Can The Economy Be Fixed: Follow up

The President returns to Washington tonight from his vacation in plan to be “ready” for any deals on the fiscal cliff that may come Thursday. A deal will be struck, rest assured that will happen. It is political suicide for everyone involved for there not to be some amicable arrangement where taxes do not increase on the middle and lower class.

So as promised my follow-up to fixing the economy:

Let us begin by reviewing the current state of the United States Economy.

Unemployment Rate:
7.7 % ???? (NO,WRONG)
According to a report released  by the Bureau of Labor Statistics (BLS), there were approximately 146,000 jobs added in the U.S. in November and the unemployment rate dropped to 7.7 percent, which would be the lowest since 2008. The report is based on a survey of households and employers, and does not accurately depict the reality of the jobless rate in the U.S. today.

The 7.7 percent rate is the government’s most widely publicized unemployment rate, known as the U-3, which takes into account only those who are collecting unemployment benefits and actively looking for work. It does not take into account those whose unemployment benefits have run out, those who have given up seeking work, those who are underemployed – desiring full time work but forced to work part-time, or those who have dropped out of the labor force more than There is also a factor in the calculations known as “seasonal adjustments.” The BLS uses a software program known as X-12 ARIMA, a complex modeling algorithm, to factor in seasonal adjustments to the jobs reports. As with any software program, the results are only as good as what the data input is and the results are easily manipulated. Job growth reports from the BLS have a 100,000 jobs margin of error on a monthly basis, but outside of that margin they are 90 percent accurate.

The Senate Republican Policy Committee said the real unemployment rate is not 7.7 percent, but 14.4 percent for November.

The “real” number of unemployed Americans is 22.7 million, Sen. John Barrasso’s (R-Wyo.) committee said in a release. “These are people who are unemployed (12.0 million), want work but have stopped searching for a job (2.5 million), or are working part-time because they can’t find full-time employment (8.2 million).”
“The difference from when President Obama took office is 475,000 more Americans unemployed or underemployed,” the committee continued.

“The labor force participation rate is 63.6 percent, a decline of 0.2 percentage points or 350,000 people. If the labor force participation rate were the same as when the President took office, the unemployment rate would be 10.7 percent. …The number of Americans searching for work for more than 27 weeks is 4.8 million, a decrease of 200,000 from October. The average number of weeks a worker is unemployed is 40.0 weeks — double from when President Obama took office.”

Consumer (-0.3) , Producer (-0.8) and U.S. Import (-0.9) prices are all down. Quarterly productivity is up 2.9% and the Employment cost index has a -0.1% change to 0.4% from 0.5%

Okay! Awesome! But what does all this crap mean!
The cost to import goods went down. The cost for producers to make and sell goods went down because of it. So people like you and me see a small price lowering. You saw this happen when gas dipped for about a week and now the price is going back up.

I went and did some more reading. Business Insider did a whole work up on how to fix the economy. Really a lot of effort into it. So I am going to call-out this article.

“Now, some people argue that the way to fix the economy is to give tax cuts to the highest-earning Americans–the “job creators”–so that they can invest in new companies and create jobs. Well, we’d all like to pay fewer taxes, but unfortunately, the “tax cuts for the rich” approach almost certainly won’t work. Here are a few reasons why:”

  • The richest Americans and companies already have plenty of cash
  • The reason these rich Americans and companies aren’t investing and “creating jobs” is that most American consumers (customers) are broke
  • Rich Americans actually don’t “create jobs”–the whole economy creates jobs
  • We’ve been trying the “tax cuts for the rich” approach for three decades, and it is making the inequality problem worse, not better

Now, some other people are arguing that the way to fix the economy is to increase taxes on the rich and companies and “redistribute” this wealth to American consumers.

Well, we will probably need to raise taxes on everyone a bit to reduce the budget deficit (even if we reduce spending–the gap is that big), but this “wealth redistribution” approach also almost certainly won’t work. Here are a few reasons why:

  • The key to creating a sustainable economic recovery is to get the private-sector cranking, not the public sector
  • Having the government collect taxes and write checks to more than half the country to make things “fairer” will understandably ruffle the feathers of those who are paying those taxes
  • Class warfare won’t help anyone
  • This is America: We solve our own problems in this country–we don’t wait for someone else to come along and give us a handout.

So, then, if the answer isn’t 1) cutting taxes for rich Americans and companies, or 2) raising taxes on the rich and giving the money to the poor, what’s the answer?

Well: Wages are low and profits are at a record high. This has created a situation in which American corporations and their owners are rich and American consumers are broke. so, how do we fix the problem? We persuade American corporations (and their owners) to hire more employees and pay them more, thus giving these employees more spending money. In other words, we take some of those surplus corporate profits and invest them in Americans.

Sounds reasonable right? No, sorry, wont work, and not because “corporations are greedy”. Get your head out of the gutter and stop blaming everyone else. This could work IF you literally unraveled every ounce of regulations and workers rights and maybe even gave back the ability for a nine-year-old to drop out of school and go be a proud factory worker.

Corporations will do two things above all others: Produce a product or service at or below their competition and two make every cut and screw to do it as cheaply as possible. Cheaper the output costs, the higher the return. If I was a CEO I wouldn’t even have a business here. It would be cheaper to go to Malaysia or Singapore and hire those tiny fingers to make those tiny stitches and make that new fashion fad all of you love so much.

Owning a business in America that produces a good is a losing scenario. Because of labor laws and “workers rights and unions” it creates a scenario that results in this outcome. Business Common Sense: Higher costs for me mean higher costs for you. Gordon Gekko is who we all wanted to be. Now we are paying for it.

Remember this?
The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

Increase minimum wage to lets say $12.00/h ? That just creates inflation and the costs of everything go up to match the fiscal difference. Your back where you started. Gordon and “Greed is Good” didn’t work so well did it?

So now your stuck with a Federal Government that made 2.2 Trillion last year in revenue and has a proposed budget of 11 Trillion dollars. another 8.8 Trillion added to the deficit? Maybe more? A Federal Government that made 2.2 Trillion dollars in revenue and that revenue does not even cover the costs of what it absolutely must pay for as mandated by the Constitution. People keep saying “Social Security is paid for”. I’m Sorry but unless it has its cost covered by POSITIVE REVENUE and not BORROWED REVENUE. Then it is not paid for. It is simply having the check forwarded to our children and theirs C/O Broke American Tax Payers of America in the year 2012-13.

As an American I cannot leverage my debt to my debtors to borrow more money. My negative equity in my debts cannot be used to borrow more money. My assets are offset by the negative or lack of equity in my debts when I go to borrow. So HOW and WHY is it acceptable for our government to do so? Why? when our Government has a negative debt to income ratio do they continue to run our country into the dirt with more spending and borrowing?

I hold strong to the fact that in order to fix our economy we must grow the value of the dollar. To do so we must create a stronger and lean government that must run at a surplus annually. To do so we must require our government to sever limbs, digits, and bleed like Christ on a cross if necessary to redeem itself as an entity that is still even worth following.

There is a growing sense of REVOLT in this nation and I for one am damn glad. Its about time the American people get pissed and truly begin contemplating if this Government is THE government we need in power and control anymore. Whether or not THIS Government was the intention of our founding fathers. IF THIS Government can do what is necessary to correct itself for the good of the people. NOT For the good of the Government. For the People. I for one doubt that Republicans and Democrats have the answer. Neither seem to be able to accomplish much more than squabbling over trivial sums of money and trivial issues when compared to the larger issues at hand.

A measly and worthless 100,000 Billion Dollars in additional revenue from the upper “1%”. What will this vast sum of money accomplish in the greater scheme of things? 11 Trillion dollar Budget, 16 Trillion Dollar Debt. I have yet to hear the question asked in Washington. Exactly what does this major arguing point hope to accomplish? What if anything does either side have in plan for the 11 Trillion Dollar Budget and the 16 Trillion dollar debt? Republicans do not want to give up the 100,000 Billion, Democrats want the 100,000 Billion. You answer is: It does nothing for it either way. Such large Sums of money are difficult sometimes to picture. So lets say this to get some perspective:

The budget is $11,000 Dollars.
We are $16,000 Dollars in Debt.
Our Government leadership is arguing over $100.00 Dollars. They have spent A MONTH arguing and bickering and holding press conferences and calling each other names like school children over what in perspective is $100.00 Dollars. Now check this out… I could make this even worse…

The budget is $1,100 Dollars.
We are $1,600 Dollars in Debt.
Our Government leadership is arguing over $10.00 Dollars.

The budget is $11 Dollars.
We are $16 Dollars in Debt.
Our Government leadership is arguing over $1 Dollar.

I can keep reducing this and showing the perspective even further but I think you get the picture. Slavery means to work on the behalf of someone else on a non-voluntary basis – without receiving compensation for your labor. That means, you work for the benefit of someone else for free, whether you like it or not.

It’s a simple equation:
N is the rate at which redistribution of income is non-voluntary
X is the current rate of all taxes combined.
S is the Boolean variable whose value determines whether the condition of slavery exists.

N = ?
X = 60
Bool S

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IF X >= N
S = true;
ELSE
S = false;
ENDIF

So I ask you. At what percentage of your income being taxed or to be “redistributed” or to go to the Government makes you a slave? You are already under the current tax code working from January to May in order to pay your tax liability. That is five months of income that your paying the Government before you begin to even pay for your own life. Nearly half of your income.

This is the Government you re-elected America. The Republican and Democrat. The same Ten percent approval rating Congress. The same over spending, raise the debt ceiling, weaken the dollar, increase the debt, usurp the Constitution American Government we have had for the entirety of my thirty years on this earth.

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