Posts Tagged ‘ U.S. economy ’

Raise the debt limit

This video illustrates the analogy I made a few weeks back.  Republican or Democrat, you should watch this video all the way through.  If you are an elected official please watch it several times.  Better yet, watch it until you can recite the lines before they are spoken.  I want you to understand the mess you’ve created and refuse to get us out of.

The numbers

At the end of the video they display the numbers.  Lets take another look:

Total Household Debt:     $140,000
Household Income:          $21,700
Household Spending:        $38,200
Additional Debt*:          $16,500
Amount Cut:                   $385
     -about 1% of the total budget

This chart dissolves to the U.S. situation:

Total Federal Debt:  $14,000,000,000,000
Federal Income:       $2,170,000,000,000
Federal Spending:     $3,820,000,000,000
Additional Debt*:     $1,650,000,000,000
Amount Cut:              $38,500,000,000
           -about 1% of the total budget
* The video incorrectly labels this as “New Debt” it is not the new debt as that would equal Total Debt + the requested debt limit increase, I corrected this value in both charts.

Understand history and maybe you’ll avoid repeating it

Now pick up a history book on the French Revolution.  Every elected official in modern America should become very conversant on this topic.  France in the late 1780s was a nation with run-away debt, loose adherence to and even antagonistic attitudes toward religion.  This resulted in a revolution rooted in atheism, dissatisfaction with the government, economic collapse, and a government unable to control or change its course.

The result was a terrifying holocaust unlike any before and was unmatched until a similar economic collapse thrust a certain angry Austrian to absolute power over the Weimar Republic.

When there is a total financial collapse, society will also collapse.  The arrogance that always leads to this result is the attitude, it’ll never happen here.

Keep forcing our unborn grand-children co-sign the loans and the result will someday either resemble France, 1794, or Germany 1933.

15.2 TRILLION and there ain’t no stopping us now

January 9, 2012 was a historic day in America.  It came and went without much notice in the press or by the millions of Americans affected.  Without Congressional approval, without a vote, without a whimper, the debt limit was automatically raised and the national debt became a record 15.2 trillion dollars.

The new debt number exceeds the total Gross Domestic Product of the entire nation,* which was $15.176 trillion in 2011.  As Americans we should be outraged.  We should recall and impeach all our elected officials who silently approved.  But will we?

No.  Most Americans don’t even realize the danger.  Most won’t care until collapse is imminent.  Then just like in Greece, riots will erupt and people will be confused wondering why they never saw this coming.  I’ve been predicting this since 2004 and writing about it here since 2008.  People smarter than me have as well, but no one listens.

Would you like some fries with that?

Some with shallow understandings of macro economics argue, “it’s a harmless debt, we owe it to ourselves.”  That’s like walking across the Sahara without water and saying, “But it’s a dry heat.”  Nor is it unlike a 900 pound man claiming the extra 1300 calories in the Monster Thickburger won’t make a difference in his 20,000 calorie per day diet.  In both examples the result is the same. Continue reading

So much time, so little honesty

So much to say

I have a few different points to make in this essay. I’d love you to read them all but I’ll list them here and you can decide. If you’re left-leaning I encourage you to at least scroll to the “The spending issue.”

  1. History shows a lot can change in 15 months – don’t count Obama out yet.
  2. Facts are stubborn things.
  3. The best defense is a good offense.
  4. The spending issue or why my boss and banker are terrorists.

Continue reading

More proof on how to grow an economy, not that ideologues will care

The President, the media, the CPUSA, the Democrats, and all their bleating followers do not seem to understand basic economics.  They don’t and they don’t want to.  Their own logic and emotional response trumps any facts one might present.  As one of my liberal friends once said, “It just makes sense, if the government needs money they must raise taxes, it defies logic that lower taxes could result in more government revenue.”

But of course he meant other people’s taxes needed to increase, not his.  All the facts in the world about how people are less productive, take fewer risks, hire fewer employees (who in turn would have paid taxes), hide their money, invest outside the high tax areas, or leave high tax areas, all of this was illogical or was simply dismissed as untrue.

Here is yet another case study.  High tax cities saw population reductions and slow growth.  Low tax cities saw population growth and the healthiest economic growth in the United States.  More growth, especially in personal income and increased employment mean more tax revenues for all levels of government.

Here is an excerpt from a paper you really should read.

Why Some Cities Are Growing and
Others Shrinking

by Dean Stansel
 

Over the last three decades, large cities like Pittsburgh, Detroit, Cleveland, Buffalo, and Toledo have seen their populations shrink, while areas like Houston, Atlanta, Dallas, Tampa, and Phoenix have seen their populations grow rapidly. Examining the policy differences between high-growth and low-growth areas can provide evidence that may help declining cities reverse their fortunes.

In 1980, Austin, Texas, and Syracuse, New York, were roughly the same size. The Austin metro area had a population of about 590,000, and the Syracuse metro area had about 643,000 residents. By 2007, Austin’s population had increased by more than 1 million while Syracuse’s population had been stagnant. That same disparity exists when one examines the growth of employment and real personal income. Another disparity between the two areas is the tax burden. State and local taxes accounted for nearly 13 percent of personal income in Syracuse but only about 9 percent in Austin.  Although there are numerous factors that can influence the growth of individual economies, one finds a consistent relationship between low taxes and high economic growth in metropolitan areas, in states, and in nations.

This article details that relationship between taxes and growth for the 100 largest U.S. metropolitan areas. In the 10 highest-tax metro areas, the state and local tax burden accounted for about 12.4 percent of personal income. In those same areas, population grew by 21.3 percent from 1980 to 2007, employment grew by 40.1 percent, and real personal income grew by 75.5 percent. In contrast, taxes were only 8.3 percent of personal income in the 10 lowest-tax areas.  The economic growth in those areas was much faster. Population grew by 64.4 percent, employment by 107.6 percent, and real personal income by 157.3 percent.

The contrasting experiences of Austin and Syracuse occurred in countless other areas as well. This article provides 14 additional examples of pairs of metro areas that had similar tax and growth patterns.1  The experiences of all 15 pairs of metropolitan areas provide valuable lessons for distressed areas everywhere. Keeping tax burdens low appears to be an important ingredient in the recipe for economic prosperity. If high-tax, low-growth metro areas like Detroit, Milwaukee, Buffalo, and Syracuse want to be more like high-growth areas such as Dallas, Tampa, San Antonio, and Austin, they should lower their onerous burden of taxation and bring spending under control.

For the entire article click here.

Barney Magoo, er Frank

Enough said.

Health Care costs driving US Debt

I’m going the reprint the CBO Director’s blog verbatim.  I want you to notice the importance of Health Care costs to the exploding federal debt and how the trend is projected to skyrocket.  Not unlike Al Gore’s global temperature “hockey stick.”  Wednesday he reported federal spending on health care programs had hit 5% of GDP and are rapidly rising.  Is this alarming to anyone other than me?

I anticipate many will say, “this is why we need Obama’s national health care.” To which I respond, “this is why we don’t need another entitlement program.  Fix the ones we currently have.” Obama’s new entitlement will eclipse the projected budgets of Medicare and Medicaide combined.  Why?  Because it is an entitlement. Attempts to control spending will likely result in serious rationing, as doctors exit the field, demand increase, and limited benefits.  Public outrage will likely force a loosening and costs will skyrocket.

I have a theory that part of the reason American health care costs are so high is due to European cost controls.  Companies shift some of that cost to locations with less controls and more disposable income. Continue reading

Democrats defy logic and the public

At least we see people are starting to get it.  Unfortunately, the administration looks at polls and dismisses them.  They are undounted.  Let’s review:  Health care that will raise a family’s health insurance cost while at the same time requiring that coverage under penalty of prison is not welcome by the American public.  The administration and the leadership in Congress flip America the bird and push harder.  Global warming is revealed to be a hoax complete with intentionally destroyed data and explicit written evidence of number tampering.  Does the Administration pause and investigate?  No they defiantly press harder, seeking an international treaty that would crush what’s left of American industry, impose a global tax on Americans, then pour salt on U.S. industry by announcing CO² a hazardous waste to be regulated. Stand-by for the breathing tax, trust me it’s coming. Meanwhile unemployment remains in the double digits.  Does any of this create jobs for Americans?  Not really.

I’ll give Obama kudos, he does not craft his agenda by following polls.  President Clinton seemed obsessed, chasing  polls, however Obama seems obsessed by ideological fervor.  I’ve heard him called an empty suit and while I have not come to any solid conclusion on that, I doubt it.  I do believe he is a front man for greater powers, but I think he is completely in line with those who sponsor him.  He has a clear agenda to socialize America.  He was raised and mentored by communists, by his own admission he chose to associate himself with radicals and communist professors while in college, why then should it surprise anyone when his administrative agenda is aggressively socialist?

I’ll answer that.  I believe it is due to two things.  Continue reading

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