President Obama and his failed stimulus package

The massive Federal Stimulus package that was passed to “save the economy” cost the taxpayers well over 800 billion dollars.  This money was borrowed and will have to be paid back with interest.

There is no doubt that this program created or “saved” 2-3 million temporary jobs.  Most of the impact of the stimulus plan has already been realized.

I opposed the Federal stimulus plan for several reasons:

  1. I hate temporary measures like this.
  2. We are broke and need to stop borrowing and printing money.
  3. The plan creates winners and losers in the private sector and that is wrong.
  4. The jobs were temporary jobs and come at an incredible cost

The Federal Stimulus plan was supported by President Bush, President Obama, the entire Democratic leadership in Congress AND the entire Republican leadership in Congress.  About 3/4 of the Democratic members of Congress supported it and about 1/3 of the Republicans in Congress supported it.

Much of this money went to promote ‘green” jobs.  President Obama and his “green” jobs plan is an absolute failure. One of my favorite blogs has a great post about this that is well worth your time.  In this example The Federal government provided loan guarantees on 535 million dollars.  The firm was showcased by President Obama as a success story.  The firm is now filing bankruptcy and the taxpayers will lose the money invested in this company…  1100 employees retained their jobs for eighteen months and now will have to find new jobs…

The Government has no business picking winners and losers in the private sector.

Mike

President Obama and his upcoming jobs plan, part 2

The second component of President Obama’s upcoming “jobs” plan will be to extend Federal unemployment benefits; again.

This issue has been discussed and argued over on this blog repeatedly.  Some of the blog posts on this subject have over 100 comments.  The readers of the blog are split on this issue.

Generally speaking states offer up to 26 weeks of unemployment benefits.  Once these are exhausted then the unemployed can qualify for between 34 weeks and 53 weeks of Federal unemployment benefits. Congress has enacted several emergency measures that grant another 20 weeks to unemployed workers in states with unemployment over 8%.  In many cases (states with unemployment rates over 8%) the unemployed can draw unemployment benefits for 99 weeks.  In other words in many states the unemployed can draw benefits for almost two years.

The Federal extension expires at the end of this year.  President Obama will propose that these extended benefits be extended for another year.  This will cost 60 billion dollars.

I oppose this because I do not think paying unemployment benefits for just short of two years is ever reasonable.  I would think 79 weeks in states with unemployment over 8% is more than enough.

The pros of this extension include:

  1. The money goes to people who will turn around and spend it.  This stimulates the economy.

The cons of this extension include:

  1. It will cost 60 billion dollars.
  2. Study after study has proved that extending unemployment benefits discourages people from going out and getting a job or starting their own business.  This is indisputable.

At some point we have to start limiting the “nanny” state.  As the readers of this blog know I am in favor of ELIMINATING the entire Federal unemployment system.  I personally feel that each state should run their own system.

Mike

Tom Henry goes negative

The Mayor’s race is heating up.  Our incumbent Democratic Mayor, Tom Henry, is running a negative ad on television that attacks Republican candidate Paula Hughes.  The ad is relatively negative and to be honest with you it caught me by surprise.  Mayor Henry generally does not stoop to this kind of tactic and I am disappointed in him.

Basically the ad points out past times when Paula Hughes has raised taxes as an elected official and points out that she is now making a big deal about promising to NEVER raise taxes as Mayor.  I have not researched the entire ad; however, it seems like most of the ad is factual; however, part of it is clearly not factual.  I think Mayor Henry’s ad would have been legitimate if all of the facts quoted in the ad were actually accurate…

I updated this portion of the post at 6 PM on August 31st, 2011.  Kevin Knuth sent me a detailed document documenting past stances by Paula Hughes.  In the post I specifically said “I have not researched the entire ad; however, it seems like most of the ad is factual; however, part of it is clearly not factual.”

This post got a lot of comments and I was asked to fact check the ad.  The ad is even more accurate than I thought when I first heard it.  I would have to say the advertisement is AT LEAST 95% accurate.

Paula Hughes has advocated increasing taxes numerous times and it does bother me that she keeps running around Fort Wayne promising to never raise taxes with a record like hers…

I often listen to the Pat Miller Show on WOWO.  He interviewed disgraced former Republican Congressman Mark Souder yesterday and asked him about this negative ad.  I have several thoughts on this interview:

  1. Basically Mark Souder stated that he was relatively certain that Mayor Tom Henry would only run a negative ad if he we down in the polls.
  2. He further asserted that it was unusual that the negative ad was ran before Labor Day.
  3. Then he went off track and made some seriously false statements about how rarely he had used negative attack ads himself.  I could not stop laughing.  I laughed for at least two minutes.  Mark Souder is FAMOUS for his negative attack ads.  He ran them often and early.  He lied about this on the radio several times yesterday.  It was kind of sad to be honest with you.
  4. I am surprised that WOWO EVER decides to interview the disgraced Congressman.  Mark Souder needs to stay out of politics and resolve his personal problems.

My Mark Souder rant is now over…

I still have not decided who I am going to vote for in the Mayor’s race.  At least Tom Henry has finally agreed to one debate.

I expect Hughes and Henry to start slinging mud based on this last television ad that the Mayor campaign ran.

Mike

Full Time Office Manager wanted - Fort Wayne, Indiana

SBS CPA Group is a public accounting firm located on the north side of Fort Wayne near the intersection of Coldwater and Dupont. 

We are looking to hire a full time Office Manager. 

The expected start date is October 3rd, 2011.  Specific details concerning the job itself and instructions on how to apply our listed at the SBS CPA Group website. 

Mike Sylvester, CPA

President Obama and his upcoming jobs plan, post 1

I certainly hope that President Obama is not re-elected in 2012.  He has done a dismal job.  He was a MUCH better campaigner than President…  President Obama is touting the fact that he is going to unveil a detailed and comprehensive plan to “create jobs.”  I expect him to propose several things:

The first is that he is going to propose extending the “temporary” one year employee payroll tax cut; he wants to make it a two year “temporary” employee payroll tax cut.  One wonders if a year from now he will want to make it a “temporary” three year payroll tax holiday tax cut.  I wrote about this long ago and you can read my old post if you want to know more about this silly payroll tax cut.  This extension of the “temporary” payroll tax cut was agreed to by Dems and Reps behind closed doors in the December 2010 Lame Duck Session.  Basically this payroll tax cut will force the Federal government to put another 120 billion dollar IOU in the Social Security system (In other words the Federal Government will have to pay this money back that it is stealing borrowing.)  In 2012 an extra 120 billion dollars will be in the paychecks of Americans who work for regular wages.  Most Americans will turn around and immediately spend this money.  The positives of this proposal are:  it is easy to administer through company payroll, employees get this additional amount in every paycheck (Note it is capped at annual wages of $106,800), and the money only goes to those who work.  My problems with this proposal are:  The Federal Government is incurring more debt in order to stimulate the economy, I think it sets a horrible precedent since Social Security is already under-funded, when this payroll tax cut is allowed to expire it will act as a drag on the economy since employee checks will DECREASE, and I hate “temporary” provisions because they make our tax code increasingly more complicated.  So I oppose extending the payroll tax cut for another year.  That being said I do agree it will stimulate the economy and this is a much better choice than most of the other ideas that will arise from both major political parties.

Mike Sylvester

Firekeepers Casino

A friend and I went to Firekeepers last Saturday.  We spent the night in a hotel in Battle Creek.  It was the 3rd time I have been gambling since my daughter was born 10 years ago.  We had a great time.

There are two important things to point out about this trip.  First I won $531.  This is amazing as I never win.  Normally I lose $200 and go home…  Second is the fact that I ran into three different people I knew from Fort Wayne.  Each had went up there to gamble and those three were each in a group of their own.  Even more amazingly I went out to supper tonight with one of my clients and told him about my trip.  He was surprised because he was up at Firekeepers on Saturday as well and did not see me.

It is amazing how money money Fort Wayne area residents spend at nearby casinos.

We need one in downtown Fort Wayne.

Mike

The United States is in BIG trouble, Part 3

The amount of savings Americans have accumulated for retirement is pitiful.  There are major tax incentives in place to encourage Americans to save for retirement; especially Americans who make small and moderate incomes.

A recent survey of several thousand Americans who range in age from 18 years old to 65 years old shows that the median family in this age category has a total of $49,295 in retirement savings; the average is only $105,801.  This is absolutely pitiful and clearly shows that most Americans will not be able to ever retire.

A different recent survey was equally disappointing.  In this survey Americans were asked how they would pay for a $1000 emergency that arose.  The results were as follows:

  1. 36% have enough savings to pay the $1000 bill
  2. 17% would get the money from friends and/or family
  3. 17% would stop paying other bills; for example credit card payments and mortgages, and then accumulate the $1000 in that manner.  Basically they would “Rob Peter to pay Paul.”
  4. 12% would sell or pawn assets to raise the needed cash.
  5. 9% would take out a loan.
  6. 9% would take a cash advance on a credit card.
This is another survey that shows how bad the financial position of most Americans really is.  Roughly speaking this survey shows that only 1/3 of the adults surveyed have $1000 or more in savings that they can quickly access.
The long term financial position of most Americans is such that they can never retire.  This does not bode well for the next few decades in this country.
Mike Sylvester

Guest Post from William Larsen

Ben Lanka’s article on City Debt can be taken several ways. The annexation cost was $1,207 per person. Prior to the Annexation, the population of Fort Wayne was around 206,000. However, pre annexed Fort Wayne area has shrunk since 2000. The annexation decreased Fort Wayne’s debt per person from nearly $1,700 to now $1,600. In simple terms annexation was a tax grab of others wealth.

The statement that most intrigues me is “at least by comparison with some other cities, seems to have a fairly reasonable amount of debt” is just pure rationalization. The ability to incur debt or finance debt does not answer the first question that always should be asked. Is the purchase a necessary function of government? Roads are financed over 20 years, but how many of us actually have not seen routine maintenance of a road every five to ten years? Instead of a 20 year period, the period should be the useful life of the entity. A second reference was made to the US National Debt which has increased yearly since 1958. I would hope Fort Wayne would not look up to the Federal Government as a reference for how much debt was appropriate.

To me you save for what you want and you do not place the burden of your wants onto other generations. An individual is expected to pay back their debt within a set period of time and hopefully before their death. Why should a city that is over 150 years old not have a good idea of costs and use accrual accounting minimizing or eliminating debt all together?

Debt costs money each year. This is money that is no longer available for current expenses or saving for future expenses (projects). It is said that projects cannot be paid for with cash, why is this? Is it because politicians cannot keep their hands off piles of cash? It is the old saying “Pay me now or pay me more later.” We as a community would be much better off without any debt which would truly make us a very attractive location for business expansion and living.

William Larsen

Legacy Fort Wayne

Fort Wayne Mayor Tom Henry formed a committee of 15 individuals to make recommendations on how the Light Lease money would be spent.  The Light Lease money consists of about 38 million that will soon be available and another 39 million dollars that will be earned over the next fifteen years.  It looks like the committee will finally make recommendations on how the money should be spent.

As previously discussed on this blog I believe 100% of the money should be spent to help defray part of the costs the City of Fort Wayne will incur on the sewer overflow project.  Basically the City of Fort Wayne dumps a large amount of raw sewage into our rivers.  Fort Wayne has agreed to stop most of this discharge to our rivers.  Some of this has already been paid for with the 2009 utility rate increase of 86% that is already in place.

City Utilities plans on increasing sewer rates about 6% per year, EVERY year, from 2013 through about 2023. So rate payers will see a 6% annual increase each and every year during that time period.

Almost every citizen of Fort Wayne will benefit because we are discharging a lot less raw sewage into the rivers.  Almost every citizen would benefit by not having their sewer rates increased so much.  Yes AWB, there are a few people in Aboite and such that are not rate payers and would not benefit because they do not pay the sewer rates; however, they would still benefit from cleaner rivers.

The Legacy Fort Wayne group does have a website.  There is some very good information on it; however, it is a little out of date.  In fact, it currently says that the next meeting will be held on June 2nd (Note it is actually August 19th today.).

The Legacy Fort Wayne Group has looked through about 1000 proposals and they have done their best to sort through them.  The process they have used is very open and really pretty impressive in a lot of ways. The Fort Wayne Business Weekly (A great publication I read every week) has an interesting (and disturbing) article about the project.  Per that article:

  1. The Task Force will meet August 30th and discuss what proposals to send the Mayor.  They hope to send the Mayor recommendations by the end of September.
  2. There are 24 ideas where “they liked the idea or concept.

Some of the top 24 ideas were (my comments on bold):

  1. A public art trust (Good grief, this is a horrible idea)
  2. A building with studios where artists and tinkerers can invent and create (Good grief, this is a horrible idea)
  3. A downtown live/work space for artists (Good grief, this is a horrible idea)
  4. Core economic investments (I have no idea what this means, the Devil is in the details)
  5. The Headwaters Junction Project (Likely not something I support; however, would need to know more)
  6. Money for Indiana Tech to move the law school downtown (I would need to know more; however, I might actually support this depending on the details)
  7. Scholarship funds for science, technology, engineering, and math (Good grief, do we really want to spend tax payer money so a few people can be awarded scholarships)
  8. 2.15 million dollars in funding to fund a study on the impact passenger rail service could have on Fort Wayne.  Further this money would be used on some of the early steps to bring passenger rail to Fort Wayne (Good grief, needless to say this is a complete waste of money and should never be done)
  9. Grants and endowments for Economic Development (likely not something I would support; just used to pay a company or two to locate to Fort Wayne.  I do not like this; instead lower the tax rates of ALL BUSINESSES)
  10. An Academy of Sports and Health Center (Good grief, another complete waste of money)

The list goes on.  I do think the task force has done a good job compiling projects.  I just hope they choose to use the money on the sewer overflow project rather than waste it on useless projects that will only benefit a small number of people.

Mike Sylvester

Fort Wayne Mayor’s race

The Fort Wayne Mayor’s race has been pretty quiet.  There are occasional press releases and announcements; however, the race has yet to heat up.

I have certainly not been impressed with our current Democratic Mayor (Mayor Henry); however, that being said he has not been awful either.  I have always considered Mayor Henry to be a Mayor who was sort of a place holder.  He does not take a lot of risks, he is not really innovative, etc.  I am kind of neutral to our current Mayor.

His Republican challenger is Paula Hughes.  She won the primary and was my least favorite of the three Republicans in the primary.  I do not have “a great feeling” about her; however, I certainly do like some of her stands on issues.

There is also an independent challenger; however, I do not know anything about them yet.  In fact if this candidate contacts me I would be happy to post some information about them.

I have not decided who I am going to vote for in this race yet.
Who are you going to vote for and WHY?

Mike Sylvester

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