Tax cuts for the Wealthy…What about the rest of us...HuH? Trickle Down…Baloney!

You are probably tired of even thinking about politics and politicians, and I can’t blame you for feeling that way, but something is going on in this country that we must, as citizens pay attention to, whether we like it or not. As Senator Clag horn Hen said in the Hanna Barbera animated cartoon “Pay attention boy, or you’re going to lose your lunch”.
The conservative right is trying to foist on us the thought that tax cuts for the rich are the way to reduce the deficit. They use as their example of how this works, the tax cut that was enacted by the Reagan administration. They point to the expansion that took place during the Reagan years, and how great things were in the ‘80’s. The only problem with their thinking is that the deficit rose 189% during the Reagan years. 189%! From 1982 to 1989. WOW!
Tax cuts for the wealthy don’t work anymore. Why? #1. Taxes aren’t high enough to make a difference. Reagan cut taxes that were in the 80 to 90% bracket. #2. And most important under Reagan the money saved by paying lower taxes stayed in the United States. It was invested in stocks, bonds, plant and equipment. Today the wealthy buy everything but U.S. goods. They buy Yen, Chinese stocks, gold. None of these things help the U.S. economy. In fact under Bush II the rich corporations even benefited from shipping our jobs overseas. Reagan and Bush II were rich man’s presidents and that’s a fact. The middleclass has gone nowhere since Reagan deregulation. Average earnings after inflation are the same today as they were in 1982. Average executive earnings have gone sky high in the same period. And the guys that run hedge funds are taxed at a lower rate than you are, and they make billions. Where do they invest their money? With the rest of the rich of course.
The tax breaks for the wealthy must be allowed to lapse in 2011! If you want to give the rich a tax advantage, get something for it. Don’t let them ship the money out of here. They can do anything that they want with their after tax income, but any new tax break should be targeted to the U.S. economy. So, monies invested here would be deductible from their income, up to a certain limit, that would ensure that the money was invested here. Investments overseas would not be deductable. Maybe that way, if the wealthy get tax cuts, at least the rest of us will participate too. I believe that is how to create jobs. That is what is fair.

“What your brain doesn’t know, but will tell you anyway”

Awhile back, Jean Horst wrote an article “The Glaringly Obvious… or What Your Brain Knows But Won’t Tell You”. I thought it was great. It talked of the amazing capabilities of the human brain. I would like to bring into the discussion some other capabilities of the human brain that are amazing, but are not so benign. It lies.
In my life I’ve found out that the biggest liar I know is me. How does that happen? I mean well, but I’m always trying to think ahead. How does one think ahead? Well, if you’ve got a brain and most of us do, we use it to think. Think up schemes; think about tomorrow’s weather, or where the stock market will be sometime in the future. Then we start to worry. Will our picnic plans be ruined, will our 401K become a 201K again. Where do these ideas come from? The brain of course. And the problem is that the brain lies. It doesn’t mean to lie, but it can’t help itself. I ask it a question and it tries to answer, but bottom line as much as it tries, it can’t predict the future
How many times have you worried about something; taking a test, meeting new people, paying the mortgage? Plenty, right? How many times did worrying help the out come of your distress? I would venture that it never helped and caused a great deal of aggravation before the subject of the worry came to pass. And when it finally did come to pass, the event wasn’t nearly as bad as you thought it would be. Keep remembering, your brain doesn’t have clue about the future. It doesn’t even know if you’ll be here tomorrow. So the old WWI song was exactly right;
“What’s the use of worrying,
It never was worthwhile,
So pack up your troubles in your old kit bag and
Smile, smile, smile”

Yeah, you can do it! I did. I stopped worrying a long time ago.
Good luck

What Happened to Our Democracy?

The American people have given up on Democracy! They have turned it over to the corporations, who pay the lobbyists, who write the bills that come out of our elected Congress. Why don’t we just let the lobbyists run things? Then we could save all the money spent on electing people who do nothing. It seems that the Republicans would like that kind of government, except that they would lose their jobs and easy way of life. So, they will say NO to everything, even if they favor the item, because the corporations don’t want to change, unless, they can make time go backwards.
Wake up America! As usual, you forget that the bankers and brokers brought our country to this stage and that our President saved us from their “stupidity”. Some of you hark back to your “savior”, Ronald Reagan. He took office in 1980, in a recession. We got out of that recession 3 1/2 years later. His fancy tax cuts made the rich, richer and the poor, poorer. The middle class in the US is no better off today than it was in the “good old days” of Reagan’s presidency. President Obama has been in office 8 months and everyone says the recession is over! I’ll take Obama over Reagan any day and twice on Sunday.
Some of you say, “Get the government out of my way, I want to be a Bill Gates, or a Michael Dell and I can’t achieve with the government controlling things”. The average man or woman in America is more likely to be hit by lightening than have the success of the two previously mentioned gentlemen. Then we have the heads of large corporations and their salaries. They pull down 500 to 600 times the average worker’s salary. Is there anyone out there who seriously thinks that one person is worth 500 times the salary of another? Jesus would be rolling his eyes; “What’s going on here?”
Open your eyes America! Your being led down the primrose path by a bunch of unelected talking heads, lead by Limbaugh, Hannity, Malkin, Coulter, O’Reilly and Beck to name a few. The President is not trying to steal your country; he is trying to give it back to you! Do you really think that we would be out of this recession if McCain and Palin were governing our country? Do you really think that reducing taxes and letting the banks go under would have put us in a position to say “the recession is over”. Thank your lucky stars that Obama was elected.
Good luck.

Liars

There was an article on the internet the other day which said that each "clunker" turned in cost us (the tax payer), $45,354. Edmunds, an auto appraisal firm, came up with this figure. They said, 200,000 cars would have been traded in anyway, so really only about 22,000 were new sales, thus the $45,354.
There's an old saying, "Figures don't lie, but liars figure"
Mark Twain
If Edmunds knew what car sales would ordinarily be during the 4 day period the clunkers were traded, then I would pay attention, but they're just playing with numbers to get their name in the paper. What a load! The annual sales rate of autos went up substantially in the month and all the new sales weren't even reported yet. Clunkers are good! Hail to clunkers! It's helping to reduce unemployment and get money moving again.
Good luck to you all.
The Old Philosopher

Letter I sent to my two Maine Senators

Dear Senators Collins and Snowe,
First I would like to thank you for being such great Senators. You are fair, thoughtful and look out for the best interests of the American people and the people from the great August 6, 2009 State of Maine. I am very proud to be represented by the both of you.
Please give the Presidents health care bill a fair hearing. I'm on Medicare and am satisfied, of coarse I wish it was less expensive, but heck, I would be dead now if it were not for Medicare, so I'm not complaining. The Republican plan is great for the rich, but my wife has no insurance because she went from full time to one day a week. We can't even buy COBRA because she still works for the same employer. That's a hole that a lot of people must fall into, it's pretty deep.
This Cap and Trade stuff is not new. I'm sure you remember Reagan's first attempt at controlling acid rain and that a bill finally got passed under Bush I The Clean Air Act. The bill was a big success and the emissions are still traded.
An early example of an emission trading system has been the SO2 (sulfur dioxide) trading system under the framework of the Acid Rain Program of the 1990 Clean Air Act in the U.S. Under the program, which is essentially a cap-and-trade emissions trading system, SO2 emissions were reduced by 50 percent from 1980 levels by 2007.[50] Some experts argue that the "cap and trade" system of SO2 emissions reduction has reduced the cost of controlling acid rain by as much as 80 percent versus source-by-source reduction.[51][52]

In 1997, the State of Illinois adopted a trading program for volatile organic compounds in most of the Chicago area, called the Emissions Reduction Market System.[53] Beginning in 2000, over 100 major sources of pollution in eight Illinois counties began trading pollution credits.

In 2003, New York State proposed and attained commitments from nine Northeast states to form a cap and trade carbon dioxide emissions program for power generators, called the Regional Greenhouse Gas Initiative (RGGI). This program launched on January 1, 2009 with the aim to reduce the carbon "budget" of each state's electricity generation sector to 10 percent below their 2009 allowances by 2018.[54]

Also in 2003, U.S. corporations were able to trade CO2 emission allowances on the Chicago Climate Exchange under a voluntary scheme. In August 2007, the Exchange announced a mechanism to create emission offsets for projects within the United States that cleanly destroy ozone-depleting substances.[55]

In 2007, the California Legislature passed the California Global Warming Solutions Act, AB-32, which was signed into law by Governor Arnold Schwarzenegger. Thus far, flexible mechanisms in the form of project based offsets have been suggested for five main project types. A carbon project would create offsets by showing that it has reduced carbon dioxide and equivalent gases. The project types include: manure management, forestry, building energy, SF6, and landfill gas capture.

Since February 2007, seven U.S. states and four Canadian provinces have joined together to create the Western Climate Initiative, a regional greenhouse gas emissions trading system.[56]

On November 17, 2008 President-elect Barack Obama clarified, in a talk recorded for YouTube, that the US will enter a cap and trade system to limit global warming.[57]

The 2010 United States federal budget proposes to support clean energy development with a 10-year investment of US $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. Under the proposed cap-and-trade program, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019.[58].(Wikipedia)
This sounds like a program that both parties ought to vote for.
Thank you for your time.
If I can help you in analyzing an economic problem, I'd be glad to help. I have a big advantage over most analysts because I'm not an economist.
Sincerely yours,
Bob Bregman
York, ME

Just trying to help things along.

The Old Philosopher

A Possibility

Here is a possible picture as I see it. It aint necessarily so, but it gives me something to look for.
Stock markets are rising in the U.S., China and Japan plus all the lesser markets are also rising. Money is flowing in from all over the world, pushing stocks higher. Hedge funds, pension funds, mutual fund and to a smaller extent the public are all being forced to participate, because there is no other market big enough to handle so much cash. Now the only consumer in this group is the public and they are the smallest part, so the market rise does little to increase consumer spending. Therefore the economy doesn't expand as fast as the market and we have the final bubble!
The Fed is hoping that the rising market will lift consumption, and say that it does, but it wont rise as fast as the market is rising. The markets get way ahead of themselves, forcing the Fed to raise interest, because nobody wants to buy 3% bonds when the stock markets are roaring. In other words it isn't raising rates because there is a boom going on, it's raising them because it needs the money to finance the ongoing deficit, plus tax reciepts are the worst since the Great Depression. Tax collection are down because people are still out of work and corporations are not growing, earning aren't growing and they all have tax loss carryovers due to their giant losses.
With the market at a high, interest rates going up and the economy not yet out of the woods; any disruption, such as oil rising further, a small country getting into financial trouble, housing doesn't recover, autos can't get above 10 million unit/year,the dollar drops precipitously, interest rates start to ratchet up because of inflation fears, or interest rates drop because of deflation fears. Fear can raise its ugly head for no particularly good reason. The talking heads and empty suits will give plenty of reasons, but always after the fact.
Bottom line, if the market advances too far in relation to the economy's growth, and then the economy doesn't show any growth, the market has a big problem. At 1,000 the S&P 500 is selling at 18.2 X's projected 2009 earnings of $55. Projected earnings for 2010 are $74.75, an approximate 50% increase. If that happens the market is selling at 13.4 X's earning, not too bad. At 1,100 it's 14.8 X's 2010 projected earnings, still not bad, but if earnings don't grow, the rush for the exits will be horrendous. If earning look like they are going to be $55 or less in 2010, then the S&P 500 earnings ratio could be in the single digits. That would be HORRENDOUS!
My guess, if the economy starts down again, and I'm not saying that it will, but if it does buy some puts (70's ??), you'll need all the protection you can get.
Good luck and let's hope that the market is right about the future, and that all of the above is just something to think about.

Humorous to some, sad to others.

This is hard to believe, but this is the way the U.S. and China do business.

Suppose that you made a nice product that I really wanted. So I come to you and say, "I'd like to buy 10 widgets at $100 a piece, so I'll give you a $1,000. OK?" You say, "That sounds good to me." Some time later you deliver the widgets and ask for payment. I give you a 10 year 4% note, instead of cash. You give me a funny look, but take the note because I tell that I'm going to buy a lot more of your widgets and other things you make. What a wonderful way to trade! Goods for 4% notes!
My own opinion here is that the Chinese are really not that stupid, so what is going on? I believe that the Chinese costs are inflated for the goods sold by two or three hundred percent. I say this because the very same good sold to America will sell on the street in China for 10 to 20% of the U.S. buying price. They can afford to sell widgets for 0% notes or even pay us interest on the notes. Not only that, but they get to scare the BeJesus out of the U.S. Congress and the public as well. Now that's a real bargain!
So, do you find this situation humorous or sad?
The Old Philosopher