.. This is easy to do, and benefits all that do it... Some may protest having to wait longer to retire... It is not so bad if waiting 5 years is framed as helping out one's country.... Sort of like doing one's duty as a citizen.... For those fortunate to have private accounts with anything left since November, the additional 5 years of compounding can make a huge difference in how one passes the time during their retirement.....

All evidence points to a net benefit with no negatives, of raising the retirement age.

Cutting back on benefits, the third option, is the normal way unimaginative managers struggle to control costs. Although some monitoring of the government's money is always required, mandating the spending of every penny and watching every penny being spent, is a costly waste of time. Furthermore, cutting back is the worst option.. for even though it may help balance the budget over the course of one year, in doing so it jeopardizes the balance of all fundamental economic structures that exists today...

Cutting back on our aging population's social security income places tremendous detrimental effects upon our entire economy. Just as taking one's foot off a car's accelerator causes it to slow down, anytime one tinkers with the income flowing into America's citizens by reducing it, they decelerate the economy... With less income suddenly entering the fuel line, people have no choice but to cut back...

Thereby saying "yes" to Social Security cuts, ie. a reduction of benefits per person, does indeed cut down on the amount of Federal money being paid out; it also depresses the economy by that exact same amount which is being removed... In a booming economy, that cost saving device might have a different consequence than if it were to take effect today. Now, at the historic moment when we desperately need Federal money priming economic transactions all across our country, to diminish the pay-out to those receiving Social Security, hurts the very economy from which we need to acquire the additional income required to pay out those benefits in the first place... Instead of helping solvency, we aggravate its spiraling out of control...

Representing 4.3% of our GDP, we do reap benefits from all that Social Security money moving through the grid of our markets. Cutting back Social Security payments impacts a huge economic detriment. This plan should be used when default has become the last and only option.... When one wants to start a car's engine, shutting down or decreasing its fuel supply, is the wrong way to get it started.

Our last option, the one of paying cheaply for preventative health-care so that fewer citizens require the more costly operations, is the true, best scenario, long-term approach to our reducing our nation's future costs... Take just one example: one gastric operation costs as much as 100 colonoscopies. If everyone received a colonoscopy and we had not one gastric operation because of early detection and removal.... consider the savings that would be at our disposal.. If we tackle our top four killers, strokes, heart attacks, breast and prostate cancer with detection and prevention as mandatory practices, then the total payout amount from the Fed to physicians and hospital corporations, could be greatly reduced... Unfortunately there is little data in the United States to verify whether or not this theory has merit upon our human population... But there is large veterinary evidence currently embraced by the United States agribusiness community, that speaks quite well of the cost savings being found through preventative care... Likewise, other countries which decided not to leave something as important as human health care to speculators and money hoarders.... can also provide similar evidence which backs moving health care towards a preventative direction. We can glimpse hope for our own medical future by looking hard at some of their historical statistical evidence....

Lifespans. Obviously as a society we dream of achieving as long as life as possible. It would make sense to find out which form of society has the longest lifespan and then do what they do... As I said, it makes sense.. According to the CIA, the top ten countries ranked by lifespans are as follows...

Macau ..........84.33 years
Andorra.........82.67 years
Japan............82.07 years
Singapore.....81.89 yrs.
San Marino...81.88
Hong Kong...81.77
Australia.......81.53
Canada........81.16
France.........80.87
Sweden.......80.74

The United States (78.14 years) is ranked at 46th behind such countries as Bosnia Herzegovina (42), Jordan (39), and Greece (25)... At first glance it appears that living in a small country or municipality can lengthen your lifetime.... Out of the top ten, only five would be considered "real countries". But if one thinks for a moment, the benefit of having a territory consisting of only urban area, makes sense out of these figures. One has only to remember the access one has to medical care in our metropolitan areas versus what one finds across the vast expanse of rural America, where one might live 30 minutes away from emergency medical care often requiring a full hour round trip. If one looks down the CIA's list, rural nations as well as those suffering extreme poverty, tend to have shorter lifespans..

But even so, several of the top ten nations have vast expanses of rural areas. Both Canada and Australian do rather well on the chart of life expectancy... France and Sweden also have large areas unsettled by cities and suburbs, as does parts of Japan.... How do they do so well and what take-away can we pull from those five societies who all seem to have discovered the secret of living well....

If one focuses on diet, perhaps there is some magic in eating sushi, or kangaroo, or berries, or drinking wine, or vodka out of bottles with a blue label...

But if one focuses on their medical care one sees some interesting correlations... Here is a smattering of several of them as correlated by Wikipedia...

A) In the Japanese health care system, healthcare services, including free screening examinations for particular diseases, prenatal care, and infectious disease control, are provided by national and local governments. Payment for personal medical services is offered through a universal health care insurance system that provides relative equality of access, with fees set by a government committee.

B) The Swedish health care system is a socialized, public health care system. It is informally divided into 7 sections: "Close-to-home care" (primary care clinics, maternity care clinics, out-patient psychiatric clinics, etc.), emergency care, elective care, in-patient care, out-patient care, specialist care, and dental care. A person seeking care first contacts a clinic for a doctor's appointment, and may then be referred to a specialist by the clinic physician, who may in turn recommend either in-patient or out-patient treatment, or an elective care option. All emergent cases are treated by an emergency department at a hospital.

C) Health care in Canada is funded and delivered through a publicly-funded health care system, with most services provided by private entities. Health care spending in Canada is projected to reach $160 billion, or 10.6% of GDP, in 2007. This is slightly above the average for OECD countries. In Canada, the various levels of government pay for about 70% of Canadians' health care costs, which is slightly below the OECD average. Under the terms of the Canada Health Act, the publicly-funded insurance plans are required to pay for medically necessary care, but only if it is delivered in hospitals or by physicians. There is considerable variation across the provinces/territories as to the extent to which such costs as outpatient prescription drugs, physical therapy, long-term care, home care, dental care and even ambulance services are covered.

D) Healthcare in France is funded by compulsory national insurance. Social Security in France is calculated as a percentage of income.Doctors and dentists establish private practices. Patients are free to choose which they visit. A patient is expected to pay and claim up to 85% of the cost from the state. France has a high standard of care. The health system was ranked first by the World Health Organization in 1997 and 2000.

E) Health care in Australia is provided by both private and government institutions. Primary health care remains the responsibility of the federal government, elements of which (such as the operation of hospitals) are overseen by individual states. In Australia the current system, known as Medicare, was instituted in 1984. It coexists with a private health system. Medicare is funded partly by a 1.5% income tax levy (with exceptions for low-income earners), but mostly out of general revenue. An additional levy of 1% is imposed on high-income earners without private health insurance. As well as Medicare, there is a separate Pharmaceutical Benefits Scheme that heavily subsidizes prescription medications. In 2005, Australia spent 8.8% of GDP on health care, or US$3,181 per capita. Of that, approximately 67% was government expenditure.

I chose these links because they open up ALL of the questions which we in the US must become familiar before making our "choice of a century". These show some of the benefits as well as the costs coming from national medical plans which are run and which are funded primarily by government taxation.. Bottom line which should not be missed by pawing at the details, is that in each of these nations, people live longer than they do here... For there, ALL have unlimited access to medical care.

Granted, it is incontestable that the citizens of those nations live longer. The real question now lies in how much does it cost them? Surprisingly for most, the United States spends more on health care per capita than any nation in the world. True, because of it our system does have some benefits. Therefore the real question at hand is for us to weigh the loss of those benefits against the gains brought on by increased affordability.

As of 2008, here is our track record: The World Health Organization (WHO), in 2000, ranked the U.S. health care system as the highest in cost, first in responsiveness, 37th in overall performance, and 72nd by overall level of health. Obviously if one thinks hard about it, concepts such as overall performance and overall health, are purely subjective... However, it should not negate the fact that our current for-profit system guarantees our position as number one in responsiveness.. Other countries in the top ten included Japan, Canada, and Sweden, in part because the study noted that those governments had also invested in enough infrastructure to insure that their patient's accessibility to health care was sufficient where needed.. For example, in some countries, health care accessibility includes a vast system of air ambulances....

As for filtering out cost factors, by removing the profit piece of 38% that is tacked onto every medical transaction occurring within the United States, other countries are able to provide services to their constituents for less... One method that is successfully used in other societies to keep their doctors happy and on board, is to link a physician's income to a single fee per patient. Whether one has a cold, or a gastric bypass, the doctor and nurse staff receive the same income per transaction... The fees in most of the nations listed above were set by regional districts, which helped account for those cost differences varying from region to region... Likewise because of those local boards setting fees, some form of petition was allowable for a physician to argue his case among his peers if he felt that the transaction fee for a certain medical practice was set too low...

There are many options out there to minimize costs.. Japan pays a 70-30 split. The government pays 70% and the citizen covers 30%. Sweden's split is 85-15. Canada is 70-30. France is 85-15. Australia is 67 to 33... But translated to US Dollars, the cost of health in each of these countries is still far lower than it is in the United States.. Japan spent $2908 per capita. Sweden pays $3149. Canada ($5170), Australia ($3181), and France ($3374) which are cheap when compared to the United States per capita health cost ($7900). So where does the difference go?

Courtesy of ADECRI (Right Click for Larger Image)

In the words of the National Coalition on Health Care: "Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families." Despite arguments to the contrary, when one looks at the magnitude of cost between our private health systems and those of other government-run health systems, the bang for the buck is simply not there. Anyone who argues otherwise should be suspected of trying to protect his lucrative piece in America's health care system. For every piece of evidence we now have, shows our system fails at delivering quality health care at reasonable prices, whereas other systems... do just that...

Cancer rates? How does our nation stack up against others when it comes to surviving cancer?

There is good news there: the national cancer rate has declined.. "“The significant decline in cancer death rates demonstrates important progress in the fight against cancer that has been achieved through effective tobacco control, screening, early detection, and appropriate treatment," said Centers for Disease Control and Prevention (CDC) Director, Julie L. Gerberding, M.D. “As a nation, we must commit to continuing and enhancing these important public health efforts.” Again it was public (not private) health programs, that were responsible for creating this decrease in cancer... However across the board, cancer rates are higher in modern developed countries than in those which are poorly or undeveloped... Not to be shocked, really. Living past the age of 40 opens the door to quite a few strains of cancer that may lie latent but never become diagnosed in an inhabitant from an impoverished country who dies long before reaching that age, thereby improving that nation's cancer rate statistic in a rather sad fashion. So when measuring the incidences of cancer in many varying societies, those countries with better care and diagnosing abilities, tend to have higher rates of cancers... Meaning that if one goes to one's physician long enough, eventually some form of cancer will manifest itself....

Currently the US cancer rate as of 2004 (filed 2008 ) averages out at 970.1 cancers per 100,000 of our population.... But what really matters to us is our ranking in the number of deaths being caused by various cancers; the rationale being that a good health care system would have fewer deaths per segment of their population than one that was not so good... So based again on 2004 data, we see that the United States is ranked as the 9th highest at deaths by cancer with 321.9 per 100,000 people, compared to Australia (10th), France (12th), and Sweden (14th). Canada and Japan do not show upon the chart. Again, as for getting the most of our bang for every buck spent, considering that we are paying the most per capita of anyone for health care, we are not doing very well.

Our health system was touted by insurance companies during our last attempt to establish national health care, as being the best in the world... Unfortunately that was a prideful remark appealing to America's emotions, but had little relevance in fact... It has only been with the soaring of health care costs that corresponded with the time frame of the Bush Administration, coupled with a decrease in hospitalization caused by soaring out-of-pocket costs, that significant data has been made available to America's citizens making it known to them that this is simply not true..

If one take the statistic of "Percentage Of Life Lived in Ill Health > Female (most recent)" by country , one sees the United States is 6th... following Mexico(1), Poland(2), Turkey(3), Slovokia(4), and Hungary(5). Or that the United States ranks 2nd in child maltreatment deaths, or 165th in Tuberculosis treatment success. But when it comes to obesity, we are number one. Those nations with nationalized health care system treating their citizens to longer lifespans are ranked in obesity: Australia (6th), Canada (11th), Sweden (21st), France (23rd), and Japan (28th).

As expected, when it comes to catering to the wealthy, our health care system stands up fairly well. We rank number one in plastic surgery;

So without going too far off topic, one can see that the argument that states our United States health care is the best system in the world, has some reasonable flaws. It may be good for some endowed with lots of wealth, but when it is stacked against other systems and when one looks at statistics to make their comparison, our system does not rank well... A preponderance of evidence leads one to conclude that money can be saved by switching to a different health care system,... a system that is focused on prevention, and not on gouging the poor sucker who just happens to get sick. It is far cheaper to prevent a costly disease, than it is to treat it... In the United States' current system, private health insurers shy away from paying out for preventative health care items, knowing full well that the odds are that another provider will be the one who will reap the benefit of their current patient "who will not get sick"... Why should they whittle down their profit margin to enable another company "not" to have to pay out a benefit? Such is the logic in "for profit" health care.

Is there any other proof on this planet that preventative health care on such a massive scale can drop costs considerably? Absolutely. The graphic below (right click to see full image) shows how us humans have capitalized on prevention when it comes to making or costing us money when raising animals....

Courtesy of Journal of Dairy Research
(Right Click for larger image)

That last topic may have gotten us off track. For if you think back we were initially discussing the five options we had to deal with the problem of two entitlements: Social Security and Medicaid/Medicare. So far we have looked at the dismal picture of 1) keeping them as they are... (it doesn't work).. and 2) keeping both with some modifications.... As we looked, we have seen various modifications as methods of salvaging one or both of the programs... But if you have gotten a good grasp of the numbers, no doubt as we extolled through the changes that could help ease the financial situation in which we find ourselves, you gradually got the sinking feeling down in the pit of your stomach that none of those fixes would be enough...

In an all to familiar setting common to many Americans today, our listing of the options above was sort of like those hopeful scenarios and arguments being made just two weeks before one finds they are about to be laid off.. As soon as that event occurs, when they look back... they see that even two weeks ago that it was inevitable; they simply chose to hope at that time for options that were still open, and they still held out something would turn up to save the day... Then, ... came the pink slip. No one getting laid off in today's world was a being who was not needed. There was just no money left to pay them anymore.... Their output was fine; there were no moral, ethical, efficiency standards that caused the job loss... There was just not enough money to pay them.....

Unfortunately, it is the same with our entitlements. We are paying over $500 Billion dollars a year for each.... Their costs grow as Baby Boomers age, and the number of workers paying into their benefit pool shrinks... Just looking at the costs, and the inability of having the money to pay for it in the future, we need to wise up and figure out a plan...

This is the part of the solution that no one talks about... If you listen to David Walker, he makes allusions but never focuses directly on that question which "must not be named." Which of the two programs do we scrap... Medicare/Medicaid? or Social Security? Since I have no qualms, we're going there...

Getting rid of Social Security: Pros and Cons? Most of the literature on Social Security comes from the year 2005, just after Bush's second term began and he began to privatize Social Security.

Perhaps we should review what Social Security is? And how it's been abused?

Here is the argument against Social Security.... "The promise of secure retirements is a "hoax." Taxes paid by workers are "wasted" by the government rather than invested prudently. And "the so-called reserve fund ... is no reserve at all" because it contains nothing but government IOUs." Sound familiar?

If it does you must be at least older than 70. Even then... you would have had to have been just 7 years old when you heard it... It was originally uttered by Alf Landon, who was running as the Republican nominee against Franklin D. Roosevelt's second presidential term...

Social Security is a tax on employees. They pay part and their employer pays part. But it is still considered by all employers as part of an employee's compensation and on every financial statement it is included in a category listed under "labor". The government collects this employee tax and uses it to pay out pensions to those no longer working. Back when Social Security was created there were far more workers working, than retirees who were not... Solvency was not an issue. The government collected what was needed to then pay out....

But in 1982 under Ronald Reagan, Social Security taxes were accelerated to build up future funds in advance to pay for the bubble of baby boomers expected to retire by 2006. The plan authored by Alan Greenspan, sunk accelerated collections of SSA tax into government bonds in the Social Security Trust Fund. Government grew and income taxes went down financed by a long term debt obligation whose repayment horizon lay in the distant future.

Under Clinton, the force feeding of SSA collections into government began to be referred to as the Social Security Surplus. Clinton used it to pay down other national debt, rightly assessing that in order for the debt to the Trust Fund to be repaid, we would need a solvent government. Paying down the extra-Social Security debt and balancing the budget seemed to assure that the government’s indebtedness to the Greenspan plan could be serviced.

Given the apparent surplus created by the SSA tax it became impossible to resist the lowering of other taxes. In 2004 SSA collected $566 billion and paid out $421 billion with the difference of $145 billion going into the Trust Fund, that's 25% of all collected. Of that $145 billion... the Bush administration used all of it for that year's current operation of government. The gamble was done. Today we are faced with figuring out how we can pay back that money, lent to our government by the future retirees of the Social Security Trust Fund. The Republican gamble was devious: they never had any intention of repaying the Social Security trust fund...

Instead of reimbursement, we got a noisy push to privatize Social Security; in other words, remove Social Security from out and beyond the control of the government. By relieving the government from their responsibility of having to pay back the borrowed money from the Boomer's retirement, they could pay off a few benefits to those already in the plan, and quietly shut down it's operation by turning over the trust fund to investment bankers. This would continue to keep income taxes at low levels. We were using an accelerated tax rate on employees to fund a large portion of the government, and by liquidating the trust fund so we never had to pay it back, we could continue keeping wealthy corporate taxes at very low levels...

But as recent events have shown, putting a nation's pension solely in the hands of stock market investors and financiers, IS extremely risky. It is far better to put our trust back into the American people themselves.. So once again we need to decide whether paying BACK all that money we cut in taxes just to keeping Social Security solvent, ... is worthwhile; or whether we should abandon FDR's program as a dream whose monthly payments just rose too high.....

In the short term, abandoning Social Security would save over $500 billion a year. Up until this past year, that was more than our yearly national budget. It's abandonment would quickly bring us back to solvency. Basically it requires that America defaults on a loan it made to itself... which surprisingly is not as bad as it may sound. Really! It is not.

We do it all the time. It is similar to those who borrow hardship loans against their IRA or Keogh plans and never catch up on the chance to pay it back; they just get fewer benefits when it's their time to cross over... Or to those who borrowed low interest loans from their own life insurance policy yet never get a chance to pay it back; they just get fewer benefits when it's their time to cross over..... Or those who borrow loans from their parents and it gets deducted from their portion of the last will and testament; they just get fewer benefits when their parents cross over.....

So as long as there are other venues for covering the nation's elderly, especially those dependent on social security, we could default on that promise made and survive. Like those examples above, we just wind up with a less rosy future than planned... that's all....

So up to this point in time, all the tricks used to balance Social Security were based on moving money from one sector to another. But as the bill comes due, the revelation slowly dawns that the only way to guarantee that Social Security benefits get into the hands of retirees (both now and in the future), is through increased FICA or income taxes. It's the only solution that seems to make sense.

The Social Security Administration has numerous plans to mitigate the transition of the baby boomers into the future when fewer people are working. What they lack is control over the political climate that has trended toward naked politically conservative self interest in the last decade. The fix is to answer the question: Is Social Security worth it? Is it worth the gradual doubling of the FICA tax by 2060 to once again become a pay as you go system?

Is it worth the pain? A great question. Perhaps instead, we should switch now and look at the per-person dollars-and-cents cost of NOT raising the FICA tax and of doing away with Social Security all together... If one has no safety net of Social Security there to catch him upon retirement, he has no choice but to save for himself.. He will be in charge of his own retirement...

So how much does one save? Again based on 2004 figures:

According to the Bureau of Labor and Statistics, the median hourly wage of Americans is $13.01 or $27,039 per year or $2,253 per month. Half the population makes more and half make less. Federal taxes on that amount are $3,698. State taxes would be another $811, not enough to be effectively deductible. $3,698 plus $811 is $4,509. $27,039 minus $4509 equals $22,529. So the median take home pay is about $1,877 a month, excluding FICA. Since inflation will be factored into any savings plan automatically, it is not important to adjust the numbers for inflation. At the end of a savings plan, the amount saved will be nominally higher, but the buying power should be about the same. Say a person is very frugal and spends about $500 an month on rent, $195 on utilities, takes the bus to work for $30, $300 on food, buys clothes at the Goodwill for $15, has employer paid health insurance and no dependents, the person might be able to save $877 a month. After 40 years at 3% interest after taxes, the median earner could have $812,000. If a person manages to save $812,000 during his lifetime and retires, he could withdraw about $3,423 a month, at current interest rates, for 30 years before all the money was gone. Good for him.

But.... what if everyone else is doing exactly the same as is our little enterpriser?

Personal consumption being nominally two thirds of the economy,... its drop (by half) would shrink the GDP by a third. Savings (being done by everybody) would be so abundant (because no one was spending), that the total lack of demand (for borrowed money), would cause the local interest rates and prices to collapse. And the frugal individual above would probably lose his job and his savings interest would plummet to nothing. Or put another way, if people start being strictly responsible for their own retirement, it will cause as much or more pain to the economy than the raising of the FICA tax. For if you withdraw money out of the consumer part of the economy in the form of personal savings, it will probably have considerably more negative impact on the economy, than the collecting and redirecting money back into the economy through the raising of the FICA tax.

Or put another way, if we personally saved as much as Social Security takes out and received a 3% return on our investment, at retirement we would receive $355 a month. But, wait. Social Security gives us $937 a month. How?

They do it by absorbing the risk of hundreds of millions of people. Most people won’t live 30 years after retirement, but no one person can behave as if he won’t. This is the unsung beauty of Social Security, it is a giant lottery that you win by living longer than anyone else.

I should mention that other "beauty of Social Security": one that is certainly to be appreciated in these times of collapsing financial markets. Social Security is not a personal asset... You could be bankrupt; get completely wiped out: have nothing to your name. Social Security will still be there for you.. Unlike any financial annuity or mutual fund, it cannot be taken. It keeps paying long after your personal finances have evaporated over to negative numbers.

But the prime point in favor of keeping Social Security, is that it plays a big role in our economy. Were it to default suddenly, our economy would be (4.3% of our GDP) poorer... That loss would not hold at 4.3% of GDP. It would erode profits, jobs, and cash flow throughout our nation's commerce. It would be one more tamping of that brake pedal slowing down the nations' economy... Compared to that, the modest increase in FICA taxes (1.2%) even though it takes some money out of the economy today, would when cashed out, create a benefit 3 times its cost (4.3%), whenever it gets used at some point in the future...

Therefore, when seen over the entire length of its program, the removal of Social Security is more expensive than the cost required to save it, by a factor of three to one.

Which brings us to dissolving Medicaid/Medicare.... What costs or savings would that bring?

We begin with this ancient historical quote referencing Newt Gingrich, then speaker of the House:

"The Speaker says, ‘‘We don’t want to get rid of Medicare in round one because that’s not politically smart. We don’t think that’s the right way to go through a transition. But we believe that Medicare is going to wither on the vine,’’ again talking about section 1862 and talking about the Social Security Act, talking about Medicare. That is very debatable on this floor because that is a serious attempt to dismantle Medicare, Madam Speaker...."

Obviously getting rid of Medicare is nothing new.... but equally obvious (as one can glean from this description of just one little cut to North Dakota's senior citizens), is that any tweaking of the Medicare Plan that reduces any tiny fraction of a cost saving benefit, expends just far too much political capital to ever get done.

"To their credit, Sens. Kent Conrad and Byron Dorgan and Rep. Earl Pomeroy have resisted enormous pressure from the administration and have taken leadership roles in Congress to stop these cuts, (which) as planned, (will cause) North Dakota seniors to lose over $1.3 million in essential health benefits this year alone. Their joint letter warns they are "deeply concerned that high-quality skilled nursing care for America's seniors will be threatened - and reductions in spending of this magnitude would severely alter not only the quality of nursing home care, but also access to nursing home care for our nation's seniors." The letter also references AHCA's finding that the Medicare cuts will hurt the state economy and cause North Dakota to lose $2.7 million in total economic benefits and $1.29 million in lost wages."

Do you see the problem? All that was over the impact of just $1.3 million, (million as in "m") dollars of cuts made to just one of fifty states. A paltry $1.3 million dollars... out of that year's medicare budget of $560 Billion (with a "b") dollars, amounting only to a national percentage of 0.000002.3%. As someone once said, if the government gave away free cars, then stopped the program in mid tracks, it would be impossible to argue that free cars were not necessary for the country's survival... Even though we survived for how many years without them?

(Editor's note: a free $20,000 car per household would cost this nation, assuming the Bureau of Census estimate of 113,568 households for 2009, $2.27 Trillion dollars.)

Thus it becomes readily apparent to any savvy politico, that cutting back on entitlements piece by piece, line by line, is an impossibility... Because of that, I am afraid that therefore, it makes more sense to scrap the entire program entirely... (it takes just as much effort as the cutting out of $1.3 million dollars) or ...raise the revenue to continue paying for it ... as it currently is..

If we scrap the entire program, we are saving our government $560 billion a year. But in doing so we are taking the health care industry off of it's $560 Billion dollar life support. Yet while doing that, we are simultaneously saving American taxpayers close to $560 Billion a year in payroll taxes... So if one looks at the entire system and sees it as a giant circle, one can glimpse that there is no net gain or net loss to the system that comes out of eradicating Medicare... All we are doing with the Medicare cut, is to interrupt the shuffling of money away from the economy back to the economy..... bypassing the circuitous route that takes the money away from the employee and hands it over first to the government, and from there through the medical profession, where it is then matriculated down to those making their living from the medical field, who then go out and return it back to the economy...

But this is where details matter. Let's say we stop Medicare immediately... No more taxes. No more reimbursements. Retirees who organized their work lives counting that Medicare would be there for them, do not see the benefit of no longer having Medicare deducted (1.5%) from their pay checks. Yet upon visiting their physician, they are still required to fork over their entire fee with no deductible. Likewise a young 20 year old with no thought of ever going to a physician, would receive his 1.5% weekly tax cut, and never notice its difference... At a wage of $8 dollars an hour, his 30 hour week gives him a tax cut off his $240 weekly gross amount... of three dollars and sixty cents...most of which goes towards the paying of his Verizon bill. No new spending gets created... But to those few still earning $250,000 a year, they in turn get an additional $3750 to play around with (whoopee).... Which gives us...the moral equivalent of having someone who does not need an additional $3750 (whatever) pocketing the difference while someone older dies from being financially cut off from their medication... The impact on who is affected, greatly distorts the circular argument that no ill effects occur.

That is the problem with all previous talk of dissolving Medicare/ Medicaid entitlements.. Discussion gets focused on what is fair, and no one ever gets to discuss what is it that we can afford..

The total amount of money, both public and private, spent on Health Care within these United States is..... $2.26 trillion. That includes a 6.1% jump over last year. Medicare grew 7.2% to $431 billion; Medicaid grew 6.4% to $329 billion; Private spending grew 5.8% to $1.2 Trillion;

Our first step would be to determine that exact line where Health Care becomes "not affordable". Once we determine that line, we chose not go over it.. The year 2000 was a very good economical year... If we choose to use that year as a base, we see we spent 13.7% of our GDP back then on health care... Since that seemed to work ok, and until we have a better target, we will let that be our benchmark percent... That means in 2007, our ideal health-care cap (13.7% of 2007's GDP), should have been at $1.9 Trillion dollars. If so, since we actually spent $2.24 Trillion, we are up $0.34 Trillion dollars over where it should have been, had we kept that line of our budget at target.... So how does one trim $340 Billion Dollars off of our entire nation's medical expenditures...?

To find that out, we need to first take a look at the roots underlying this question: Why does the United States spend more than other developed countries on Health Care? I can think of three possibilities.

One, is that we are sicker than citizens of other nations. Two, considering that as a nation we are rather wealthy, is it that we seek medical attention much more frequently than do other developed nations? And three, is that our prices for the care which we do seek, are higher when compared to those of everyone else?

Obviously we are not sicker. As a nation, we score well on health. If you examine our health by looking at 130 diseases and charting the incidence we have of those among our population, ....we do rather well.

Secondly, we actually seek medical attention far less than our developed world counterparts.. As this chart shows among civilized nations, Americans actually visit their doctor less per capita than citizens of all other such countries, except for Greece and Mexico.....

Therefore our high expenditures must come from the fact that our prices are simply too high...

McKinsey analysts estimate that, even accounting for more consumption of health care services due to our higher income, the U.S. would spend half a trillion dollars less than it does currently if its medical care prices were comparable to those in OECD countries. Such a reduction in spending would reduce our overall spending on health care from its current level of 16 percent of GDP to 12 percent of GDP.

There you go. In a nutshell, that seems to be the direction we need to pursue... The 12 percent estimate mentioned above is below our target of 13.7% of our GDP. One might expect that as the cost drops, the quality of American health care would increase due to its being more accessible and more affordable.

So how do we drop costs?

There is only one way. Remove the for-profit component deeply rooted in health care from out of the equation, and treat health-care as we do an obligation similar to how we promote commerce, build new infrastructure, and educate our children. In other words, put it under "the people's" management, meaning government control.

As mentioned above, what works in other nations is the charging of flat fees for each visit. However, to keep physicians from milking the system by returning patients back to their office again and again (the auto repair shop syndrome), an incentive should be placed that tips the will of the physician more towards getting the problem correct on the first try... One suggested method is to reimburse a physician full price for their patient's first visit, 50% for the second, and 0% for each visit thereafter for the same condition.

A second factor that helps suppress medical prices elsewhere, is the stability that comes from having these prices set by regional boards of the physicians themselves. Since it now will cost the same to go to either Doctor A or Doctor B, if Doctor B has a better success rate, his wealth should increase at the expense of Doctor A... Over time more patients will choose him because of his success. They want to get well faster.

A third factor that suppress prices, is the simplification caused by already having prices preset, and payments quickly transpired based on a simple transaction. American physicians' largest cost is in obtaining payment. Large staffs are required to deal with a myriad assortment of insurance coverages, none of which have the same requirements. Often it is the physician's office worker who must themselves become the expert of each individual patient's insurance coverage; they must do so in order to advise the patient of that patient's most cost effective options....

But, ... if a physician sees 100 patients, and gets $75 dollars per visit, his take that day is $7500. Simple. That extra amount previously charged to pay those massive office staffs, which were required to achieve an 80% recovery, is no longer required.

The CDC estimates that 1.1 billion doctor visits were made in the United States last year.. At a per visit charge of $75 dollars, the net cost ( 1.1 billion X $75.00) equals a meager $82.5 Billion dollars.

So if the government were to begin tomorrow to supersede all current private and insurance payments now covering medical costs and simply charged $75 dollars per visit,.... for a cost less than the AIG bailout, all American medical visits could be free of charge to the patient, and cost the government $82.5 Billion dollars.

As a rough guide, the outlays for Medicare in 2007 amounted to $374 billion dollars which were spread among 43 million participants. The per person average spent on Medicare in 2007, then was $8697 dollars. If an average person went to a physician 4 times in one year, as research by the CCD subscribes... The average visit's charge would be $2174 dollars.

Of course we are comparing apples to oranges here, for the total outlays cover everything from prescriptions to dialysis... However one can still compare cheap apples to expensive oranges and make a selective choice.. But the primary reason our health care is a higher percentage of our GDP than any other civilized nation, is because our prices are just simply way too high.....

If on top of everything we pay today,.... we were add an extra payroll deduction for government paid doctors visits, nationally, $82.5 billion dollars divided by the number of American taxpayers (138 million), would cost each American taxpayer $597 dollars on the average each year... Per week, that amounts to $11.48 dollars....

So if we assess every American worker $11.48 a week, every American could then visit a physician, either private or in a hospital room, cost free. This does not aggravate the deficit; it is a pay as you go plan. This illustrates the cost savings available to us if we ditch our current system of for-profit medical care.

I don't know about you, but this saves my household $6500 per year..... How much does it save yours?

As we can see, both entitlements have benefits. Both are extremely costly... But if cutting one entitlement is absolutely necessary, the least damaging one to disappear is that one funding Medicare and Medicaid.. As we previously saw, eliminating Social Security as a government funded pension, impose an additional economic cost that would hit us with another three dollars for every dollar saved...

However eliminating Medicare, or replacing it with a different system of nationalized health care, such as the one above which bypasses the "for-profit" motive behind today's health care industry, can be done cost effectively while at the same time it improves the health care availability for everyone...The idea of replacing Medicare with a form of nationalized health care based on a per person fee scale, would drop our nation's amount spent on Health care to a level below our targeted 13.7% of our GDP.

The facts speak for themselves... Eliminate $374 billion. Replace it with an $82 billion plan under which all basic medical care is covered at no cost to the patient. Preventative health care can and will be available, enabling American citizens to take care of small problems earlier before they become costly boondoggles creating a personal financial crises.... No more will large numbers of American have to forgo getting a filling put in their teeth because of financial hardship, and then have to go deep into debt for that root canal over which they have no other choice but to get done... It could have been prevented for only $11.48 d

Chapter 9: Bright Spots And A Tax Check To Spend

kavips — Fri, 17 Apr 2009 14:42:33 EDT

Even in the direst storms, it is nice to know the sun is burning 93 million miles away.... -- kavips

Despite the gloom there are some exciting bright spots in our current mess.

One, we have proven beyond a reasonable doubt that privatization of Social Security is a very, very, very, very bad idea. That argument, shown by today’s events, is now not only proven to be inane, but extremely dangerous. As briefly mentioned in the last chapter, Social Security whose purpose is to provide our nation with a safety net should the unthinkable ever happen, is the only plan that survives global economic meltdown. For it is funded (as is a ponzi scheme) by newcomers entering the plan and contributing their money. Privatization plans based on savings and investment can make no such claim of constant solvency. So despite all the problems caused by today's global meltdown, its economic trauma should keep Social Security safe at least through three more generations, ie. those who lived through these trying times and saw Social Security's benefit with their own eyes.... Anyone foolish enough in the near future to bring up Social Security privatization will over that span be met with a chorus of "uhh...Remember 2008".

Two, we are now given unlimited opportunities to fix long term problems that before seemed insurmountable under the old system, because back then….. we had to play by “old rules”. One of those old rules was that Medicare and Medicaid were here to stay. As mentioned in the previous chapter, replacing Medicare/Medicaid with a national insurance reimbursing physician's visits, opens the door to getting one costly entitlement out of way and replacing it with a less costly but far better service.....

Three, today, the collapsed economy because of its severity, forces us into a massive Keynesian economic expansion unrivaled since World War II.. The huge impact of that last expansive episode took us 17 years to get our tax rates back to normal. But because of that wise investment we made back then, the global economy got fixed, which then went on to provide a remarkable 60 years of unparalleled growth and low risk. We can be assured that tax rates will remain extremely high for the next decade in order to pay back the deficit we just recently incurred by cutting them.... And that is a good thing.

Four. It is hard to raise taxes. But that is exactly what is needed. Wealth is good for a society only as long as a portion of it is invested back into to real people, real jobs, and real things. Rewarding the pursuit of "virtual" wealth caused by placing "bets" on rising or falling values may be fun, but leaves no lasting collateral once the fun runs out.... Taxes, on the other hand, serve the noble purpose of recycling money down to where it does its best work... I know, I know; arguments have often been made to the contrary, but today we actually see results; ones we have rendered from following the tax cutter's plans. Unfortunately today's economy and events have proved once and for all, that despite the copious amounts of hot air once spouted aloud about their potential, their "cutting taxes" hypothesis turned out to be nothing more than simple "voodoo" economics after all...

But fortunately because of today's crises, we can again responsibly raise taxes on the wealthy and again fortunately for all (especially the wealthy), return this nation back to real prosperity. (Editors note: For fun, some snark is embedded above but in reality we will be only talking about the increase of a measly 5%).

Likewise for five, today's crises gives us the opportunity to expand government. Some say that is bad... To them, I say "oh, no, that's not what bad is... Bad is when you lose 50% of your retirement in 2 weeks because funding was pulled from the regulatory agencies responsible for monitoring the markets. THAT'S BAD!" There may be a point in the future where government does again get too big and too intrusive; but that time is not now... We are now at the point where if our government can't save us.... there is absolutely no one left who can... Our world is deep in a WWII-mode crises all over again; where only the United States is big enough to mount the adequate defense and then initiate a future counter attack...

Six. Over the past 8 years, it became obvious that our infrastructure most definitely needed reworked. This crises gives us the opportunity to fix it; for now, "progress" will no longer get tied up with cries of "over-spending"... Today's crises put that argument far, far behind us now... We are now more concerned with getting projects moving forward in the least wasteful manner possible. To our chagrin, it would be pure irony if the winning party that won by chastising the past administration for wasting "so much money" on "their pet project", were to open themselves to the same criticism, by recycling "the past administration's argument" in order to justify their "pet project's" waste of money today..... Putting every expense on line will solve it.... Just as we recently discovered our bailout money going towards a corporate jet... having the ability to sniff out corruption in short time, will over the long term, give us the trust we need to get things moving forward quickly... We desperately need that trust in order to be effective; the quickest route to achieve it.... is openness.

Seven, we have historical accounts of what did and didn’t work during a previous Great Depression and we have at our finger tips a vast information system, allowing anyone to bring forward the next “great idea” which just may turn the tide. This epistle is just one example... The tried and true proposals prescribed herein are options that have been researched against the past economic downturn, and have therefore been tested in real time. The novel solutions incorporated herein were built out of questioning why the American economy of the 1930s took so long to recover... and what eventually caused it to grow. These theories may be untested by time, but then... so is every new idea. At their core however, they hopefully have enough historical data to sway even the most skeptical towards implementing their solutions...

The greatest lesson taught by the Great Depression is that "time" is our greatest foe.. Waiting, or allowing things to break up completely before beginning to rebuild from the damaged pieces, means we live squalid lives for decades. Rapid fixes and follow-up solutions will make our lives more enjoyable... We can deal with the long term problems later. But 1933 tells us we needs to jump start it now...

The second lesson that Great Depression teaches us is that change is hard to accept. Even after receiving a mandate for change as did our current leader, FDR still tried to win over the opposition party... It was to no avail.. Eventually he scrapped his attempts at conciliatory moderation as it became obvious that they would oppose whatever he did. Still under the sway of the capitalist's philosophy that had ruled the previous decade, Roosevelt himself was guilty of inching far too slowly towards implementing direct government involvement. It took an upcoming war to finally sway him to embrace the direct injection of government borrowing into the economy on a massive scale. That made the difference.

Recently the U. S. House of Representatives voted 244 to 188 to pass the Economic Stimulus package; and every Republican lined up against it... As an observer of history it is interesting to note that the same Republican party made exactly the same political error during the Roosevelt's first term, virtually guaranteeing a one party system over the next 14 years... It is somewhat sad to see history repeat itself... Republicans, apparently are neither familiar with history, .....nor the internet.

Eight, we have at the top of our government, an extremely gifted group of individuals who are charged with bringing major changes to bear in their respective areas. It would be hard to note a more talented cabinet thorough out our history... ( I can maybe think of perhaps two...) Perhaps we should thank the economic crises that brought this group together.. With current challenges being great, political differences were put aside in the interest of saving our country. Our past president's litmus test was loyalty. This president's.... is expertise. There is great deft of political instincts now surrounding this president, as well as expert wisdom, unparalleled in recent executive branch appointments. It's ability to listen and think, seems to become the defining character trait we will forever associate with this administration..

Nine, we finally have a Congress working in sync with the Executive Branch in order to pass the necessary changes required by today’s events. Thanks to the American people, we were not given a stalemated Congress... Truly, the American people deserve their lion's share of credit for making quick progress possible... It was they who ascertained that the "right president" backed by the "right" party in Congress, would be the only solution to move this nation forward. Yes, they can change their minds in two years.. but for now when timing is at its most critical, our two branches can work in sync as they were designed to by our Constitution. The antique politics of loyal interference, received a big thumbs down by the American people on November 4th, 2008. The voters were wise. Thanks to the American people, we are given a two year window of opportunity to right our ship of state, repair its structural damage, and unfurl its sails once more to set a course for greatness not even fathomed back in the August of last summer.

This economic cloud does indeed have its silver lining.

But.... sometimes.... just the opposite occurs. We see the silver lining.... and forget the dark cloud lurking underneath.... Today there are several proposals working their way through Congress which could cause harm even in their attempts to brighten our financial landscape.

One is a tax check to spend at will, ... most of which will go to pay bills in order to stave off bankruptcy and will do nothing to generate either new manufactured products or new services.

Here it becomes clear just how far removed contributing authors to main stream media publications are from the reality that pervades the livelihood of everyday Americans.

Mr. Lindsey, a former Federal Reserve governor and assistant to President George W. Bush for economic policy, is president and CEO of the Lindsey Group. In a piece written to the Wall Street Journal, he uses this statement to demote the economic stimulus package that was dissed by every House Republican...

This bragging about $1500 dollars, shows us they don't grasp the scale that's needed. The manager of my almost empty hair salon does... Her plan is exactly the same as Lindsey's, but adds an extra zero. In her words, "if they would just give us $15,000 dollars to pay our debts, the economy could be rolling in 30 days."

That's the need... Sure, anyone desperate for cash will take one tenth of it, or $1500 dollars, for it will buy some time. It won't create a turnaround in the economy, especially if a person is unemployed and not working. At best, the one tenth we receive will keep us from dropping..."as much.."

(Giving $15,000 to every American household irregardless of income level...at 117 million households: costs twice the Iraq War: $1.75 Trillion.)

But Lindsey's plan is really aimed at providing bonuses to his base (business interests) . For if you read the details under his plan, they too will get $1500 payroll tax deduction for every employee. Have 10 employees? They just got the $15,000 that you said you needed. His plan sucks money out of the economy; it does not put it back.

Remember this: no business has to make money in order to survive. They just have got... "not to lose it". On the other hand, working people DO have to make money in order to survive. For them, just "not-losing-money" is not an option that they have.. Whenever money is given out to any business, the benefit is political, not economic. Our economy is not bettered by corporations or companies making excessive profits. In fact, as one can see from the "Roaring Twenties", the Reagan/Bush1 years and the Bush 2 years, excessive corporate profits are just the symptoms of a swelling bubble that inevitably bursts spectacularly. We've seen it three times; just before each time, corporate profits soared. On the other hand sustained long termed growth as accomplished by plans formulated during the Eisenhower and the Clinton years, forces corporate money thorough fear of higher taxes back into the companies themselves, in order to hide their profits from being taxed. That re-investment created jobs, which then created more demand for goods and services, which created more re-investment, which then created more jobs, and the economic circle begins climbing.

One must remember that there are two kinds of investments. One, is investing in the building of a manufacturing plant or service industry that employees people... The other, is simply making bets that certain stock certificate will rise in value... One adds money to the economy, causing the economy to grow. The other, is "virtual". It does not affect the GDP. It does not create jobs. It has as much effect on the economy as betting on a horse.

For the recovery, if it is to happen, hinges on jobs. We need people who buy things. Giving loans to those at the top, for example a corporation like Macy's in order to keep that brand afloat, will be wasted because those who do the buying, are the ones who still won't have any money... Therefore in principal, if we are going to borrow a full $3000 dollars to give to every employee, in order to increase their spending which we hope will generate growth, it only makes sense to put that full $3000 directly into the hands of that employee. Splitting it 50/50 with a business dilutes its impact by half.

Republicans bet. Therefore their policies always help out those who play and bet with them.. Democrats don't. They work. Therefore their policies always help out those who work hard with them.. That is an over simplification to be sure, but if you are approaching this issue for your first time, this simplification gives you some insight and structure into how each party's actions correspond directly to their supporter's motives.

Now back to having a tax check to spend.... Didn't we just have one of those? Someone once said that insanity is doing the same thing over and over again and each time expecting a different result...

Has anyone ever thought of looking at the economic data from last summer and seeing what it's net effect was then, then modeling it on what impact it might have on today's economic situation?

What, no?

Well, now might be a good time! The stimulus of last summer was largely saved or used to pay down debt, despite George Bush imploring us to spend it as fast as we could. What was an annualized stimulus of 3% of GDP in the second quarter -- which is quite large -- only kept GDP growth positive for 1 quarter.

Considering the past quarter, it's long term effects were nil. Its impact on savings were wiped out. It's impact on debt was inconsequential.

As we see from these results, the Economic Stimulus Plan did little but raise the 2nd Quarter GDP 3%. After the funds were used, the collapse continued. All a stimulus plan does if it is not big enough, is buy three months of time...

We need something much bigger. Here is why. In November the average credit card debt alone amounted to $8320 dollars per household. Dropping a measly $1500 down off your credit card bill, will unfortunately, accomplish as little for the economy as if one dropped zero $0 dollars down. For if you still owe, ... you still owe... Your minimum payment stays the same. The economy does not improve if everyone's average debt drops from $8320 down to $6820. In fact, the economy actually gets hurt by those banks dependent upon the monthly 1.5% interest. Under this scenario, they lose (per household) $22 dollars in interest. Times twelve months this drop in income costs banks $264 dollars and if every household were to apply their stimulus check to their credit card bill, the yearly net loss to the banking industry would amount to 30.9 billion dollars; right at the time we are throwing money at them to keep them solvent.

The concept of stimulating the economy with a tax rebate is principally flawed. It is extremely flawed when consumer confidence is at an all time low such as it is now.... Tax cuts work only if the consumer spends all the extra amount that they receive. If the check just gets signed over to a bank, either in the form of an increased savings account... or of paying down debt,.... it doesn't really help the overall economy.

But one would think so however. After all, with that much money available to be lent out, the supply cost for credit should drop, causing the price of credit to inch downward, thereby increasing the volume of it that is bought and used... The increased borrowing should in principal eventually spur the economy forward....

Aye, now here's the rub.

If everyone is afraid to borrow because of sagging consumer confidence, the money just sits there. It does not get lent and there is no resulting positive impact upon the economy. Businesses have no customers and won't borrow; at this time they certainly do not need to invest in new plants and equipment (which is why they need a tax cut least of all). Likewise a consumer who anticipates losing his livelihood, won't spend and will instead, salt away every bit possible to enable him to survive should that happen.

The only people who will benefit from a tax cut and rebate... are the poor who live day to day.. Give them even a little money; it is spent that day. Unfortunately most of the items that they buy come from China, so the tax cut spurs little domestic manufacturing on these shores.

Realistically there are only two things that actually make the economy grow: population growth and gains in productivity. The former carries a lot of costs; the second is the only real fountain of prosperity. Tax cuts do absolutely nothing to aid our productivity.

On the other hand making a choice to use that money for infrastructure spending, for example rebuilding that I 35 bridge across the Mississippi, does increase efficiency by causing products to move faster between two points and actually does something solid to improve productivity.

For a tax cut to work, it has to spur consumption. The last one didn't and now that consumer and business confidence is even lower, obviously, this upcoming one will not either...

As mentioned earlier, those touting for the passage of a tax cut stimulus check, are not really looking out for the average American's interest. Other nefarious motives must be lurking behind their support for the receipt of a stimulus check in the mail....

For if they were truly concerned about our welfare, instead of wringing their limp hands over tax cuts, they should be working together to come up with something serious that eliminates our debt.

Change This! Gramma Willi's Wish List for Making Change

Gramma Willi — Fri, 17 Apr 2009 09:08:53 EDT

Original Title: Change This! My Wish List for Accomplishing the Changes We Need By Gramma Willi

Note: I am re-posting this because someone deleted the old one.

It is wonderful to have a chance to reach you. I am known in some circles as a legendary activist. This means that many of you will not have heard of me; to those who have, I pray that you find good ways to share truths, good analysis and facts with the next generation of legendary activists.

Here's my wish list for accomplishing the changes we need:

1. Find a way to value the contributions of legendary activists. It is not enough to solicit our ideas and opinions and simply run away with them, to apply without the benefit of proper context and analysis. Activists are not enemies - they tend to be wise, giving and in need of a thank you every so often... a nice contract now and again would be even better.

2. Place the long term health of the people and the natural environment that we depend on at the top of all priority lists. Long term means the next 7 generations.

3. Always plan for peace - including economic plans. We have to get away from war economies.

4. Move away from reliance on fulltime staff as decision makers for social institutions. They poison social programs because their main priority becomes their personal financial health and not the success of the programs. The best staff will include putting themselves out of a job as their main priority, because this will mean that the goals have been accomplished. The best staff will never undermine volunteer Boards of Directors or Citizen Task Forces.

5. Fire the architects of the failed economic system and their cronies. Replace them with the people who have been predicting the collapse and offer well-thought out constructs for designing our emerging social economy.

6. Find ways to value legendary activists - you will find the best friends of humanity among their number.

All My Relations, Gramma Willi