Archive for the ‘Economics’ Category
USA Today has a nifty website that shows you what Uncle Sam has done with your tax dollars since 1940. Having checked out the difference between what I have to pay versus what the “evil” rich have to pay, I bet Karl Marx would be proud of our government’s progressive tax scale (see #2 on Marx’ Ten Planks of Communism).
In: Economics · Tagged with: taxes
On Friday afternoon with no media present, President Barack Obama signed a bill which raises our public debt from $12 .394 trillion to $14.294 trillion.
That is an incredible amount of money, but do Americans even grasp how much money $1 trillion (1,000,000,000,000) is, let alone more than 14 trillion?
A million seconds ago, it was only twelve days ago. But a trillion seconds ago – it was 29678 B.C.. Woolly mammoths still roamed the earth, and the Great Lakes won’t be formed for another 20,000 years. Scientists estimate that there aren’t even one trillion stars in our galaxy (only 200 to 400 billion). Lined up end to end, one trillion dollar bills would circle the earth an incredible 380 times.
But our debt has already surpassed $12 trillion. That’s 13 million tons of one-dollar bills. In order to haul off all that cash, you would need more than 100,000 semi trucks. If we laid $12 trillion one-dollar bills side-by-side and end-to-end, we could pave all U.S. highways, streets, and county roads more than twice.
The website Defeat the Debt provides figures like those that put debt levels in understandable perspectives.
If I spent $1 billion a day, it would take just under 34 years of spending to reach the level of our national debt. Yet our federal government takes in trillions of dollars in revenue each year, and they still managed to run up a deficit this massive.
Our national debt wasn’t always so spectacular: only in 1982 did government break the $1 trillion mark. By 1990, the debt was $3.2 trillion. By 2000, it was $5.6. On Sept. 30, 2008, White House documents show that our public debt was $9.9 trillion. But in a matter of just a few months under the Obama administration, our debt has climbed by three trillion dollars. Bear in mind that it took over 200 years for the U.S. to accumulate one trillion dollars of debt. During that time we paid for one revolution, the Louisiana Purchase, a civil war, two world wars, the Great Depression, the Marshall Plan, numerous other conflicts, the space program, and so on. But in a matter of months, our federal government – despite trillions of dollars in tax revenue each year – has accumulated almost three trillion more?
And all of this money being spent by government will have to be paid back by the American taxpayer. According to USDebtClock.org, as this column went to press, the current share for each taxpayer was over $113,000. The bill signed on Friday by Obama states that any new spending must be paid for either through spending cuts or tax hikes. And which do you think the Obama administration and Congress will choose?
Our society simply cannot endure federal spending of this magnitude. Rather than argue over which political party or administration is to blame, we must work together to reverse this trend immediately, before it’s too late.
In: Economics · Tagged with: national debt, Obama administration
This is a VERY simple way to understand the tax laws. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this. The first four men — the poorest — would pay nothing; The fifth would pay $1: the sixth would pay $3; the seventh $7; the eighth $12; The ninth $18. The tenth man — the richest — would pay $59. That’s what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement — until one day, the owner threw them a curve.
“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20. “So dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six — the paying customers? How could they divvy up the $20 windfall so that everyone would get his “fair share?” The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would end up being *paid* to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth Man with a of $52 instead of his earlier $59.
Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth. “But he got $7!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got seven times more than me!” “That’s true!” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!” The nine men surrounded the tenth and beat him up. The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They’re $52 short!
And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
In: Economics · Tagged with: tax cuts, Ten Men Went To Dinner
In: Economics · Tagged with: Barack Obama
As I write this, the U.S. national debt is 12,385,926,000 and counting. And when watching the debt clock, the millions digit goes about as fast as the dollar when you are pumping gas.
So in order to understand how much a trillion actually is – let alone 12 trillion – let’s put this into perspective.
Having done all the calculations myself, I then came across DefeatTheDebt.com, an amazing website that had apparently already done all the work far better than I could. And for my fellow critical thinkers, you can even verify their findings.
But it took from George Washington to Ronald Reagan before our debt reached $1 trillion. Now it’s over $12. Our society won’t last long if our politicians keep spending money that we don’t really have.
Of all the incredible things they put up, what really gets me is that if I spent $10 million dollars a DAY, it would still take me 273 YEARS to spend one trillion dollars. And that’s without a few trillion dollars of revenue coming in each year. Knowing that, how in the hell has Congress managed to spend $12 trillion dollars more than what taxpayers already give them???
In: Economics · Tagged with: Congress, fraud waste and abuse, national debt
This kind of investing strategy could only come from politicians. Ed Yardeni (subscription only – via Reuters blog) writes:
The Obama Administration is touting that their stimulus program has saved or created 640,329 jobs since it was enacted back in February through the end of October. This number is updated and posted on the Administration’s recovery.gov web site. That amounts to $246,436 per job based on the $157.8bn that has been awarded so far! Total compensation earned by the average payroll employee during October, on an annualized basis, was $59,867. If the government had simply used the funds awarded so far to pay for a year’s worth of labor, that would have paid for 2.6mn jobs!
So the average American earned just under $60k per year. More than four unemployed Americans could have been paid for what it cost for one stimulus job had Washington simply cut checks instead of the incredible fraud, waste, and abuse perpetrated on our wallets by elected officials. But even better: had the federal government not taken the $787 billion from taxpayers in the first place, we would have had money available to pay employees in the first place.
In: Economics · Tagged with: stimulus, TARP
Although Gates was going somewhere that made sense, I always cringe when this subject comes up. Gates was pointing out that a 1993 law limiting executive pay to $1 million actually had the reverse effect (as government interventions tend to) and sent executive pay to new heights. He also spoke against the government’s purchase of private companies like AIG.
Now if Gates is the owner or shareholder of said Wall Street companies, his opinion actually means something. But for one American citizen to say that another citizen is making too much, or that their house is too big, etc. is a road that leads to a very bad place. Because that’s when government unconstitutionally steps in.
Not that I am some kind of anarchocapitalist – I am just a guy who fears government overstepping their role in the private sector.
In: Economics, Politics · Tagged with: anarchocapitalism, Bill Gates, Wall Street
The U.S. National Debt Clock is a great site to see just how much money is being spent. I like the hover feature that explains what each figure represents, such as the GDP or Currency and Credit Derivatives.
More evidence that the Democrats only represent the federal government, not their voters.
A study for the U.S. Chamber of Commerce found that Obama’s trade policies could lead to the loss of 585,800 U.S. jobs and over $40 billion in lost revenue.
This despite the fact that Obama just said that his stimulus created 1 million jobs. The Chamber of Commerce had better quit paying attention to facts and figures, and start listening to the president.
From Reuters via Yahoo News:
U.S. failure to approve the deals with Colombia and South Korea could “lead to a decline of $40.2 billion in U.S. exports of goods and services and U.S. national output failing to grow by $44.8 billion” in the next year or two as Canada and the EU fill the trade gap left by the United States, the study said.
In: Economics · Tagged with: Barack Obama, Democrats
Barack Obama just said that his stimulus has created one million jobs.
The Labor Department says that since the stimulus was enacted, the U.S. has lost 2.5 million jobs.
Who to believe?