Top Of My Head

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Tag: economy (page 2 of 4)

Affordable Care Act & Scott Walker

Fact:  By 2014, all 50 states have to have their health care exchanges up and running.  If they don’t, the Federal Government will step in and take control.

Fact: By 1/1/2013, all 50 states have to have a plan in place on just how they’re going to create these exchanges.

Fact: Scott Walker doesn’t like Federal Government Control and yet, he is putting off beginning the work on the exchanges until after the November election.  He’s probably thinking that Romney will win and he’ll never have to put it in place.

Opinion: Scott Walker is a dofus who doesn’t know his ass from a hole in the ground.  It’s too bad the man kept his throne in the Wisconsin State House, because he’s going to screw us like he is the Marquis De Sade.

According to Bloomberg Businessweek (August 13 – 26, 2012),  “only 18 states had even started putting in place the …health benefit exchanges.”  That’s one eight, people.  One of those states is Wisconsin.  The article states: “The Republican governors of six states are simply refusing to create the exchanges…”  And, our Governor is one of them.

Apparently, Scott Walker wants to wait until the outcome of the November election (see article here) to act on creating an exchange.  He also ” turned down $38 million in federal money that could have gone to implementing the federal health care law in Wisconsin.”

Does he even have a clue about what setting up a health exchange will entail?  First, you need an interface that end users (that’s us) can interact with to pick out the insurance, actually, that would be second.  First, you need the list of insurance companies, plans and rates that will be sold.  Then, an end user interface.  Then, you need for this software, database, etc. to interact with Medicare and Medicaid.  You need an interface for the insurance companies.  You need an interface for the government employees that will have to assist people signing up for insurance.  You need all of this to speak to the Federal Government’s computers.

And, you need money to create it, run it and maintain it.  So you really shouldn’t turn down $38 million from the Federal Government earmarked to help you do just that.

You need Business Analysts who can talk with all the parties to see how this can be put together – that can’t be done in a day.

And, Walker thinks he can wait until after November to do it.

The man is doesn’t understand the value of making it easier for people to purchase insurance.  And, he doesn’t understand the value of getting this project off the ground.  He doesn’t see the big picture.

Our state is still losing jobs and Scott Walker wants to put this off as long as he can.  Let me explain the big picture:

Setting up a healthcare exchange requires (at the very least) the following:

1. Business Analysts

2. Project Managers

3. Quality Assurance Testers

4. Database Administrators

5. Data Analysts

6.  Web Designers

7. Network Engineers

8. Web Services Programmers

9. Computer Programmers

10. Managers

11. Administrative Assistants

12. Technical Writers

When your state leads the nation in job losses, a project like this can put a lot of people to work, which in turn creates demand in the economy.  Think about it, when one person is working their money (i.e., wages) spreads through their community.  They pay their rent or mortgage – rent is better, as the money goes to a landlord, who then spreads it out.  But, a mortgage payment means a bank has money to lend (in a very simplistic view).  They purchase gas at their local station.  They buy groceries at their local market.  They take their family out to dinner.  They purchase new clothes and, this is personal, they purchase new programming books.  (I’ve never started a new project without purchasing a book.)  $10 here, $20 over there and pretty soon demand is up again.

But, Scott Walker is sitting on his hands, ignoring the Federal Government Mandate and hoping it just goes away.  He has to have the plan in place by January 1,2013.  Walker’s hoping that 1/20/2013 will bring in a new President and he won’t have to follow the law.  Romney’s not going to win, our country can’t be that full of stupid people.  But, even if he does win, the Affordable Care Act won’t disappear that face and Scott Walker will be breaking the law.  Oh – one more little item – Walker proclaims that he doesn’t want Federal Government interference, but the Feds will take this over if he doesn’t comply.  Why would you want to give up control of something so momentousness?  Could it be that Scott Walker is out of his realm?  That he cannot get this job done, because he is an uneducated man who doesn’t know how to run a project?

Thanks, Governor Walker.  I cannot tell you how much I hang my head in shame that my fellow Wisconsinites voted for you not once, but twice.  God help us all.

 

A Week Of Sanity

I have decided that it is time to start spreading the sanity in our political debates.  It is time we all become educated in the economy to learn why we shouldn’t fall for more of tax breaks for the “job creators”.

I’m starting with Robert Reich.  Mr. Reich has served three presidents: Ford, Carter and Clinton.  The man knows his stuff.  Click on the video link on the right or click here to see him debunk 6 economic myths.

Scott Walker’s Job Problem

According to a new Scott Walker Ad, he has created 33,000 jobs.  Boy, wouldn’t that be nice?  The fact is – he hasn’t.  Wisconsin still leads the US in job losses.  In fact, according to the BLS report, the state of Wisconsin is the ONLY state to show job losses over the past year.

Now, Politifact (a group with whom I normally agree) has rated a statement of Tom Barrett’s regarding the blame for the job losses as half true.  Barrett’s statement:

“Governor Walker has caused Wisconsin to lose more jobs than any other state in the country.”

PolitiFact says that, while Barrett’s numbers are correct – we have lost more jobs than any other state in the country – “there is no proof that the measures caused the job losses”.

That’s where I have a problem.  You see, 17,800 of the jobs lost were government jobs.  Walker’s policies and budget shredding caused the loss of more than half the jobs that were lost over the past year.  How can you say he isn’t to blame?

And, a political point I would like to add:  You can’t take the credit, if you’re going to sideswipe the blame.  In other words, while the rest of the country has seen an economic improvement, our state has not.  I don’t blame Walker for the economic downturn.  That would be like blaming President Obama for the economic downturn that happened before he came on board.  It is foolish.  However; while 49 states have seen their job numbers go up, our state has seen job losses – in the year that Walker has been in charge.  Sorry, dude, you have to shoulder the blame.

Scott Walker has spent more time making his rich backers happy. He’s been kissing the Koch brothers’ collective rears and he hasn’t been supporting the people of the great state of Wisconsin.  He took away collective bargaining rights for public employees and he has caused job losses of government employees.  We lost 6,100 private sector jobs.

Scott Walker and his policies are bad for Wisconsin.  Slashing budgets during a recession just makes the recession worst.  On June 5, we need to vote the boy out and put in a man who can get the job done.

Youth Unemployment

This is an actual quote from Mitt Romney from Mitt Romney.com:

“I think this is a time when young people are questioning the support they gave to President Obama three and a half years ago. He promised bringing the country together; that sure hasn’t happened. He promised a future with good jobs and good opportunity; that hasn’t happened. And the pathway that he pursued is one which has not worked. Young people recognize that and I think that’s why they’re going to increasingly look for a different approach.” –Mitt Romney

Below the quote, there are links to the “facts” that support his data.  Two links to the same Time Magazine article written by Josh Sanburn (which I haven’t read) from February of this year,  there’s a couple of links to the Bureau of Labor Statistics website and some more links to articles .

Here’s the thing:  Mitt Romney is hoping that you won’t research any farther than that.  He’s hoping that he can convince you that President Obama hasn’t done enough and he’s handing you little tidbits that support his claim.

So, I did the research myself.  Below is a chart.  This is the annual unemployment rate (seasonally adjusted) from 1948 until 2011. I’ve broken the data down by age: 16 – 24 and over 25.  The third line is the combined annual unemployment rate.  I obtained the data from the Bureau of Labor Statistics site.  (Side note: If you love data, like I love data, you could spend hours on this site running queries!)

Here’s the thing:  Romney is trying to make you think that somehow our youth have it so much worse than the rest of us and President Obama is responsible for it.  However; the truth is that the unemployment rate for 16 – 24 year olds has always been higher than the unemployment rate for the rest of the population.

 

Annual Unemployment 1948 - 2011

Cain’s Tax Plan Again

When I’m wrong, I’ll admit that I am wrong. Apparently, I was wrong in my assumption regarding Cain’s 9-9-9 Tax Plan. There are some items that I overlooked – one of which was the fact that I would no longer pay Payroll taxes of 7.65%. This was pointed out by Bob – thanks, Bob. I dug a little further and discovered I would no longer have any deductions, except charitable and, since I don’t live in the inner city, I don’t receive a tax credit for that.

When I did my original comparison, I just took my salary – what I earn from my employer – and used those figures. I only used the standard deduction and the personal exemption for the current figures. For my spending, I went through the checkbook and took out all of my spending for the month of September.

Here’s what I did this time.

I’m used September’s figures for spending. I’m added in the Payroll taxes for both the current plan. I used my actual deductions – divided out by 12 – from my last year’s income tax return. Since Cain’s plan allows for charitable deductions, I subtracted my charitable deductions from his plan.

This time it worked out that I currently pay $2,890 more in taxes now than I would under Herman Cain’s plan. Since the only criteria I was using for this plan was how it would affect me – and only me – then I have to say, it is a good plan.

Sorry, but I do.

However; here’s what I wrote the last time:

Here’s what I recommend – don’t take my word on whether or not you like the Cain Plan. Do the math for yourself. Figure out exactly how much more or how much less you’ll pay in taxes. Come to your own conclusion. That’s what we should really be doing anyway. Checking out the plans and weighing our options.

I stand by that recommendation. You should figure out whether or not this is a good plan for you.  But, actually do the math and figure it out – don’t just guess or believe what someone else writes.  Too many people will believe whatever someone emails them.  Somedays, I wonder if laziness is the real reason we’re in this mess.

Now, that I have said that, a consideration should be made for whether or not this is a good plan for the country. I’m not sure that it is. Cain has stated that the country will gain more in revenue from this plan than we do currently. I just don’t see how that is possible. If I’m saving nearly $3,000 per year, shouldn’t everyone in my situation be saving that amount? Will we really gain enough on those people who will pay more to make up the difference for those who will pay less? It’s just a thought.

Wall Street Journal – The Financial Meltdown

The video is called: End of Wall Street: What Happened. It is supposed to be the first in a 3 part series. Watch it – it is very interesting.

Republican Jobs Plan

Is it me?  Because I just don’t get it.  I don’t understand how the Republicans can keep coming back to the same old / same old and think that it will work.  Yes, Ronald Reagan cut taxes in 1981, but he raised government spending (and I’m really simplifying because monetary policy had a lot to do with the recovery).  The idea that the country can get our citizens back to work via lower tax rates and the reduction of government regulations is a one that is not based on any facts.

Here’s what drives companies to hire people – it’s simple, but true:  DEMAND.  That’s it, demand for a company’s good has to be high enough for the company to hire more people.  PERIOD.  If we’re not out purchasing Ding Dongs, the Ding Dong factory up the road is not going to hire more people.  It doesn’t matter how low a company’s taxes go, they’re NOT going to hire anyone they don’t actually need.

I don’t understand why it is that the Republicans in the Senate (led by John McCain) and the majority of the Republican Candidates for President do not understand the basics of economics.  And, actually, I do understand why Michele Bachmann doesn’t – the woman doesn’t know that Abraham Lincoln wasn’t a founding father and that Elvis is dead.  I understand why Rick Perry doesn’t get it – he’s a politician. But, Mitt Romney and Herman Cain are businessmen – Romney hasn’t been one for quite a while, but Cain did an impressive job turning around the Godfather’s Pizza business.

How can either one of them say, in all honesty, that they would hire someone they don’t need in a company just because taxes are low?

Why would anyone?

The truth is that consumers are tapped out.  I’m tapped out, you’re tapped out.  We’ve pretty much purchased everything we wanted in the last, say, twenty years.  I have a house.  I purchased two cars – one new, one used – within the past two years.  Other than buying some Christmas presents and a new cell phone, quite honestly, I’m done.  Finished.  There’s no more spending coming from my house.  It is time – and this is probably anti-Patriotic of me – to do some saving.

There’s a lot of people out there who are just like me.

So, how does the economy improve?

By the government spending, spending and spending some more.  I don’t like the concept, I don’t like the idea, but that’s what has to happen.  We can’t lay off 15,000 government workers in one state and expect that state’s economy to make any improvements.

We have been neglecting our infrastructure in this country for years.  Now is the time to fix the bridges, the roadways, the levees, our schools and whatever else needs fixing.  Now is the time for the government to spend.

There’s a balance that has to be met.  We can’t have too much government money pumped into the economy or it will push out private investment.  We need to find that balance.

But, we are not going to improve the economy by cutting more taxes and reducing even more regulations.  The Republicans need to start singing a new tune, because the economy can’t march to the one they’ve been singing.

Herman Cain’s 9-9-9 Tax Plan

When it comes to taxes and being told what’s going to cost me more money and what’s going to save me money, I generally don’t believe the Press, or the person touting the plan.  What I do believe is taking what I pay in taxes now and comparing that to the new plan.

This is what I did when comparing the “savings” Paul Ryan’s plan touted.  This is what I have done with Herman Cain’s plan.

Now, there is something I’d like to add.  Mr. Cain has not made public a lot of details about his plan.  It is possible that I am making incorrect assumptions.  I am listing the assumptions that I have made before the comparison – if anyone knows for a fact that the Cain plan doesn’t do any one of these, please leave a comment and I will make adjustments.

  • No deductions: personal exemption, neither Medical nor the Standard Deduction.
  • Taxes on everything: food, gas, clothing and bills such as electric and cable.
  • Even though when I purchase my next home or car – and only if Cain’s plan passes – I would pay a 9% sales tax on the home or car, I did not include this in my car payments, nor in my mortgage payments.  I made the assumption that the 9% tax would not be retroactive.  Therefore; in my total spending, I did not include my mortgage nor car payments.

I picked last month for my spending.  I figured September is a typical month for me.  Some months I might spend more and some months, I spend less.  For comparison purposes, I included Paul Ryan’s plan in my chart.

 

Current

Ryan’s Plan

Cain’s Plan

Salary

$5,416.67

$5,416.67

$5,416.67

Insurance Deduction

$253.44

$0.00

$0.00

Personal Exemption

$291.67

$316.67

$0.00

Standard Deduction

$483.33

$1,041.67

$0.00

Taxable Income

$4,388.23

$4,058.33

$5,416.67

Federal Income Tax

$784.18

$1,014.58

$487.50

National Sales Tax

$0.00

$0.00

$399.09

Total Tax

$784.18

$1,014.58

$886.59

%

17.87%

25.00%

9.00%

This is based on one month’s salary and all the spending for the household.  In the month of September between bills (cable, electric, cell phone, etc.), food, household items and misc. items (books, software), I spent $4,434.30.

As you can see, I currently pay – each month – $787.18 in Federal Income Tax (after deductions, which really aren’t taken out until the end of the year, but I wanted this to be a fair comparison – apples to apples).  Under the Cain Plan, I will only have $487.50 taken out of my paycheck for Federal Taxes.  That’s a savings of $299.68.  That sounds pretty good.

But, wait – there’s more…

Once the addition of the sales tax on $4,434.30 of goods and services is paid, my federal tax bill is raised by $399.09 – almost $100 more than the initial savings.  This brings my total taxes under Herman Cain’s plan up to $886.59!  Clearly, the Cain Plan is not a winner for me.

Let’s deal with the critics on this.  I’m sure some people are saying, “Just spend less.”  Hmmm, nice idea, but then what’s the point?  If, in order to save taxes, I slow down my spending, then for what am I working?  What’s my motivation for earning more money?  What do I get and how does the economy get rolling along if I cut my spending in half?

Let’s say I only spend the essentials – cut out the extras, like eating out or my passion for books – what happens then?

Well, I would save $52.80 in taxes each month.  And, sure, I could sock the extra money away in savings, but who wants to live like that?  I don’t drive up to Brookfield every single day to not enjoy the money I spend.  I sock away savings and money for retirement, but then I enjoy life.

And, how will I pay for that next car?  Sure, I could use my savings, but when the average car price is around $20,000 an extra 9.0% in sales tax is really going to make a huge difference.  That adds – without any other taxes or licensing fees – and extra $1,800 to the price of my new car.

Perhaps, Cain’s plan won’t take food or, maybe, cars will be exempt.  Wouldn’t that be subsidizing certain industries and isn’t that one of the ways we ended up in this mess in the first place?

Here’s what I recommend – don’t take my word on whether or not you like the Cain Plan.  Do the math for yourself.  Figure out exactly how much more or how much less you’ll pay in taxes.  Come to your own conclusion.  That’s what we should really be doing anyway.  Checking out the plans and weighing our options.

Happy Calculating!

Warren Buffet’s Tax Rate…

Warren Buffet released his 2010 taxes for Congress’s review.  He wanted to prove his point that the rich do not pay their fair share in taxes and that they can afford to pay more.  After comparing his tax return to my tax return, I so agree with him.  I earned .10% of what Mr. Buffet earned last year.  That means, for those of you who are math challenged, he earned 1,000 times as much as I did.

Now, if all is fair, then he should’ve paid 1,000 times more than I did in taxes.

Except, he didn’t.  Everything being equal, he should’ve paid $8 million in taxes.  He didn’t, he paid just under $7 million.  I can hear the argument now, that’s more than you paid.  If you don’t like it, why don’t you go get rich.  (Usually, these arguments come from people who make half as much as I do.)

How can a man who make 1,000 times more than me pay a tax rate that is only 2% higher than mine?  How is that fair?

Well, I have to go to work, where 1/3 of my paycheck goes to taxes and insurance before I even come home.

373 – 1

373 – 1 => that’s the difference between your salary and the salary of the guy on top.  For every dollar you earn, a CEO is earning 373 dollars.  And, what do you get for that huge difference?

You get a boss who thinks you’re paid too much.

You get a boss who wants to raise profit margins and he does this by laying off your co-workers or even you.

You get a boss who is more than willing to move a factory overseas to save money, so he can make even more.

You get bad health insurance – if you have any health insurance at all.

You get to save for your own retirement out of the little bit of money that you have – and you get politicians that want to take away your safety net.

You get the feeling that you are expendable.

We could blame the government for our nation’s economic woes.  However; it isn’t entirely the government’s fault.  Greed is good, so the saying goes.  Except, greed is only good for those on top and it harms those of us on the bottom rung (and, even those of us a couple of rungs higher).

Perhaps, the government should take some, but not all, the blame.  It was the government that removed the financial regulations that had prevented a financial collapse for sixty years.  The free market system would work if only greed and the ever desire for higher and higher profit margins wasn’t part of the deal.  When men (and women) only concern themselves with profit and not sound business decisions, economic collapse ensues.

I’m not entirely sure what can completely fix our economy, but I can tell you what won’t and what hasn’t.  Lowering taxes even farther and ending financial (and other business) regulations are not going to put this great nation back on solid financial footing.  We need to put the Glass-Seagull act back into place to protect our financial markets.  And, we need to raise taxes on the upper classes.  The top limit needs to be moved back to 39%.

Ronald Reagan was correct to lower taxes in the eighties.  It was a good thing and it started economy recovery.  However; too much of a good thing can do us harm.  Our current economic status is proving just that.

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