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Last Updated: Government...need we say more
Grandma and Harry Blowing in the Wind Well Congress or more accurately the Democrats in Congress are off and running to show they will deliver on promises and are seeking the low hanging fruit.
On the top of the list is REQUIRING utilities to generate 15% of their energy from renewable sources by 2020. If my math serves me well, that is about eleven years from now.  Does anyone seriously think that if renewable energy were a viable option, a cost effective option, a technically feasible option that utilities in the US would not be anxious to pursue that alternative in their best interests?  I have worked for one of the largest of such utilities for over 47 years and we are looking at all such options, we looked at battery storage twenty years ago, we have tried solar and now are investing in wind, we just plunked down $20 million in a new concept to store wind power.  Wind power, not even a new idea!The problems are many such a reliability, adequate transmission lines, the “not in my back yard syndrome” among them.
So, now I harp on my favorite theme, unintended consequences. The last thing we need is Grandma Pelosi and friends to legislate mandates for energy in a nearsighted attempt to appease certain groups and make the uniformed public feel good. The point is that safe, reliable less polluting sources of energy is what everyone wants including the utilities, but that will happen not because some politico says it will, but because the public demands it and is willing to pay for it, I say again, is willing to pay for it. No doubt you are happy with your current electeric and gas bill.  Nuclear energy remains the least costly of the non-polluting energy sources (that is once the federal government gets off it duff and after twenty years decides what to do with spent fuel). It appears we have not learned our lessons from the auto industry where Congressional mandates resulted in cars people didn’t want to buy. And, by the way, have you tried to find a plug in electric station lately?  The next time you hear what sounds like a great idea from Grandma and Harry think “are there any unintended consequences” or don’t they matter. December 3, 2008
$25 Billion to Burn
Call me crazy or naïve or just plain dumb, but help me with the math.
Time to be a Full Time Grandma Democrats in Congress appear to be traveling at warp speed to “rescue” automakers. And you thought Obama would not be influenced by special (union) interests.
The Mortgage Mess Circa 1999 Fannie Mae Eases Credit To Aid Mortgage Lending
No Smoking (or buying) at the Drug Store
Well the all knowing social do-gooders in
There is one other minor issue, what right does a city have to ban any store from selling something that is perfectly legal? There is probably a porno store right next to the local CVS. Or fast Ratchet up the education, make it unattractive to smoke, keep up the pressure socially, but no matter what, there will be a core group of people who will never get it. You know like, lying out in the sun for hours, or riding a motor cycle without a helmet, or not wearing a seat belt, or eating fries every day or scores of other dumb things people do or don’t do. But give me a break, is there any person walking this planet (or at least in July 30, 2008
Change?
“Whip Inflation Now” War on Poverty” “The Great Society” Now list in order of importance the success of each of the above. Since the Nixon administration there are has been talk about health care reform. For more than twenty years there has been talk about a national energy policy. For more than twenty-years there has been talk about the need to address the Social Security and Medicare “crisis.” Overhauling the state of immigration, no child left behind…what happended?
If you were a stockholder in this company what would you do about the CEO and senior management? Give them a kick in the pants and out the door most likely albeit with a nice severance package I suspect. And yet, and yet, the lack of any strategy, the lack of real problem solving, the lack of any bipartisan action on just about anything goes on and on. We reward inaction, we vote for people who block progress so their party can look better or the other worse. We don’t hold any politician accountable. We vote for people who promise what they can’t or should not deliver, we don’t ask the right questions (perhaps because we don’t want to know the answers). We have come to accept and perhaps expect failure and isn’t that sad and aren’t we really stupid. June 24, 2008
What You Really Owe and Who YOu Owe it To If the US Federal Government were a business, no one would invest, if it were a person it would be headed to bankruptcy court, but it is neither of those so our politicians are free to play with trillions of dollars creating liabilities for decades to come. It’s kind of like promising your ten year old daughter that you will pay the full cost of college for her granddaughter, even Harvard. Quite a promise and perhaps well meaning, but you have no idea what the true cost will be, how you will fund it or even if you will be around to meet the commitment. Hey, you are a politician and didn’t even know it. According the most recent reports, the US National Debt is $9.5 trillion, not counting the accrued unfunded liabilities for Social Security, Medicare and Medicaid. Think of those items as your employer’s pension promise, but no money is put into a fund so your pension security is based on your employer staying in business and meeting that commitment to pay you a pension starting 30 years from now and paid to you for another 20 years after you retire. Sounds like a good deal, right? Exactly who does the federal government owe the debt to? Well, if you buy US Savings Bonds, it owes some of it to you, so no big deal. Eh, not exactly.
The Federal Reserve holds at least $515 billion of the national debt. It’s all rather complicated and I suspect the politicians like it that way, but on the other hand, they don’t understand it all that well either and hence they create more and more debt and liabilities that the next generation will have to pay for, but those promises make us all feel good for the moment. Think Medicare Part D, we sure "solved" the prescription drug problem for seniors. Read this from Wikipedia: A traditional defense of the national debt is that we "owe the debt to ourselves", but that is increasingly not true. The Not only do we buy everything from There are those who say the debt is no big deal and we have worked our way out from under before, like after WWII. That’s true, but the greatest generation is moving on and the Americans of today don’t think the same way. The greatest generation paid cash for most of what they bought too, they remembered the Great Depression, and today the depression is probably not even in history books in our schools. So, here is the deal if you are under 60, be afraid, be very afraid and think to yourself, how are they going to pay off that debt and keep spending like drunken sailors? How is the next president going to accomplish all that he is promising me today? How silly of me, the politicians will simply raise taxes on those billionaire hedge fund managers, all ten of them, and the rest of us can go merrily on our way.
May 20, 2008
Your Government in Action – Incentives Just as Good as Ethanol I am going to assume that you agree it is beneficial to encourage people to use mass transit in lieu of driving to work, less congestion, less pollution, less fuel consumption, you name it, all good stuff. Your Congress believes that too so in 1998 it amended IRS Section 132(f) of the Internal Revenue Code, by Title IX, Section 9010 of the Transportation Equity Act for the 21st Century, Public Law 105-178 In short, it says you can deduct money from your pay on a tax free basis as long as you use that money to pay for commuting expenses like the train and parking. In other words the taxpayers are subsidizing your commute to work and your parking costs once you get there. One problem though, as you can see below the amount you can save taxes on for parking is nearly twice as much as for using mass transit. Do you see anything wrong with that, like the financial incentive is backward and rather than encourage use of mass transit it rewards driving to work. This is like making the Medicare hospital deductible $150 and the outpatient services deductible $850, any guess on where more care would be rendered under that scenario? The story is that while drafting the final language the Congressional staffers (that’s DC jargon) were trying to figure out what dollar amounts to include in the bill and they didn’t know what parking cost so one of them ran out and asked at a local lot, bingo, a new law is born. One of them probably called the Lionel factory to see what a train ride cost. Say, how much is a bushel of corn these days? You can’t make this stuff up! Just in case you really have a yearning to know more: IRS Section 132 allows employees to pre-tax, (eliminate payroll taxes), on qualified commuter expenses which generally include payments for the use of mass transportation (for example, train, subway, bus fares), and for parking (see further details below). For 2008 the maximum monthly pre-tax contribution for mass transit is $115.00, and $220.00 for parking. These limits are indexed for inflation. How IRS Section 132 Works: The preceding is taken from http://www.coredocuments.com/irs_section_132.php May 6, 2008
Big Business Gone Wild
The evidence is in, no big revelation here, that the government is an inefficient way to do anything and is driven by political expedience and little more. On top of that, there is little or no accountability for results, budgets or fulfillment of commitments. Billions have been wasted in Now, we have two presidential candidates proposing to waive the federal tax on gasoline this summer for no other purpose than to pander to the voters, more money wasted and worse we are providing incentives for exactly the wrong behavior. All this and still many people want to turn health care over to the federal government, what are they thinking? Heck I’m scared to death having to go on Medicare.
May 5, 2008
You Paid Twice for that Ear of Corn
The Wall Street Journal © reports today on a new farm subsidy bill, $26 billion over the next five years to be precise. So we have more farm subsidies at a time when farm prices are high and climbing and when farmers are earning more than ever before. According to the WSJ farm incomes were up 44% last year…what’s in your wallet? What’s wrong with this picture, including the fact that foreign countries are filing complaints against the So let’s get this straight, under the legislation a full-time farmer can earn $1 million per farm (double if married) and still keep the subsidy and we aren’t talking about Mom and Pop plowing the back forty, we are talking major farms and big bucks. The Bush administration wants a $200,000 income limit in order to receive the subsidies, but that doesn’t go down well in our Congress. So here we have a clear picture, the economy is in recession, homes are being lost (this morning on TV the BBC showed a tent village where Americans who lost their homes were living – I thought I was looking at Somalia), inflation is creeping up, taxes will be heading north, the federal debt is out of control, Social Security and Medicare are still in deep trouble and getting worse, but Congress can find more of our tax dollars to subsidize (perhaps illegally in the WTO view) farmers earning a million dollars. Never forget this a priori, people over age 65 and farmers are always poor. March 13, 2008 The Liberal Checkbook There are those of us who believe that government is a largely ineffective and always inefficient way to solve problems, especially problems that fall into the realm of personal responsibility and other people related matters. I guess we are called conservative which is not always a bad thing. On the other hand, there are those folks who believe that the only way to solve many problems is with government Many of the proponents of this form of government and society are liberal elite, they are celebrities, they are wealthy, often very wealthy and they have great influence over average people who are sincerely concerned about problems other people face, but not so concerned as to become directly involved beyond criticizing others. So I have a suggestion, why don’t the wealthy liberal elite simply voluntarily help pay for all the causes they espouse. No I am not talking about donating to charity or starting their own foundations or paying for their own worthy causes, that’s all good stuff and if it weren’t for generous wealthy people of all political persuasions life would not be a pleasant as it is for us average folk. I am talking about simply writing a check to the US Treasury, just like we do when we pay our taxes. After all if you believe that filtering more and more money through government is the best way to solve problems why not simply send your donation directly to the government rather than to charities or directly to people for that matter. Hey, if it is too much of a strain on these folks budgets I’m sure most of us won’t mind if they travel on a commercial flight rather than private jet or take a room in a Motel 6 and forgo a private villa on the If you are going to use your wealth and status to promote liberal causes you better really believe in the concept of big government, wealth transfer, and the efficiency of bureaucracy, so here is your chance. Get out the old check book and donate to the U.S. Treasury, I don’t have the exact address, but it is a block just North of the White House on Pennsylvania Avenue.
February 24, 2008
The Great Cover Up The longer a problem exists the more difficult it is to cover it up and inevitably it will pop up again.
So when you hear of all the new programs and great solutions from the candidates, try asking yourself how he or she will pay for more programs of any kind. The long term debt of the In 1935, Social Security became the law of the land and millions of Americans were covered by a retirement income program. However, life expectancy at that time was less than age 65 so not many people would collect benefits for very long. In fact, it was not until 1949 that life expectancy at birth exceeded age 65. It’s easy to give money away when you are giving very little and when your planning takes you no further than the next election. By 2004 not only was life expectancy up to 77.8, but there were far fewer people around who could pay the bill and far fewer still in the years ahead. Funny, you don’t hear about that on the campaign trail. The first monthly retirement check was issued to an individual who had paid a total of $22.54 into the system and received $22,000 in benefits over her lifetime (paid for by her children and grandchildren). Sen. Obama’s solution to the Social Security problem is to take the cap off wages subject to FICA taxes, simply raise taxes and reduce the amount of money people have to spend and save rather than tell people that we can no longer afford a generous set of benefits boosted each year by an unrealistic COLI. Taking the cap off is too little too late. To be more precise, if the cap on taxable wages were lifted less than half (49%) of the programs deficits and only 1/10th of all federal shortfalls would be eliminated. [1] But hey, soaking the “rich” plays well in When Social Security began, the tax on employer and employees was 1% on $3,000 in earnings. There have been 20 increases in the OASDI rate since the inception of the program. Today that tax is 12.4% plus an additional 2.90 % for Medicare. Historically, the majority of additional funds needed for Social Security were obtained by increasing the rate and the earnings subject to taxation. When Social Security was implemented, there were 16 workers for every Social Security recipient; today there are 3.3 workers for every recipient, and it is estimated that by 2030 there will be only two workers for every recipient. [2] Guess what that means, as the Experts tell us that the unfunded liability for Social Security through 2080 is about $74 trillion dollars, that’s even more than Bill Gates and Warren Buffet have combined. Medicare has $34 trillion in unfunded obligations over the next 75 years and yet Congress added $80 billion more a year enacting the prescription drug plan. There is always a logical and supportable reason to give more to the people, that is as long as the people on the receiving end are not paying for it, but rather the obligation rests with the next several generations. Social Security was never envisioned as a welfare program or wealth transfer for that matter. It was intended as a way for people to fund their retirement (yikes like a 401 (k) plan or IRA) and yet today that is exactly what it is, little more than welfare. And more than 70 years after enactment Social Security comprises more than half the income for more than 60% of the program’s beneficiaries; furthermore, for 30% of its beneficiaries, Social Security represents more than 90% of their total income. [3] What happended? Well over the years politicians “improved” Social Security many times adding survivor benefits, disability benefits, a permanent COLI, children’s benefits and even benefits for the ex-wives of a beneficiary. What also happended is that rather than viewing Social Security as supplemental income in retirement Americans became more and more dependent and why not, it was free money from the government after all. Fast forward, the Bush tax cuts reduced federal receipts and lowered the budget surplus by nearly $ 2 trillion. One has to wonder what happended to all that money, the answer is it went back into the economy which may be why Congress is now giving us back another $150 billion or so, again to stimulate the economy. But where will that $150 billion go? Well, if you accept the fact it will be spent by “working Americans,” chances are it will be spent at Wal-Mart, so we know exactly where the $150 billion will go… to China! So tell me again how this all works, spend, spend, spend and tax to pay for that spending but don’t tax sufficiently to actually pay for the spending. Then cut taxes to keep the economy rolling and when it doesn’t, give back more tax revenue you don’t have to stimulate the economy once again. And yet again, raise taxes to help pay for the old and new spending, that is, until the economy needs more stimulation. The various candidates are making promises for an array of new programs, from health care to early child education to who knows what and they have schemes to pay for it all, like Sen. Clinton paying for one program by eliminating federal contractors. Well, if we can eliminate contractors what the heck are they doing now and why didn’t Congress eliminate them before this? There is a growing deficit, right? But wait a minute, we can be creative in paying for lots of new goodies, but how are we going to pay for what we already have and can’t afford? Forget expanding health care, how about dealing with the fact that by 2030 nearly 60% of a Social Security check will be consumed paying for Medicare Part B and D premiums and co-payments? But there is another way, just encourage people to spend what they don’t have, accumulate debt, take a home equity loan…wait, that doesn’t work either. [1] Social Security Office of the Chief Actuary [2] The CPA Journal Online [3] The CPA Journal Online
Money, Money, Money CNN is reporting a deal on rebates to Americans, let’s take a look.
Here’s what they say, “Sources on Capitol Hill and at the Treasury Department said congressional and White House negotiators agreed upon checks of $600 per individual and $1,200 per couple who paid income tax and who filed jointly. People who did not pay federal income taxes but who had earned income of more than $3,000 would get checks of $300 per individual or $600 per couple. A Democratic aide and Republican aide said there will be an additional amount per child, which could be in the neighborhood of $300. Those who earn up to $75,000 individually or up to $150,000 as a couple will be eligible for the payments, said Republican and Democratic sources familiar with the tentative deal. Checks could be in taxpayers' mailboxes by June, according to an Associated Press report.” Hold it, if you don’t pay taxes you still get a “rebate, “what is being rebated exactly? I thought that if you didn’t pay taxes, you were subject to the AMT, is this the AMR (Alternative Minimum Rebate)? Just kidding, everyone needs a little extra cash now and then. But now we have a new definition of wealthy, $150,000 for a couple, sorry no AMR for you. But if you earn $149,000 and have four kids, you may get $600 plus another $1200 for the little ones. Now, those of you with five kids who earn $151,000 are just out of luck, apparently the kids don’t count in your case. Sorry about that. Here’s the plan, once you know the deal is done, spend, spend, spend, charge charge, charge. You know you’re good for it; the government says the check is in the mail. The last time they did this they spent an additional $115 million just to tell us the check was in the mail. The interest on your credit card between now and June, you won’t even notice it, didn’t you know interest rates are dropping? Keep in mind the feds are rushing the payment through. Apparently it will take about only about six months. Remember that when you seek a second medical opinion under our new health plan brought to you by our friends in
Com'n, you make $200K, I know you can afford to take Warren Buffet to lunch In a recent Money © magazine article, Rep. Charlie Rangel (The Champion of AMT Relief) provides insight into the mind of a liberal. Mr. Rangel notes that the AMT will bring in $ 1 trillion over the next ten years and that is the last he talks about revenue and expense. His scheme to eliminate the AMT is to raise taxes on 1.6 million people. Couples making more than $500,000 will pay a 4.6% surtax and those between $200,000 and $500,000 a mere 4% as if there were no difference between $200,000 and $500,000. That is not the most disturbing comment though. Consider, “The surtax is modest relative to the dramatic pay some of these people get.” Some of these people which “some” are we talking about? Does a couple earning $200,000 feel like Warren Buffett or a hedge fund manager? Is $250,000 dramatic pay or perhaps the result of 60-hour weeks, or years building up a business or a medical practice? Noting that the upper middle class is caught by the AMT, he rather glibly makes another comment to Money. You can put out a special edition for billionaire readers that says, “Sorry, you didn’t make the cut!” Ok, I know the average household income in the Billionaire, $200,000, $500,000, all in the same pot? Therefore, the message is clear, work hard for 30 or 40 years, go to college, become a professional, take risk, achieve the American dream and fall prey to politicians who simply cannot conceive of any solution to a money problem that does not raise taxes on someone. By the way, you and Buffett and Gates and Trump, and Soros apparently do have something in common The AMT was effective in 1970 and was target at 155 high-income households that had so many deductions they did not pay any income tax. Therefore, the mental midgets in Congress changed the tax law to take care of those folks, did not add an inflation escalation to the tax and merrily went on their way spending all the extra money. Da ya think there was a problem in this logic from the start? And so it is with many in January 20, 2008
I sent could you spare $300 or so, just till I get on my feet? (By the way what did you do with all that money?)
And We are Off and Running
The answer from politicians, especially those running for office, is throw more money around, freeze mortgage rates, stop foreclosures (no matter someone else is going to pay for it and no matter the federal government has a huge and growing deficient, that Social Security and Medicare will devastate the economy in the years ahead or that people are already overwhelmed with taxes of one form or the other). No matter the states that were free spending when revenues were flowing are now scrambling to reduce deficits brought about by shortsighted politicians seeking to please this group or that with no regard for long term fixed costs or fluctuating revenue streams. Damn the future, full speed ahead toward Election Day. Heaven forbid that part of the answer to our problems should be far more prudent spending, stopping members of Congress from adding pet projects to legislation or proposing ill conceived new spending initiatives. What’s another $600,000 more or less? All this “help the little guy” rhetoric plays well in town hall meetings because the little guy is even less capable of looking at the long term or the big picture and reprehensible politicians of both parties help foster this economic myopia. Then of course this is Deal or no Deal © where virtually everyone is a loser because they are greedy and have no idea that the inverse of a 20% chance there is a million dollars in the case is there is an 80% chance it is not. That show is so anxious to give away a million dollars pretty soon there will be 25 cases with a $1 million and one without, anyone for a reality check? Consider some really depressing information, that while not important to you will surely be for your children and grandchildren. The full story can be found at http://www.usatoday.com/news/washington/2006-08-02-deficit-usat_x.htm But here is a summary to keep you going. The federal government keeps two sets of books. The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005. The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion. Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel. Congress and the president are able to report a lower deficit mostly because they don't count the growing burden of future pensions and medical care for federal retirees and military personnel. These obligations are so large and are growing so fast that budget surpluses of the late 1990s actually were deficits when the costs are included. The But you see, because nothing happens quickly, politicians move on and no individual is accountable, nothing happens except more fudging the numbers, more spending and more promise to naive people who simply don’t get it beyond the fence around their little piece of America. Who is minding the store? Deal or No Deal!
January 15, 2008
When the Light Goes On Martha, what are you doing? Turning on the light what does it look like I am doing? But Martha, you forgot to pull down the shades. Oh my, I did forget, turn off the light, turn off the light! Martha, don’t you know what they do to people who use banned light bulbs…it’s lights out. But Herman we have a dozen of those incandescent 100 watt bulbs left, what am I supposed to do just throw them away and use one of those twisty things? You know the rules, it not our choice what light bulb to use, the government says what kind of bulb we must use. Don’t you remember that law went into effect way back on 2012? Oh yes, now I remember. When does the law banning fireplaces go into effect? Note: Beginning 2012 the 100 watt incandescent bulb will be phased out and you will only be able to buy energy efficient bulbs and in 2014 the same rule applies to lower watt bulbs as well. It is a good thing, perhaps but it doesn’t matter, the federal government made a law and you will comply...and somebody will make a great deal of money replacing all your light bulbs. January 8, 2008 |
I’m no fan of smoking and have never tried it myself, but have these people ever heard of Prohibition or perhaps illegal drugs?
Let’s test your memory.
If you earn over $230,000 those excess earnings cannot be counted in determining your pension or for your 401(k) plan. 
action be it in the areas of education, housing, health care, training, mortgages, savings, trade or just about anything else.
As the February 1, 2008 Wall Street Journal © so ably points out the next president will be faced with the huge and growing national debt, with most of that debt made up of so called entitlements programs (nearly one trillion dollars is the annual budget just for Medicare, Medicaid, and the like with another $600 billion for Social Security.).
you 7.65% for Social Security and Medicare, I paid my 22% income tax, I paid my 6% state income tax, I paid my 8% sales tax, I paid the excise tax on my phone bill, I paid the tax on my wine, I paid the occupancy tax on my hotel bill, I paid the tax on my gasoline, I paid my tolls, I paid, I paid, I paid ...
The economy is down the tubes (never mind 95% of American have a job); the credit crunch is hurting the little guy (no matter that many people who can’t pay their mortgage got into the fix through their own foolishness or carelessness).
| All material copyrighted by Richard D. Quinn LLC |