Its one of the things that we accept but don't like, taxes.
Running on a platform that promises to reduce taxes is almost always better than using common sense and saying you might have to raise taxes.
Taxes are too high is the most common comment people make about them but what should we cut is the general problem.
So we cut taxes and increase spending, which is after all a recipe for ultimate disaster.
The real question should be what do we want and how are we paying for it?
The Government is unable to meet its annual obligations and has to borrow every year just to keep running.
To fix this you need either more income or less expenses or a mixture of both.
You might argue that we should eliminate waste, fraud and become more efficient, and we should, but that is not solving the budget problem.
We are also not solving it by ignoring the big ticket items and reducing small (at least by Government standards) programs.
This is complicated by the sacred cows we have, the untouchables, so to speak.
I don't want to ignore growth, since growth reduces certain expenditures and increases taxes without increasing the tax rate. However we are not going to see enough growth to fix our problem, and eventually, our problem is going to have a negative impact on growth.
We keep kicking this problem down the road, supported by low interest rates and general confidence that we will pay our loans.
Both of those facts can change fairly quickly and with potentially disastrous results.
We either address the issue of where to spend our income or we face significant economic disruption, sooner or later.
Thursday, June 7, 2018
Wednesday, June 6, 2018
Economic Thoughts
The last financial crisis was primarily brought about because a debt house of cards fell apart.
Home ownership was considered a way to raise people into the middle class since the statistics showed that people who owned homes were generally increasing wealth faster than those who didn't.
The house of cards required homes to go up in value continuously so that the money lent recklessly would be safe because equity in the homes increased.
This actually worked for a while and because home lending was considered safe, despite the weakness of the loans, the money was repackaged into bonds with triple A ratings.
The whole scheme requires that the money you use to lend gets replaced as you sell the mortgage notes to get more money to lend.
It just required a little impetus to tumble down, as home prices stopped rising, money stopped flowing and mortgage payments stopped being paid.
Once money got tight the consequences were felt worldwide as we had an aptly named financial crisis as wealth disappeared and banks were in jeopardy.
We climbed out of that after a lot of pain and stayed out of it by injecting money into the system which acted like a stimulus replacing the money from the discredited junk mortgage market.
Its a treatment, but not a real cure. A real cure would require the economy to grow without any Government stimulus.
It seemed to be going that way but then we elected the dontard who presided over a massive stimulus of a tax package that put money into the hands of wealthy individuals and businesses.
In addition the congress delivered a massive spending plan that also puts money into the economy.
Its money we don't actually have, so we have to borrow it.
The federal debt is the new house of cards and unless we get the deficit under control it wouldn't take much to see it collapse.
Maybe a trade war?
Home ownership was considered a way to raise people into the middle class since the statistics showed that people who owned homes were generally increasing wealth faster than those who didn't.
The house of cards required homes to go up in value continuously so that the money lent recklessly would be safe because equity in the homes increased.
This actually worked for a while and because home lending was considered safe, despite the weakness of the loans, the money was repackaged into bonds with triple A ratings.
The whole scheme requires that the money you use to lend gets replaced as you sell the mortgage notes to get more money to lend.
It just required a little impetus to tumble down, as home prices stopped rising, money stopped flowing and mortgage payments stopped being paid.
Once money got tight the consequences were felt worldwide as we had an aptly named financial crisis as wealth disappeared and banks were in jeopardy.
We climbed out of that after a lot of pain and stayed out of it by injecting money into the system which acted like a stimulus replacing the money from the discredited junk mortgage market.
Its a treatment, but not a real cure. A real cure would require the economy to grow without any Government stimulus.
It seemed to be going that way but then we elected the dontard who presided over a massive stimulus of a tax package that put money into the hands of wealthy individuals and businesses.
In addition the congress delivered a massive spending plan that also puts money into the economy.
Its money we don't actually have, so we have to borrow it.
The federal debt is the new house of cards and unless we get the deficit under control it wouldn't take much to see it collapse.
Maybe a trade war?
Tuesday, June 5, 2018
Policies?
One way to look at some of the actions of the dontard is to say he is standing up to his enemies and holding to certain principles.
I suppose that is the way his supporters look at it as he fights with more and more people, both domestically and internationally over his stands on things like trade, pardons, collusion, lying, immigration, gun control and abortion.
Of course that is the most favorable light you can put on it.
The one that seems to ring truer is that he is acting like a toddler who throws tantrums when he doesn't get his way.
His decision to disinvite the Super Bowl Champion Eagles because some of the team wouldn't attend is just like the kid who wants to take his ball and go home if he isn't picked first.
Now his apparent belief that owners or anyone else can force citizens to do things they don't agree with is typical of his disregard for the rights we have in this country.
Of course a few people missing from the group would be no big deal except it would have been played up in the press, probably more than it should be. Still the big toddler can't accept any criticism and rather than recognize the team's achievements he made it about himself and his odd beliefs.
He is also finding national leaders from other countries starting to disagree with him. His "friend" Macron apparently told him how he disliked his decision on tariffs. What did he expect?
Many of the allies are working with Iran to salvage the nuclear deal and circumvent American sanctions, imposed despite Iran's compliance with the agreement.
This provides some wonderful opportunities for China and Russia to increase influence and ties with the rest of the world. Where it ends is anyone's guess.
The historic summit with North Korea has done more to legitimize that regime already than any action by any administration since the Korean War. It is already a major success for them, not matter what the outcome is.
Lets be clear, North Korea was never a real threat to this country even if somehow they could deliver a warhead that we didn't intercept. We would have annihilated them in an instant. The program did accomplish world recognition and their elevation to a player on the world stage.
Was probably worth every penny to them.
I suppose that is the way his supporters look at it as he fights with more and more people, both domestically and internationally over his stands on things like trade, pardons, collusion, lying, immigration, gun control and abortion.
Of course that is the most favorable light you can put on it.
The one that seems to ring truer is that he is acting like a toddler who throws tantrums when he doesn't get his way.
His decision to disinvite the Super Bowl Champion Eagles because some of the team wouldn't attend is just like the kid who wants to take his ball and go home if he isn't picked first.
Now his apparent belief that owners or anyone else can force citizens to do things they don't agree with is typical of his disregard for the rights we have in this country.
Of course a few people missing from the group would be no big deal except it would have been played up in the press, probably more than it should be. Still the big toddler can't accept any criticism and rather than recognize the team's achievements he made it about himself and his odd beliefs.
He is also finding national leaders from other countries starting to disagree with him. His "friend" Macron apparently told him how he disliked his decision on tariffs. What did he expect?
Many of the allies are working with Iran to salvage the nuclear deal and circumvent American sanctions, imposed despite Iran's compliance with the agreement.
This provides some wonderful opportunities for China and Russia to increase influence and ties with the rest of the world. Where it ends is anyone's guess.
The historic summit with North Korea has done more to legitimize that regime already than any action by any administration since the Korean War. It is already a major success for them, not matter what the outcome is.
Lets be clear, North Korea was never a real threat to this country even if somehow they could deliver a warhead that we didn't intercept. We would have annihilated them in an instant. The program did accomplish world recognition and their elevation to a player on the world stage.
Was probably worth every penny to them.
Monday, June 4, 2018
Who's the Patriot?
Consider a person who did everything they could to avoid serving their country.
Is this person in fact patriotic?
If the reason he can't serve is in fact a moral one, he very well might be, but when the only visible motive would be cowardice, not so much.
So the dontard who avoided the draft pretends to be patriotic.
His general contempt for those who served and suffered has also been displayed a number of times.
Yet he likes to rant about showing respect to symbols that his actions already disrespected.
He has criticized real American heroes who served and were killed or who served and were captured.
Yet he rails against people who risk their careers to make a point about an injustice that happens to their community.
You may or may not agree with their cause, they certainly have the right to draw attention to it.
Football teams play in public spaces with public attendance.
While you can impose contractual obligations on employees, I'm not aware that you can change the terms of employment without mutual agreement.
They could simply stop playing the anthem, it is only fairly recently that they started playing it.
Making the players stand, or assume any other position while it is playing though is probably a step too far.
Is this person in fact patriotic?
If the reason he can't serve is in fact a moral one, he very well might be, but when the only visible motive would be cowardice, not so much.
So the dontard who avoided the draft pretends to be patriotic.
His general contempt for those who served and suffered has also been displayed a number of times.
Yet he likes to rant about showing respect to symbols that his actions already disrespected.
He has criticized real American heroes who served and were killed or who served and were captured.
Yet he rails against people who risk their careers to make a point about an injustice that happens to their community.
You may or may not agree with their cause, they certainly have the right to draw attention to it.
Football teams play in public spaces with public attendance.
While you can impose contractual obligations on employees, I'm not aware that you can change the terms of employment without mutual agreement.
They could simply stop playing the anthem, it is only fairly recently that they started playing it.
Making the players stand, or assume any other position while it is playing though is probably a step too far.
Sunday, June 3, 2018
Drain the Swamp?
It seems like the swampiest stuff in Washington now a days is the politics being used to repay campaign donors.
Disguised as efforts to save non competitive industries we all get to pay more so that the campaign supporters get theirs.
Of course the tax bill itself was pretty swampy considering the money paid to the wealthy will have to be repaid with interest by future American workers.
Now we are seeing increased prices for Steel and Aluminum which will lead to other price increases as countries retaliate.
Of course as American exports gets reduced due to this, we may see cheaper prices for domestic crops, hurting our farmers.
Now we are mandating that utilities buy energy from coal and nuclear facilities that is non-competitive and not needed.
The interaction between this administration and some of the coal mine owners is well documented.
The claims it is for National Security are meaningless when you are talking about two domestic sources.
Using natural gas or renewable doesn't expose us to any foreign threat.
Just the domestic one.
Growing the swamp!
What else would you expect?
Disguised as efforts to save non competitive industries we all get to pay more so that the campaign supporters get theirs.
Of course the tax bill itself was pretty swampy considering the money paid to the wealthy will have to be repaid with interest by future American workers.
Now we are seeing increased prices for Steel and Aluminum which will lead to other price increases as countries retaliate.
Of course as American exports gets reduced due to this, we may see cheaper prices for domestic crops, hurting our farmers.
Now we are mandating that utilities buy energy from coal and nuclear facilities that is non-competitive and not needed.
The interaction between this administration and some of the coal mine owners is well documented.
The claims it is for National Security are meaningless when you are talking about two domestic sources.
Using natural gas or renewable doesn't expose us to any foreign threat.
Just the domestic one.
Growing the swamp!
What else would you expect?
Saturday, June 2, 2018
Spin
In the early 70s when we were still trying to get out of the Vietnam war the Nixon campaign started talking about the silent majority.
Sure the people who stay home, are patriotic, go to work every day and believe in American values aren't on your TV screen rioting, protesting or looting but they really represented the great number of Americans as opposed to those getting all the coverage.
Nixon was elected twice, to a large extent by these very people because similar to out current president he promised to restore the America these people cherished.
Of course he was forced to resign once the true level of his paranoia and illegal behavior became evident, but its likely true that he lost the election in 1960 because of some dirty politics in Chicago and while in retrospect Watergate was totally unnecessary, he didn't want to leave it to chance.
The point is that at all times in this country we have a significant majority of people who want things to be "normal".
They would like America to be the way they remember it, safe, prosperous, and a bit boring.
They aren't opposed to progress as long as the progress isn't actually disruptive.
Take the problems with the Affordable Care Act.
First the media and republicans were able to rebrand it as Obamacare and present it as an expensive give away that was going to cost these folks more money for less benefits with uncertain results.
The democrats lost the public affairs contest almost immediately and did little to overcome the bad press. As it turns out, there were a lot of things about it these people liked, but the incessant bad press cost a lot of elections and grief.
Similarly, we see the issue of immigration clearly being presented in negative ways which are generally untrue or at least not representative of the real situation.
A theme has been established about how the liberal elite are trying to socialize this country and take away the America these people love.
Its not true, but its the story that is out there, and it needs to be countered.
The things hurting their way of life are corporate decisions to reduce the cost of production and automation. They think its immigration and gay marriage.
Talk about spin.
Sure the people who stay home, are patriotic, go to work every day and believe in American values aren't on your TV screen rioting, protesting or looting but they really represented the great number of Americans as opposed to those getting all the coverage.
Nixon was elected twice, to a large extent by these very people because similar to out current president he promised to restore the America these people cherished.
Of course he was forced to resign once the true level of his paranoia and illegal behavior became evident, but its likely true that he lost the election in 1960 because of some dirty politics in Chicago and while in retrospect Watergate was totally unnecessary, he didn't want to leave it to chance.
The point is that at all times in this country we have a significant majority of people who want things to be "normal".
They would like America to be the way they remember it, safe, prosperous, and a bit boring.
They aren't opposed to progress as long as the progress isn't actually disruptive.
Take the problems with the Affordable Care Act.
First the media and republicans were able to rebrand it as Obamacare and present it as an expensive give away that was going to cost these folks more money for less benefits with uncertain results.
The democrats lost the public affairs contest almost immediately and did little to overcome the bad press. As it turns out, there were a lot of things about it these people liked, but the incessant bad press cost a lot of elections and grief.
Similarly, we see the issue of immigration clearly being presented in negative ways which are generally untrue or at least not representative of the real situation.
A theme has been established about how the liberal elite are trying to socialize this country and take away the America these people love.
Its not true, but its the story that is out there, and it needs to be countered.
The things hurting their way of life are corporate decisions to reduce the cost of production and automation. They think its immigration and gay marriage.
Talk about spin.
Friday, June 1, 2018
Form vs Substance
The fundamental question facing Americans is what do they want?
In our age with statistical sampling and other tools you would think it was pretty clear, but while the country generally holds fairly progressive views, those views aren't fully aligned with those who vote.
We also have the issue of apathy and ignorance.
The people who vote in this country are overall older, whiter and more conservative than the population as a whole.
Not necessarily smarter.
I hear a lot about the failings of the modern educational system, and sometimes it becomes quite evident when you see "Man on the Street" interviews.
I hesitate to assume these interviews are fully representative of the public as a whole, but when you see surveys where a majority of people hated Obamacare but liked the Affordable Care Act, it makes you wonder.
We have a society and population that has become attuned to the form more than the substance of issues.
Look at the issue surrounding the second amendment.
I have never heard a real proposal that would seize everybody's guns, but to many, thanks to the propaganda of the gun lobby, that's the issue they think exists.
Similarly, we see the Republicans brand themselves as supporters of the working class, when all evidence indicates they really represent the wealthy class. Yet many working class Americans, concerned that the wealthy might pay slightly higher taxes fight socialism.
We also react without much sense to arguments about our weak defense when we clearly are able to obliterate any opponent and our need for conventional weapons is far outweighed by our need for counter terrorism.
How can we get rid of the apathy and ignorance?
Its not a shared goal, Many talk about voter turnout while trying to make sure only their supporters actually turn out.
Mob rule has been a concern of the elite in this country since its founding and certain institutions, like the Electoral College were designed to prevent it.
Suppress voting, convince the ignorant to vote against their own interests, and make elections about money and personality instead of issues.
Its sort of working.
In our age with statistical sampling and other tools you would think it was pretty clear, but while the country generally holds fairly progressive views, those views aren't fully aligned with those who vote.
We also have the issue of apathy and ignorance.
The people who vote in this country are overall older, whiter and more conservative than the population as a whole.
Not necessarily smarter.
I hear a lot about the failings of the modern educational system, and sometimes it becomes quite evident when you see "Man on the Street" interviews.
I hesitate to assume these interviews are fully representative of the public as a whole, but when you see surveys where a majority of people hated Obamacare but liked the Affordable Care Act, it makes you wonder.
We have a society and population that has become attuned to the form more than the substance of issues.
Look at the issue surrounding the second amendment.
I have never heard a real proposal that would seize everybody's guns, but to many, thanks to the propaganda of the gun lobby, that's the issue they think exists.
Similarly, we see the Republicans brand themselves as supporters of the working class, when all evidence indicates they really represent the wealthy class. Yet many working class Americans, concerned that the wealthy might pay slightly higher taxes fight socialism.
We also react without much sense to arguments about our weak defense when we clearly are able to obliterate any opponent and our need for conventional weapons is far outweighed by our need for counter terrorism.
How can we get rid of the apathy and ignorance?
Its not a shared goal, Many talk about voter turnout while trying to make sure only their supporters actually turn out.
Mob rule has been a concern of the elite in this country since its founding and certain institutions, like the Electoral College were designed to prevent it.
Suppress voting, convince the ignorant to vote against their own interests, and make elections about money and personality instead of issues.
Its sort of working.
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