Posts Tagged ‘debt

23
Oct
13

The Government Can Spend Its Way Out of Debt

I have been distant in the world of politics lately. I still read political news on occasion but to be honest I am completely disenfranchised by it. To me the ideas and methods purported by politicians (and then supported by the public either directly or indirectly by their silence) is mind boggling.

Let’s face it, we are a broken nation that is in debt. Anyone with an inkling of politics, economics or finances should know that spending yoru way out of debt is not only unreasonable but also an absolutely ridiculous idea. You see, spending money to make money can work for individuals or businesses and we do it all the time. Individuals will invest in certifications, testing, college, and investments in hopes that their spent money will make them something later in life. Their money investment will yield something because they hope that they will be able to produce more with their time/labor with their new skill, certification, or passing test score. A business will also invest to try to make a new product that isn’t on the market, to make a product/service more profitable (less waste) or bring marketplace recognition. Individuals and companies will spend money they don’t have in hopes that they can later make their time more profitable.

The opposite is true of governments because governments do not produce anything – unless of course you count false dreams, hostility, and potentially unfair marketplaces.

Have you ever been to the gas pump and complained about the gas prices? Sure, we all have. Many other people complain about the big, evil oil companies raking in profits. Sure, those companies have been known to be profitable – after all, we all use their products… not only in our cars but in much of our manufacturing (i.e. plastics, etc.). If we are all using their products isn’t it logical to believe that they would indeed be very profitable? Of course! This isn’t even my point of the matter though – my point is that governments get their scoop of money just simply for existing.

According to the Tax Foundation California is the second worst state for taxing gas. If one checks out California’s Gasoline Price Breakdown chart for 2013 they can see that for a $4.00/gal of gas the breakdown looks like this – $2.54 for the crude oil, $0.35 for distribution/marketing profits, $0.43 for the refinery and their profits, $0.02 for California gas tank tax, $0.09 for the state tax, $0.36 for the state excise, and $0.18 for the federal tax.  To put it another way this is $2.54 for the materials, $0.78 to get it out of the ground and refine it (plus profits), and $0.65 to the government – respectively this is 63.5% for the matrials, 19.5% for producing and profits, and 16.25% for the government. If you are getting my drift here I am telling you that the government “makes” almost as much money as the oil company… yet does absolutely nothing in the process to make the product!

Repeatedly we run into this problem of budgeting. The story ends the same all the time and has for some time now – the debt ceiling is raised and spending cuts are promised for a later date. This is absolutely ridiculous and history has shown us that no budget spending cuts (at least nothing significant) will be implemented. Our government is hellbent on spending it’s way out of debt. The problem of course is that no matter what it spends it will never produce anything and if never produces anything then it will never have a return on that investment. All it can do is continue to take from those who have and give to those who do not have.

If anyone can tell me how raising taxes to give to those who do not have  – whether it be in the form of stimulus checks, welfare checks, food stamps, tax refunds to those who don’t pay taxes, or free health care – will bring us out of debt I’d be glad to listen.

Advertisements
30
Jul
11

Thank you for the NO: Stay Strong

In the midst of all this media hype of the debt apocalypse with it’s Twittering moron followers to thank the people who are trying to bring accountability to Washington by making Washington live within it’s own financial means. This entire debt ceiling debate has been enlightening – both of the political parties and of the uneducated American public.

For nearly the dawn of our country we have had a two party system. In recent times – Republicans versus Democrats. With the election of 2010, we had a shift in the candidates with the movement of the political ideology of the Tea Party. Now, the Tea Party isn’t really a party at all, it is more of an outcry against RINOs/Neo-cons and a desire to return to classical Republicanism. It is this group who was voted into power by demand that Washington downsize. To me this signals that the public is tired of the Washington gravy train and has spoken via votes to stop that train. This political phase shift, especially in the House, has caused the GOP to re-evaluate their platform.

For every election that I can remember people have complained about politicians campaigning whilst riding a magic carpet of promises of which they would not or could not keep when elected. So here we have these “Tea Party” candidates faced with an important vote – to vote to expand Washington or to downsize it. Unlike most groups, this group has chosen to uphold their campaign promise even if it means their demise in the coming election. For that alone, you are my heroes! You have been elected to represent and you are doing just that despite the public outcry for your heads.

But really, the public is all about the gravy train when it comes to their feeding cycle at the Washington trough. It reminds me of war in that many people are eager to go to war so long as it doesn’t affect them. Much of the media and many others (including the President) have whipped up a crazy scenario to drive home fear of the American household – doom and gloom. To me it seems like they are all saying one thing, “Give us more money or you will be unprotected and starve.” It seems to smack in the face of what our government is and what it should be. Our government is not our daddy and certainly not our daddy that gives us allowance. So why is it that we are all sitting around biting our nails that our government will “shut down”? What ever happened to the Power of the People? Or, the People running society and being the muscle of America (hello, Rosie the Riveter)?

While this does not pertain to a physical safety issue I find this quote to be ever so true today. Benjamin Franklin said, “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” Likewise, I think those who are willing to allow our government to give up their duty to maintain a positive fiscal policy deserve neither liberty, safety, or the gift of living in America. America isn’t about jockeying for a handout – corporate or individual – it is about living the American dream that if you put in hard work you will reap the benefits. I am not quite sure that is the case any more.

I hear a lot of crying from people about our AAA rating being ruined if we don’t increase the debt limit. I call horseshit. If you haven’t noticed everything is rising in price – check the commodities and see for yourself. We have a bad addiction to debt and sooner or later we must pay the piper. What then? We print more money to pay it off? Yes, that will be our government’s answer. Inflation will be the real ruin of our credit rating, not us refusing to be more fiscally responsible and to hold our government more responsible.

So in conclusion, thank you to those members of the House for standing strong while your own party badgers you, the mainstream media badgers you, the Democrats badgers you, the President badgers you, and the uneducated Americans badger you. I support you.

Thanks to the following Representatives for voting NO on S. 627.
Justin Amash (Mich.)
Michele Bachmann (Minn.)
Chip Cravaack (Minn.)
Jason Chaffetz (Utah)
Scott Desjarlais (Tenn.)
Tom Graves (Ga.)
Tim Huelskamp (Kans.)
Steve King (Iowa)
Tim Johnson (Ill.)
Tom McClintock (Calif.)
Mick Mulvaney (S.C.)
Ron Paul (Texas)
Connie Mack (Fla.)
Jim Jordan (Ohio)
Tim Scott (S.C.)
Paul Broun (Ga.)
Tom Latham (Iowa)
Jeff Duncan (S.C.)
Trey Gowdy (S.C.)
Steve Southerland (Fla.)
Joe Walsh (Ill.)
Joe Wilson (S.C.)

18
Dec
09

What ONE TRILLION dollars looks like in dollar bills

(Original HERE)

Have you ever thought about it. What would 1 trillion dollars look like, layed out in front of you?

I mean, these numbers numbers are tossed around like doggie treats.

So I thought I’d take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars looks like.

We’ll start with a $100 dollar bill. Currently it’s the largest U.S. denomination in general circulation.

Pretty much, everyone has seen a $100 bill. But fewer have owned them. :-)

They’re also guaranteed to make friends wherever you go!

$100 

A packet of one hundred $100 bills is less than 1/2″ thick and contains $10,000.

It’s fits in your pocket easily and is more than enough for week or two of shamefully decent fun.

 

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000).

You could stuff that into a grocery bag and walk around with it.

 

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable.

It fits neatly on a standard pallet…

 

And $1 BILLION dollars… now we’re really getting somewhere…

 

Next we’ll look at ONE TRILLION dollars.

This is that number we’ve been hearing about so much.

What is a trillion dollars anyway?

Well, it’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros ($1,000,000,000,000)

You ready for this?

It’s pretty surprising.

Scroll down…I give you $1 trillion dollars

Almost there…

 

(And notice those pallets are double stacked.)

So the next time you hear someone toss around the phrase “trillion dollars”… that’s what they’re talking about.

11
Nov
09

U.S. National Debt Clock : Real Time

U.S. National Debt Clock : Real Time.

Pretty scary if you ask me.

11
Oct
09

Could You Survive With No Money? Meet the Guy Who Does.

(Original here)

DANIEL SUELO LIVES IN A CAVE. UNLIKE THE average American—wallow….ing in credit-card debt, clinging to a mortgage, terrified of the next downsizing at the office—he isn’t worried about the economic crisis. That’s because he figured out that the best way to stay solvent is to never be solvent in the first place. Nine years ago, in the autumn of 2000, Suelo decided to stop using money. He just quit it, like a bad drug habit.

His dwelling, hidden high in a canyon lined with waterfalls, is an hour by foot from the desert town of Moab, Utah, where people who know him are of two minds: He’s either a latter-day prophet or an irredeemable hobo. Suelo’s blog, which he maintains free at the Moab Public Library, suggests that he’s both. “When I lived with money, I was always lacking,” he writes. “Money represents lack. Money represents things in the past (debt) and things in the future (credit), but money never represents what is present.”

On a warm day in early spring, I clamber along a set of red-rock cliffs to the mouth of his cave, where I find a note signed with a smiley face: CHRIS, FEEL FREE TO USE ANYTHING, EAT ANYTHING (NOTHING HERE IS MINE). From the outside, the place looks like a hollowed teardrop, about the size of an Amtrak bathroom, with enough space for a few pots that hang from the ceiling, a stove under a stone eave, big buckets full of beans and rice, a bed of blankets in the dirt, and not much else. Suelo’s been here for three years, and it smells like it.

Night falls, the stars wink, and after an hour, Suelo tramps up the cliff, mimicking a raven’s call—his salutation—a guttural, high-pitched caw. He’s lanky and tan; yesterday he rebuilt the entrance to his cave, hauling huge rocks to make a staircase. His hands are black with dirt, and his hair, which is going gray, looks like a bird’s nest, full of dust and twigs from scrambling in the underbrush on the canyon floor. Grinning, he presents the booty from one of his weekly rituals, scavenging on the streets of Moab: a wool hat and gloves, a winter jacket, and a white nylon belt, still wrapped in plastic, along with Carhartt pants and sandals, which he’s wearing. He’s also scrounged cans of tuna and turkey Spam and a honeycomb candle. All in all, a nice haul from the waste product of America. “You made it,” he says. I hand him a bag of apples and a block of cheese I bought at the supermarket, but the gift suddenly seems meager.

Suelo lights the candle and stokes a fire in the stove, which is an old blackened tin, the kind that Christmas cookies might come in. It’s hooked to a chain of soup cans segmented like a caterpillar and fitted to a hole in the rock. Soon smoke billows into the night and the cave is warm. I think of how John the Baptist survived on honey and locusts in the desert. Suelo, who keeps a copy of the Bible for bedtime reading, is satisfied with a few grasshoppers fried in his skillet.

HE WASN’T ALWAYS THIS WAY. SUELO graduated from the University of Colorado with a degree in anthropology, he thought about becoming a doctor, he held jobs, he had cash and a bank account. In 1987, after several years as an assistant lab technician in Colorado hospitals, he joined the Peace Corps and was posted to an Ecuadoran village high in the Andes. He was charged with monitoring the health of tribespeople in the area, teaching first aid and nutrition, and handing out medicine where needed; his proudest achievement was delivering three babies. The tribe had been getting richer for a decade, and during the two years he was there he watched as the villagers began to adopt the economics of modernity. They sold the food from their fields—quinoa, potatoes, corn, lentils—for cash, which they used to purchase things they didn’t need, as Suelo describes it. They bought soda and white flour and refined sugar and noodles and big bags of MSG to flavor the starchy meals. They bought TVs. The more they spent, says Suelo, the more their health declined. He could measure the deterioration on his charts. “It looked,” he says, “like money was impoverishing them.”

The experience was transformative,…. but Suelo needed another decade to fashion his response. He moved to Moab and worked at a women’s shelter for five years. He wanted to help people, but getting paid for it seemed dishonest—how real was help that demanded recompense? The answer lay, in part, in the Christianity of his childhood. In Suelo’s nascent philosophy, following Jesus meant adopting the hard life prescribed in the Sermon on the Mount. “Giving up possessions, living beyond credit and debt,” Suelo explains on his blog, “freely giving and freely taking, forgiving all debts, owing nobody a thing, living and walking without guilt . . . grudge [or] judgment.” If grace was the goal, Suelo told himself, then it had to be grace in the classical sense, from the Latin gratia, meaning favor—and also, free.

By 1999, he was living in a Buddhist monastery in Thailand—he had saved just enough money for the flight. From there, he made his way to India, where he found himself in good company among the sadhus, the revered ascetics who go penniless for their gods. Numbering as many as 5 million, the sadhus can be found wandering roads and forests across the subcontinent, seeking enlightenment in self-….abnegation. “I wanted to be a sadhu,” Suelo says. “But what good would it do for me to be a sadhu in India? A true test of faith would be to return to one of the most materialistic, money-….worshipping nations on earth and be a sadhu there. To be a vagabond in America, a bum, and make an art of it—the idea enchanted me.”

THERE ISN’T ENOUGH SPACE IN SUELO’S cave for two, so I sleep in the open, at the edge of a hundred-foot cliff. No worries about animals, he says. Though mountain lions drink from the stream, and bobcats hunt rabbits under the cottonwoods, the worst he’s experienced was a skunk that sprayed him in the face. Mice scurry over his body in the cave, and kissing bugs sometimes suck the blood from under his fingernails while he sleeps. He shrugs off these indignities. “After all, it’s their cave too,” he says. I hunker down near a nest of scorpions, which crawl up the canyon walls, ignoring me.

The morning ritual is simple and slow: a cup of sharp tea brewed from the needles of piñon and juniper trees, a swim in the cold emerald water where the creek pools in the red rock. Then, two naked cavemen lounging under the Utah sun. Around noon, we forage along the banks and under the cliffs, looking for the stuff of a stir-fry dinner. We find mustard plants among the rocks, the raw leaves as satisfying as cauliflower, and down in the cool of the creek—where Suelo gets his water and takes his baths (no soap for him) —we cull watercress in heads as big as supermarket lettuce, and on the bank we spot a lode of wild onions, with bulbs that pop clean from the soil. In leaner times, Suelo’s gatherings include ants, grubs, termites, lizards, and roadkill. He recently found a deer, freshly run over, and carved it up and boiled it. “The best venison of my life,” he says.

I tell him that living without money seems difficult. What about starvation? He’s never gone without a meal (friends in Moab sometimes feed him). What about getting deadly ill? It happened once, after eating a cactus he misidentified—h….e vomited, fell into a delirium, thought he was dying, even wrote a note for those who would find his corpse. But he got better. That it’s hard is exactly the point, he says. “Hardship is a good thing. We need the challenge. Our bodies need it. Our immune systems need it. My hardships are simple, right at hand—they’re manageable.” When I tell him about my rent back in New York—$2,400 a month—he shakes his head. What’s left unsaid is that I’m here writing about him to make money, for a magazine that depends for its survival on the advertising revenue of conspicuous consumption. As he prepares a cooking fire, Suelo tells me that years ago he had a neighbor in the canyon, an alcoholic who lived in a cave bigger than his. The old man would pan for gold in the stream and net enough cash each month to buy the beer that kept him drunk. Suelo considers the riches of our own forage. “What if we saw gold for what it is?” he says meditatively. “Gold is pretty but virtually useless. Somebody decided it has worth, and everybody accepted this decision. The natives in the Americas thought Europeans were insane because of their lust for such a useless yellow substance.”

He sautés the watercress, mustard leaves, and wild onions, mixing in fresh almonds he picked from a friend’s orchard and ghee made from Dumpster-dived butter, and we eat out of his soot-caked pans. From the perch on the cliff, the life of the sadhu seems reasonable. But I don’t want to live in a cave. I like indoor plumbing (Suelo squats). I like electricity. Still, there’s an obvious beauty in the simplicity of subsistence. It’s an un-American notion these days. We don’t revere our ascetics, and we dismiss the idea that money could be some kind of consensual delusion. For most of us, it’s as real as the next house payment. Suelo doesn’t take public assistance or use food stamps, but he does survive in part on our reality, the discarded surfeit of the money system that he denounces—a system, as it happens, that recently looked like it was headed for the cliff.

Suelo is 48, and he doesn’t exactly have a 401(k). “I’ll do what creatures have been doing for millions of years for retirement,” he says. “Why is it sad that I die in the canyon and not in the geriatric ward well-insured? I have great faith in the power of natural selection. And one day, I will be selected out.” Until then, think of him like the raven, cleaning up the carcasses the rest of us leave behind.

06
Aug
09

Healthcare Plan Based on Economic Fantasy

As the healthcare debate rages on, there is one reality that even the proponents of this hostile takeover of healthcare by government cannot ignore — and that is money. The government simply does not have the money for a new, expansive, public healthcare plan. The country is in a deep recession that will deepen even further with the coming collapse of the commercial real estate market. The last thing we need is for government to increase and expand taxes to pay for another damaging, wasteful program. Foreigners are becoming less enthusiastic about buying our debt, and creating another open-ended welfare program when we cannot pay for what is already in place, will not help. Champions of socialized medicine want to tax the rich, tax businesses that already cannot afford to provide health plans to employees, and tax people who don’t want to participate in the government’s scheme by buying an approved healthcare plan. Presumably, all these taxes are to induce compliance. This is not freedom, nor will it improve healthcare.

There are limits to how much government can tax before it kills the host. Even worse, when government attempts to subsidize prices, it has the net effect of inflating them instead. The economic reality is that you cannot distort natural market pressures without unintended consequences. Market forces would drive prices down. Government meddling negates these pressures, adds regulatory compliance costs and layers of bureaucracy, and in the end, drives prices up.

The non-partisan CBO estimates that the healthcare plan will cost almost a trillion dollars over the next ten years. But government crystal balls always massively underestimate costs. It is not hard to imagine the final cost being two or three times the estimates, even though the estimates are bad enough.

It is still surreal that in a free country we are talking only about HOW government should fix healthcare, rather than WHY government should fix healthcare. This should be between doctors and patients. But this has been the discussion since the 60’s and the inception of Medicare and Medicaid, when government first began intervening to keep costs down and make sure everyone had access. The result of Medicaid/Medicare price controls and regulatory burden has been to drive more doctors out of the system — making it more difficult for the poor and the elderly to receive quality care! Seemingly, there are no failed government programs, only underfunded ones. If we refuse to acknowledge common sense economics, the prescription will always be the same: more government.

Make no mistake, government control and micromanagement of healthcare will hurt, not help healthcare in this country. However, if for a moment, we allowed the assumption that it really would accomplish all they claim, paying for it would still plunge the country into poverty. This solves nothing. The government, like any household struggling with bills to pay, should prioritize its budget. If the administration is serious about supporting healthcare without contributing to our skyrocketing deficits, they should fulfill promises to reduce our overseas commitments and use some of those savings to take care of Americans at home instead of killing foreigners abroad.

The leadership in Washington persists in a fantasy world of unlimited money to spend on unlimited programs and wars to garner unlimited control. But there is a fast-approaching limit to our ability to borrow, steal, and print. Acknowledging this reality is not mean-spirited or cruel. On the contrary, it could be the only thing that saves us from complete and total economic meltdown.

(link)

25
Jan
09

The Truth in the US National Debt

Recently we have heard a lot of talk about the bailouts pushing our debt to over 11 trillion dollars. And, of course nobody can fathom numbers like that. Here, for starters, let me write it out with all the zeros – 11,000,000,000,000 trillion dollars. That is a lot of zeros huh?

In 2003 the median household made about $50,000 a year. So with that said, it would take 220 million households to work for free for a year to pay off a debt like that. More interesting is that we only have approximately 305 million people in America, and of course not all of them are working and not all of them are making the median $50k. In other words, it would take us a few years of working for free.

Furthermore, do you realize what $1 TRILLION is and what has bought in the past. Here is a list from the WSJ.

  • One trillion dollars is about one-third of annual US government spending and 13% of the US economy
  • It is more than the GDP of all but 12 countries in 2007 (US, Japan, Germany, China, UK, France, Italy, Spain, Canada, Brazil, Russia, and India, in that order)
  • One trillion is roughly one-sixth of the entire outstanding US federal debt held by the public [one-tenth if you include intra-governmental debt (such as Social Security IOUs)]
  • It is the cost that former Vice President Gore attaches to his plan to liberate the US of carbon-based energy.
  • From an historical perspective, we spent:
    1. $15 million on the Louisiana Purchase; $261 million in today’s dollars; and $409 billion rescaled as a share of the current economy
    2. $775 billion in rescaled dollars on the Marshall plan
    3. $7 billion in current dollars for the Panama Canal
    4. $32 billion for the New Deal; $500 billion in today’s dollars
    5. $140 billion for the Apollo space program in today’s dollars
    6. $29 billion in today’s dollars for the Manhattan project — to develop the atomic bomb
    7. $114 billion for the interstate highway system; $800 billion today
    • The WSJ concludes: “The only specific American endeavor, ever, that tipped the trillion-dollar scale was World War II. That war – in which 16 million US troops [including some of you] fought for four years over two fronts – cost about $4 trillion in adjusted dollars, or $17 trillion in today’s GDP.

    Does anyone else see this as being so incredibly messed up?

    To make matters worse, this is the raw national debt. This is not the debt including interest and the money promised to the elderly, the Baby Boomers, and other citizens.

    That number is 57 trillion dollars. (link) This is five times what your politician will admit to. Problem? Hello!

    And now we have a President that promises to spend his way out of this fiasco. Oh great. Can you imagine doing this in your own personal life?

    This is what I hear, “Hey honey, we have a debt of $500,000… So, go buy a Porsche 911, give all the neighbors a few thousand dollars, and throw an extravagant party with filet mignot, lobster, and an open bar for anyone who can stumble in. Oh don’t worry about the cost honey. We are going to rob the rich guy down the street. He has too much anyways.”
    This is what I call….. Bullshit.




    Quotes:

    "We are apt to shut our eyes against a painful truth... For my part, I am willing to know the whole truth; to know the worst; and to provide for it." - Patrick Henry

    "Politicians and diapers both need to be changed, and for the same reason." - Anonymous

    "Right is right, even if everyone is against it, and wrong is wrong, even if everyone is for it." - William Penn

    "Naturally the common people don't want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country" - Hermann Goering

    "I know that nothing good lives in me, that is, in my sinful nature. For I have the desire to do what is good, but I cannot carry it out. For what I do is not the good I want to do; no, the evil I do not want to do this I keep on doing." - Romans 7:18-19

    "Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover." - Mark Twain

    Categories