Whoa This Economy stinks

[jacksonbart]

calling it past military seems biased.

[merkin]

Past military” represents veterans’ benefits plus 80% of the interest on the debt. Pie chart from the War Resisters League

http://www.warresisters.org/pages/piechart.htm

Current Military
$965 billion:
• Military Personnel $129 billion
• Operation & Maint. $241 billion
• Procurement $143 billion
• Research & Dev. $79 billion
• Construction $15 billion
• Family Housing $3 billion
• DoD misc. $4 billion
• Retired Pay $70 billion
• DoE nuclear weapons $17 billion
• NASA (50%) $9 billion
• International Security $9 billion
• Homeland Secur. (military) $35 billion
• State Dept. (partial) $6 billion
• other military (non-DoD) $5 billion
• “Global War on Terror” $200 billion [We added $162 billion to the last item to supplement the Budget’s grossly underestimated $38 billion in “allowances” to be spent in 2009 for the “War on Terror,” which includes the wars in Iraq and Afghanistan]

Consider how they manipulate the numbers

There couldn't be any bias there, oh no. (Sarcasm alert)

[Jeff Matthews]

I agree and will add one thing. While many think self-employment is more risky, just the opposite is true. If you are self-employed and have 20 clients, when one fires/stops using you, your income does not go to $0.00. Self-employment allows much greater diversification. Unfortunately, it is work getting started. You really have to hustle for business. It doesn't just come to you because you have a great idea, you're smart, and you just bought a fax machine.

Jeff,

I agree but this is easy to say as you are in a very low overhead profession. All of your "infrastructure cost" was spent years ago getting your doctorate degree and passing the bar. It is difficult in other businesses where startup cost is much higher and money is very tight.

My former employer went from 200+ employees to about 20 right now and I was out a little over one year ago and managed to keep them as a client. I have had some job offers but I just don't want to have to rely on anyone, so I do agree with your point. But, what do you do when you have spent years doing hundred million dollar real estate transactions? A little hard to find clients right now as our fair city is ground zero of the real estate meltdown. I am expaning to bankruptcy and loan workouts. Not much else to do.

Well, there you go, Chris. BTW, I did not know you were part of a lay-off. Anyway, you answered your own question. Frankly, by being a solo, or self-employed, I don't see why you would want to orchestrate $100MM real estate transactions, anyway. Sure, there's lots of work involved, but the liability is stupendous, and stress is the name of the game. You can make a pretty darn good living helping real people. That pie in the sky stuff is just a bunch of numbers disconnected too far from real people.

Do small deals for people with simple earnest money contracts, including reviewing title commitments, etc. and insuring a smooth closing. A few grand in fees here, a few there.... Throw in some debt work-outs and maybe a few collections and defenses against collections. Always offer business clients your services in preparing wills and powers of attorney. A few more buicks here, a few more there... Go to their place of business when you need to meet them; you'll meet and get to know their employees as well. They'll need you from time to time, as well. It all adds up to a decent living, for sure.

No need for a pretty secretary/receptionist to make your office look good and lick your envelopes and screen your calls. Keep it real basic. Your knowledge and diligence is what sells, and not "presentation."

[merkin]

mdeneen wrote the following post at Thu, Jan 22 2009 12:36 PM:

A previous poster hinted that government spending was growing rapidly in Social Security and MediCare - as though that was some enormous measure of the total. We spend more on military than the next 10 countries combined. So, no analysis of spending can begin without bringing that to the front. You can't make it a small slice no matter how you choose to juggle the numbers.

I was the previous poster, and spending is growing rapidly in Social Security, Medicare and other government programs. They are a big share of the government spending. It can't help but not grow rapidly as the baby boomers age and retire. I can not see the conection on what other countries spend on military compared to us has to do with whether or not we are increasing our spending on entittlement programs.

Here is another pie chart with different percentages. Heck it's from wikipedia so I don't believe that it's numbers are that accurate anyway. But they didn't say that they juggled the numbers.

[Hifi jim]

I'm just suggesting that defense related spending is growing faster than entitlements. By referencing the idea that it is already larger than the next 10 countries combined, I am also suggesting it is completely and entirely "out of control" and strategically ludicrous in size. i.e. more problematic than Social Security or Medicare, which actually provide some human benefit. The defense budget has approximately doubled in 8 years, and that doesn't include what has been kept off the books.

Agreed. We could have implemented a universal health care system...

[merkin]

mdeneen wrote the following post at Thu, Jan 22 2009 6:43 PM:

I'm just suggesting that defense related spending is growing faster than entitlements. By referencing the idea that it is already larger than the next 10 countries combined, I am also suggesting it is completely and entirely "out of control" and strategically ludicrous in size. i.e. more problematic than Social Security or Medicare, which actually provide some human benefit

Well I guess that that is your POV. I feel that that defense spending is not ludicrous and does provide some human benifit. At least to this human by keeping him safe and free. I could say that it may need to be more than twice the next ten countries I don't know. I just want it to be large enough to protect me and my family. But as you can see by other sources that the defense spending is not the only thing, or not even the largest expenditure in the federal budget. These latest bail outs have cost us more than any war. The proposed package now in congress is more than any war. By the act of deficit spending these packages may comprimise our security and way of life more than any military action.

[merkin]

mdeneen wrote the following post at Thu, Jan 22 2009 11:10 PM:

You can be free, or you can be secure. You can't be both. I know that may not seem obvious at first, but to be ultimately secure, you have to give up being ultimately free. This is what is meant when it is said that it takes great courage to live in freedom. In this world today, there are precious few people who have the courage to live free. Here is the U.S., we lost that courage. We've allowed ourselves to be infantilized through the clever manipulation of fear. I would say that 9-11 ought to have been a useful lesson about the futility of excessive defense spending to buy security. From WWII to 2001 we spent about $3 Trillion dollars on national defense. Those defenses were rendered utterly impotent against 20 young guys and $20 dollars worth of box cutters. Not many people understand that lesson in false security.

I can only be free if I am secure as secure can be. Secure from the control and manipulation of government. Isn't that what our fore fathers fought for? Didn't they fight ( not just live with courage) against England. They fought with militias, they didn't just decide to give all there weath to a socialist program and say they are living free. Yes, no matter how much you spend on security there is always a risk that it may be breached, that doesn't mean that what you spent was futile. It stopped numbers of threats. If a bank robber holds up a bank with a 20 dollar pistol was the bank wrong for buying a vault to store the money. Just because security is breached does not mean that all security is false. All security is not total or absolute there is always a risk, that is why the price is so high. Isn't that what Live free or Die means. Paying for your freedom with life by defending and protecting freedom is what our military does.

"I'd happily slash the defense budget by 60%, eliminate the NSA completely, repeal the Patriot Act, end the GWOT, and restore the Bill of Rights 100%. Yes, there would be more risk to life. But, it would be offset by real freedom and democracy once again. As the motto IN New Hampshire goes, "Live free or die. Death is not the worst of evils." As you say, it's just a POV. "

So death is not the worst of evils, but having your tax dollars spent on our defense department is? I feel death is pretty bad, I don't know if I would call it evil it is natural. I don't mind paying for our defense so that more of the people that are trying to do us harm die, I don't think that that is evil.

[merkin]

Back to the original topic on this thread, the economy

This year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that can be explained using the Q and A format:

"Q. What is an Economic Stimulus Payment? "
A. It is money that the federal government will send to taxpayers.

"Q. Where will the government get this money? "
A. From taxpayers.

"Q. So the government is giving me back my own money? "
A. Only a smidgen.

"Q. What is the purpose of this payment? "
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

"Q. But isn't that stimulating the economy of China? "
A. Shut up.

Below is some helpful advice on how to best help the US economy by spending your stimulus check wisely:

If you spend that money at Wal-Mart, all the money will go to China.

If you spend it on gasoline, it will go to the Arabs.

If you purchase a computer, it will go to India.

If you purchase fruit and vegetables, it will go to Mexico, Honduras, and Guatemala (unless you buy organic).

If you buy a car, it will go to Japan.

If you purchase useless crap, it will go to Taiwan.

And none of it will help the American economy.

We need to keep that money here in America. You can keep the money in America by spending it at yard sales, going to a baseball game, or spend it on prostitutes, beer (domestic ONLY), or tattoos, since those are the only businesses still in the US.

[Cal Blacksmith]

Lost in the debat on millitary spending is that it is one of the few things spelled out that the federal government is SUPPOSED TO DO, PROVIDE FOR THE COMMON DEFENSE. Not welfare, not medical insurance, not SS, none of those things are in our government charter. The GWOT is in our defense as we have an enemy that has been attacking us for over 20 years, they have no intention of stopping and the more of us that they can kill, the more they like it. It is a just cause to go after them and those who support them. Money well spent.

The two giant bailouts OTOH, are huge wastes of money that only pay for pork and pet projects of the libs. Some of it is for new construction, this process will take years before the "jobs" will be created from this spending. Before the jobs can be worked, there must be plans drawn up, bids on supplys made, government hoops to jump through, endangered species battles to be waged for years in the courts and in 5 to 10 years construction MIGHT start but then all the prices will have gone up and the project will be 3 X what the starting bid was. How is this going to help the economy now?

An elemination of the Cgains tax would spurr the economy as would a direct reduction in the taxes they take from you in the first place. Not only do yo get more money in your paycheck, you get ALL of the money, not a small % of what was taken in the first place, this is the least expensive to enact and the most effective in it's results. You have more money to spend and it costs the government NOTHING to process but this then takes the power away from those in the houses of congress who want to dictate how you live your lives. I wish our new president well but he is making some real bonehead mistakes but then again he is possibly the most liberal president we have ever had and he has a lock hold on power with no opposing ideas even being permited to speak in congress. The first thing this new congress did when it started a few weeks ago was to change the rules of how the body operates and no ammendments that are opposed to their cause will be allowed to be added to any bill. The last congress was under Republican rule, true but the Dems came crying that since it was nearly a 50/50 split, they should be in charge of comitties equally. The Rep caved and said OK, thus we got nothing done and a lack of fiscal resolve was the result. Yep the spending went up on our watch.......... but we had help!

[dkp]

From Heritage.org:

Discretionary spending, the portion of the budget subject to annual review or budget debate, has risen 152 percent since 1965. Mandatory spending, consisting mostly of Social Security, Medicare, and Medicaid, which run on autopilot, has risen 759 percent since 1965.

Source: Outlays from FY 2009 Historical Tables, Budget of the United States Government, Table 8.1.

Total nominal spending has increased 97.6 percent since 1992, while the Consumer Price Index has increased a relatively modest 47 percent, which means that government spending is growing much faster than inflation. Less than half of the increase in federal spending came from defense and homeland security spending.

Source: Outlays from FY 2009 Historical Tables, Budget of the United States Government, Table 8.1; CPI-U from Economic Report of the President, 2007, Table B-60.

At 4 percent of GDP, defense spending is 1.5 percentage points of GDP below the 45-year historical average and well below Cold War and Vietnam War levels.

Source: Outlays from FY 2009 Historical Tables, Budget of the United States Government, Table 8.4.

[Tom Adams]

I post this link only because it was the first place I could find the excerpt of the email Rep. John Boehner sent out.

http://boortz.com/nealz_nuze/2009/01/more-on-the-democrat-stimulus.html

Additionally, the Congressional Budget Office (bi-partisan) has issued their report of this "simulus" plan and their % numbers of the amount to be spent per program per year have not been refuted by the present administration that is lobbying the American public to show support for the "stimulus". On the contrary, the present adminstration has done the "kicking the dirt and saying yeah......well.....you know....well....we're at least doing something" routine. Look at the numbers from the CBO and you'll see that only about 25% of that $800B will be spent in 2009. And of that, only a fraction will be for "infrastructure". In fact, the CBO says that under the current plan, there will still be some $8B dollars not spent as far out as the year 2015!! Please God tell me how this jumps starts the economy?

As for the "Live free or Die" concept. You know.....in some ways I agree and get the point. There's just one small detail. Just as there was once a time in this country when you NEVER locked your doors 'cause there just wasn't anyone who wanted your stuff, so it was after we kicked the British out. As time has gone on, this country has shown itself to be the "richest" country in the world. So now it's like having your million dollar home smack in the middle of a poverty zone. Keep your doors unlocked? I don't think so. My point here is that sure, we can cut our military, close our overseas bases, bring all troops home, and have a simple National Guard........and be a sitting duck for some country who decides they "want" America. And if you don't think that's possible - you're nieve. There's plenty of countries out there that want this land and would love to be known as the one who toppled the giant.

However, there's no denying that all of our military might didn't stop 20 folks from hijacking some planes or an inflatable boat hitting a destroyer or a truck full of explosives driving into an embassy. Sadly, the messages have been sent over the last 20+ years, but we really didn't listen. But on 9/11 it wasn't just our government that got the message, but the American people. And from that, our government realized that a change in tactics was in order. So all those "things" you cited Mark.....name me one that was purchased soley to combat terroristic threats. Not one. We, however, did start spending our military money on "things" that would thwart another terrorist attack. There's more than ample evidence both from here at home and abroad that documents that our recent methods of ensuring security has prevented additional attacks.

And you know what.....call this what you will, but America - being the most powerful & wealthiest nation in the world - I feel has the moral responsibility to make sure that people, in countries across this globe, are not oppressed by governments and regimes that would indescriminently kill people or threaten the stability of this planet. Personally, I believe America was given this "gift" by God and I feel the last thing history should say was that America squandered its opportunity to prevent global nuclear distruction because we "didn't wanna get involved" or we decided to just concentrate on ourselves. Like it or not, for whatever reason, we - this country - has been given the role of "peace keeper" and that comes with a price that we have, we do, and we should bear for as long as we collectively breath. If not us? Who will? And if my tax dollars are spent on a military that kicks somebody's a** because they tried or did kill off 1000's of innocent folks - so be it.

Lastly - I personally like the "stimulus" plan that a Rep. from Texas has floated around. And it's real simple - cease all federal taxes for 6 months. That total loss of federal revenue will equal the $800B the Feds wanna spend. Just one problem.....WE THE PEOPLE decide where to spend the money which relates to the market deciding who the winners & losers are instead of the government deciding who the winners & losers are.

Tom

[Hifi jim]

The two giant bailouts OTOH, are huge wastes of money that only pay for pork and pet projects of the libs.

Ouch! Don't tell that to anybody who works for the Big 3, or any of its numerous subcontractors. And around these parts, definitely don't tell that to anybody in finance. How these companies came to this point is another area for debate, but to let millions of American jobs be lost for refusing to bail them out seems an awfully bad idea. What if we never bailed out Chrysler in '79? People have been hired and retired in that time span from Chrysler. That's an entire career that never would have been, for LOTS of people. I'm not saying to write a check and wish them the best, of course oversites are in order but to let them flounder seems un-American to me.

Some of it is for new construction, this process will take years before the "jobs" will be created from this spending. Before the jobs can be worked, there must be plans drawn up, bids on supplys made, government hoops to jump through, endangered species battles to be waged for years in the courts and in 5 to 10 years construction MIGHT start but then all the prices will have gone up and the project will be 3 X what the starting bid was. How is this going to help the economy now?

Many construction projects have already been planned and the required environmental impact studies and other red tape have been finished, many have even been bid. Many projects are only awaiting government funding, and once that comes jobs would be created nearly overnight. Many other projects are as you say, but would provide jobs further down the road and when do we ever not need that?

[dkp]

Income Tax Receipts Stay Constant Even as Tax Rates Declined

The most dramatic decline in the top individual income tax rate — from 69 percent to 28 percent — occurred during the Reagan Administration, yet tax receipts remained relatively constant.

Top Federal Individual Income Tax Rates and Receipts, 1960–2008

Source: Rates from Joint Committee on Taxation publication #JCX-6-01; Receipts from FY 2009 Historical Tables, Budget of the United States Government, Table 2.3.

[dkp]

Corporate Income Tax Receipts Stay Constant Even as Tax Rates Declined

The top corporate tax rate was reduced sharply under President Reagan — from 46 percent to 34 percent. Yet today, with a combined federal and state tax rate of 35 percent, America has one of the highest corporate tax rates in the developed world.

Source: Rates from U.S. Advisory Commission on Intergovernmental Relations, Tax Foundation, Facts and Figures on Government Finance, 1988-89 Edition (Washington, DC, 1988); Commerce Clearing House, 1993 U.S. Master Tax Guide (Chicago, 1993); and SOI Corporation Tax Returns, various years; Receipts from FY 2009 Historical Tables, Budget of the United States Government, Table 2.3.

[dkp]

Tax Rates for High-Income Households Have Risen Disproportionately

The share of taxes paid by the top 20 percent of income earners increased by almost 7 percent between 1983 and 2005, while the share paid by the bottom 20 percent of income earners decreased by almost 53 percent. Source: Rates from CBO's Historical Effective Federal Tax Rates: 1979-2005, December 2007.

[dkp]

The Top 10 Percent of Income Earners Paid 70 Percent of Federal Income Tax

The U.S. tax system is highly progressive. The top 1 percent of income earners, by household, paid 39 percent of all federal income taxes in 2005, whereas the bottom 50 percent paid a little over 3 percent. Further, 32 percent of all tax returns filed in 2005 were from people who paid no federal income tax at all. Source: SOI Bulletin, Statistics of Income Division, Table 6. Zero tax liability figures from The Tax Foundation, Summary of Latest Federal Individual Income Tax Data, Fiscal Fact No. 104.

[Hifi jim]

America has one of the highest corporate tax rates in the developed world.

But the American people are taxed less than many developed countries tax their people.

[Cal Blacksmith]

Jim,

You are assuming that the big 3 would, in fact, have closed down. That would never have happened. They would have done what should have been attached to this "bailout" and that is that they would have gone into receivership, hard decisions would have been made, the corps would have been restructured, some people would have been hurt more than others, some business would have gone out also (but that is nothing new in the machine shop biz, they go out of biz all the time then re-open under a new name and life goes on, yes I know people in the biz and that is how things work) Cars would still have been made, contracts would have been remade, the debt load would have been dispursed amongst the payees, and life would have gone on. In a worst case, the name on the buildings would have changed to Nissan, Honda, Kia etc but the same factorys would be still using the same people, doing the same jobs, turning out product to sell to the American public. See, life would have gone on and the world would not have ended and we would not have been saddled with the huge debt.

[Cal Blacksmith]

Mark, if you feel guilty for not paying enough, please send more.I send enough. Everyone needs to live within their means, this should apply to the government also.

[Hifi jim]

You are assuming that the big 3 would, in fact, have closed down.

Good point, but the Big 3 are in Big Trouble and worse off then many people realize. It's hard to imagine waking up one day and finding GM kaput but it can and will happen someday soon without some action on their or our part.

In a worst case, the name on the buildings would have changed to Nissan, Honda, Kia etc

Those aren't American owned companies. Sure they'd be employing American workers, but we need to save the company, not just the jobs.