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:
- The money goes to people who will turn around and spend it. This stimulates the economy.
The cons of this extension include:
- It will cost 60 billion dollars.
- 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
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
Does Ron Paul have a chance?
As the readers of this blog know I have liked Ron Paul for a long time. I am a cross between a Republican and a Libertarian. I likely agree with 85% - 90% of the views of Ron Paul. I likely agree with Ron Paul more than I agree with any of the other Republican candidates.
Michele Bachmann won the Ames straw poll with 28% of the vote. Ron Paul came in second with 27% of the vote. The media is trumpeting the fact that Michele Bachmann won the straw poll and completely ignoring the fact that Ron Paul came in a very close second place.
The liberal mainstream media detests Ron Paul. The Republican media (Fox News, etc) strongly dislikes, if not detests Ron Paul.
Ron Paul supporters are angry that the media is ignoring their candidates impressive showing. They are completely justified in their anger.
That being said I do not think Ron Paul has a realistic chance of winning the nomination. The main stream media is convinced that Romney is the likely winner; Perry has a decent chance, Bachmann has an outside chance. I tend to agree with this; however, I do think Ron Paul and Herman Cain have a very small chance of victory. I feel their chances are very, very, small.
Mike Sylvester
Cheating scandal rocks US navy submarine fleet
Please read this post about cheating on a navy nuclear powered submarine from the Huffington Post.
I spent six years in the nuclear navy. I spent the last four of those years stationed on the USS Pintado, SSN 672, in Pearl Harbor, Hawaii. I was an electronics technician (Reactor Operator) in the nuclear power plant. I managed to qualify Engineering Watch Supervisor as a second class petty officer.
I have to admit that this story saddens me and surprises me. The USN administers a large number of written exams to its personnel who operate its nuclear power plants. In my experience these tests are rigorous and require a high level of knowledge.
I served on the USS Pintado from 1991 - 1995. I never witnessed nor heard of cheating on these exams. I imagine there were a few people who might have resorted to cheating; however, it certainly was not rampant nor was it encouraged. I am 100% convinced anyone caught cheating when I served would have been dealt with harshly, and rightly so.
This is a sad event and it sounds like it may be a problem on many other submarines.
Mike Sylvester
Fort Wayne beggars
I have lived in the same house on the north side of Fort Wayne for the last 11 years. In the first 10 and a half of those years I have never seen a person begging for money in this part of town.
In the last six months I have seen several beggars in my part of town.
In March there was an adult man, an adult woman, one or more children, and at least one large dog that spent a lot of time begging near the entrance of the Dupont Library. All were well dressed, clean cut, and looked physically able to work. They were a few hundred feet from my commercial office. They had cardboard signs and spent time on both the north and south side of Dupont Road near the Dupont Library. According to their signs they had been travelling across country and their car broke down and they supposedly needed money to fix their car and get home. Over a two week period I saw them five different times.
In April there was an adult man playing a guitar and asking for money outside of the Subway in the strip Mall just East of the Dupont Library. I just saw him once. He may not really have been a beggar; I am not sure. He did have a container out with a cardboard sign asking for money.
In May I was leaving the WalMart on Coldwater road and there was a man who looked to be about 30, clean cut, well dressed, in good shape, holding a sign and begging for money, his sign said he could not find work and needed money.
Friday my son and I were north bound on Coldwater and waiting on the light at Dupont Road at about 5:30 PM. There was a man who looked to be between 25 and 45, well dressed, clean cut and in good shape. He was standing in the median of the road in traffic. He had a sign that said he could not find work and needed money to feed his family. The left turn signal came on and 12 cars proceeded to turn left onto Dupont Road. At that time he was maybe 30 feet from my car. TWO people slowed down and gave him money. I could not see how much; however, each gave him at least one green bill. So in the three minutes I saw him he received at LEAST $2. Not bad for three minutes of begging.
All of these beggars were white. All were dressed as a normal middle classed person. All appeared to be physically fit and capable of working.
I cannot imagine a plausible situation that would cause me to become a beggar. I come from a very middle class background and I made VERY little money my first four years as an adult. I then spent six years as an enlisted man in the USN where I did not make a lot of money. So in the first ten years of my adult life I may little money. That being said I have always saved money and as an adult I have ALWAYS been able to access at least $2,000 of my own money that I saved when working (Mainly babysitting) in High School. I have never had to borrow money from anyone except my parents when I was a kid. That being said; I have a family and friends and there is no doubt that if I had to I could have borrowed $2,000 or more if times were tough for me throughout my entire life.
I have several comments about these beggars:
- Why don’t they work rather than beg? Times are tough and I am sure they might have a hard time getting a high paying job. That being said I have numerous clients in the Fort Wayne area who have told me that even with the unemployment rate being so high they just cannot find people who are willing to work.
- Why don’t these people ever save money? I have ALWAYS had some money saved. I have ALWAYS prepared for bad times. People need to stop living paycheck to paycheck and start saving money. Multiple big screen TV’s are not a necessity. Cable TV is not a necessity. A cell phone is not a necessity.
- Is the economy worse than we think? The economy has been tough; in fact we were technically in a recession from December of 2007 - June of 2008. Since that time we have had no real job growth and the economy has struggled.
- Why don’t these people have friends and family who can help them? I personally have a very small family and my family is middle classed or poor. My wife has a small family as well and her family is middle classed. My wife and I both have friends. I cannot imagine a situation where I would have to get a loan from my friends or family. I really can’t. That being said if I needed money I could borrow it from my friends and family…
- What does this say for our future? Our Government is spending a record amount of money to help out the poor and middle class. Our Government is bankrupt and MUST start paying less into these programs in the near future. High paying jobs are very hard to find, that being said low paying jobs are available for people who are willing to work rather than complain. Once again I have SEVERAL clients who are looking for good workers in the Fort Wayne area. There are now millions of Americans who expect NOT to work and that the government will support them and their children…
The more I analyze things the more that I realize how screwed our Country is… I am NOT going to give my kids a better Country than was given to me…
Mike Sylvester
Tax Reform, Part 1
I am a CPA and I am a partner in SBS CPA Group. We prepare a couple hundred corporate income tax returns per year and another six hundred personal income tax returns per year.
I am sick and tired of conservatives and Republicans who ignorantly claim that we cannot ever raise taxes or increase revenues. They do NOT understand the tax code and should NOT be so ignorant of it.
The Federal Government has a serious spending problem. It has not had an honestly balanced budget since 1957. We have ran a deficit for the last 54 years. We need to cut Federal spending and we need a balanced budget amendment. I think we need to cap Federal spending at about 18% of GDP. Note Federal spending is currently 25% of GDP.
That being said we also have a revenue problem. The United States tax code is too complicated. The tax code is extremely unfair. I 100% support scrapping the income tax code and using a National Sales Tax instead. Our politicians will NOT allow the income tax code to be scrapped.
This series of posts will show you how unfair our current income tax code is. It will show you reasonable changes that could be made to it. For some reason the Republican Party opposes common sense changes like I will list here. The Republican Party has been taken over by Grover Norquist. Mr. Norquist is the head of Americans For Tax Reform. Mr Norquist got the vast majority of Republicans to sign a pledge to never raise taxes. Mr. Norquist interprets this pledge to mean that if a tax credit or deduction is removed from the system, no matter how absurd it is, that you have raised taxes and violated the pledge. Basically Mr. Norquist is saying that those deductions and credits currently enshrined in the tax code must stay unless they are offset by equal tax decreases.
Mr. Norquist is an idiot.
Mike Sylvester
Most discouraging thing about last night’s Republican Presidential debate
The candidates were asked to raise their hand if they would walk away from a deal that had $10 in real spending cuts for every $1 of increased revenues (tax increases). All eight of the candidates raised their hands.
This is VERY discouraging to me.
I agree that spending is completely out of control and needs to be cut drastically. That being said the Democrats control the Senate and we have a Democratic President.
We need to balance the Federal budget in the next 5-7 years and I am willing to agree to small tax increases as long as they serve to make the tax code simpler, make more Americans pay income taxes (in other words I want to tax the working poor), and close tax loopholes of all kinds. I would agree to a combination of spending cuts and tax cuts as long as there were at least $3 of real spending cuts for each $1 of tax increases.
Only an idiot would walk away from a deal that had $10 of real spending cuts for $1 of tax increases.
The Republican Party has been taken over by politicians who think even a small tax increase is wrong in all situations. This is really discouraging and does not bode well for the long term fiscal outlook of this country.
Mike
Republican Presidential debate in Iowa tonight
I watched the debate tonight and it was quite interesting.
Prior to the debate I liked Ron Paul and Herman Cain; I was neutral to Bachman; I did not care much for Romney, Pawlenty, or Huntsman; and I really did not care for Santorum or Gingrich.
The clear winner of the debate was former Speaker of the House Newt Gingrich. He won by a large margin.
My favorite two candidates before the debate are still my favorite candidates. I thought Ron Paul had a mediocre debate performance and I thought Mr. Cain fared pretty well; especially as the debate progressed.
I am still unsure about Bachman. She portrayed herself as a fighter and likely appealed to many members of the Tea Party.
I thought Romney did fairly well. I thought Pawlenty lost the debate and I think his Presidential ambitions are over unless he does well in the Saturday Straw poll. I was pretty impressed with Huntsman. I like the fact that he does not hide from his record and does not try to conform with the rest of the Republicans.
Santorum is a candidate I really do not care for. This debate did not change that. I also do not care for Gingrich; however, he won the debate and really was impressive.
Rick Perry will join the race on Saturday. That will bring the field to nine. I hope that Santorum and Pawlenty both drop out of the race in the next week or two. Neither has ANY chance of winning and they should get out of the way of the stronger candidates.
Here is a ranking of the nine potential candidates and I have listed them in the order I like them. Note that it is early and I expect this list to change often as I learn more about them. I really need to learn more about Perry.
- Ron Paul
- Herman Cain
- Perry
- Huntsman (Which kind of scares me)
- Bachman
- Romney
- Gingrich
- Pawlenty
- Santorum
Michigan Food Stamp Program Abuse
I am sick and tired of listening to liberals who continually cry and lie and say that we cannot cut government spending. Give me a break…
We could cut Government spending by 10% or more just by eliminating waste, fraud, and abuse. We could cut another 10% by eliminating programs that should not exist, combining programs, etc.
The Federal food stamp program is chock full of abuse. The Food Stamp program will cost about 85 billion this year. Currently about 46 million Americans are on food stamps; mostly children in homes with a single parent. To qualify you must have annual income that is 130% of the Federal poverty income or less. For a family of four that is $29,055. In fact one in every seven Americans is a beneficiary of the food stamp program. The average recipient receives about $1,600 in annual benefits. The remaining eleven billion is used in administrative costs and is split between the Federal government and the States.
The United States is in BIG trouble, Part 2
Gross Domestic Product reflects the overall size of the economy, public sector and private sector. Gross National debt measures the total amount of debt the government currently owes on a cash basis. In other words, this is money that has already been borrowed and spent.
Economists have been arguing about how much debt is acceptable for as long as there have been economists. Recently there was a detailed study that claimed that gross national debt is not a hindrance to economic growth until it gets above about 90% of GDP. These studies show that when a country gets a gross national debt above 90% it loses about 1% from its annual economic growth. That is because the country is spending a lot of money to pay interest on past spending and this money cannot be used to pay for current government spending; it is being used to pay for past sins. Losing 1% per year from annual growth is of critical importance.
