Thoughts Before The Alarm Sounds

      The founding fathers left us with two concise views of the role they expected government to play: In the Declaration of Independence, Thomas Jefferson wrote, “...all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness – That to secure these Rights, Governments are instituted among Men...” The Preamble to the Constitution states, “...in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, [we] do ordain and establish this Constitution for the United States of America.”       Because of the makeup of society, however, the fathers were not quite as principled, at least by today's standards, as one would expect from the foregoing statements. Electors in federal...

     The decision to raise the debt limit of the United States Government should be a no-brainer, but the idiots in Washington seem to be unable to rise to that level. When a person, organization, and especially a nation makes a promise to pay, one should be able to expect that promise to be kept. Is it asking too much to assume the United States will pay your government bond when it comes due?      I find it hard to see the difference between demanding concessions for keeping one's word, and someone who takes a hostage and demands money for a safe return - both are bandits! This whole thing reminds me of little boys holding a pissing contest behind the barn.      I know there are legitimate arguments concerning government revenues and expenditures, tax reforms, entitlements, discretionary items, jobs, recession, wars, and a host of other subjects, but whether or not to throw the government into default is not one of them. Mo...

     The numbers being bandied about in Washington these days are so big that most non-mathematicians, especially politicians, can't conceive of their magnitude. So let me see if I can give you some idea of what these guys are talking about.      There are thousands of web sites one can visit in order to visualize large numbers, but for my purpose I wish to focus on just one number: $10B. You can either do the arithmetic or take my word for it: this would be a stack of one-dollar bills approximately 678 miles high.      Now let this $10B be represented by a standard pack of playing cards. The question is: If we piled up packs of cards to the height of the Federal Budget (Note 1) , how many packs would we need? The answer is 345 packs, or a 17.4-foot-high stack! Keep in mind: each pack represents a 678-mile-high stack of one-dollar bills!      But of that 368 pack budget, 211 packs have been set aside as ...

     Of all the wise politicians (another oxymoron) in Washington, who do you think made the following remark: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”? Rep. John Boehner R-OH), Sen. Rand Paul (R-Ky.), Rep. Michele Bachmann (R-Minn.) or Sen. Jim DeMint (R-S.C.).      Although it could have been any of these, the quote is actually from President Obama's last weekend address to the nation. Apparently he was either joking, taken leave of his senses, or joined the Republican party. This is the same old gibberish the GOP has been mouthing since the days of Herbert Hoover. Let's look at these suggestions one at a time.      “Government has to start living within its means, just like families do.” The government is not a family – one excel...

     It should come as no surprise to readers of this blog to learn that the transfer of resources to the super-rich from everyone else is well underway. For details see the series “The Recession Is Over For Some People...” posted between 16 February and 18 March, 2011. A May, 2011, study by the Center for Labor Market Studies of Northeastern University , Boston, confirms it. For my purpose, two findings from the study are relevant:      (1) Using the lowest point, 30 June 2009, of the recent recession as the base figure, as of 30 April 2011, real corporate profits increased 39.6%, the Dow Jones Industrial Average increased 45.8%, and Average Real Weekly Earnings of the Private Sector decreased 1.0%.      (2) During the same period, Annualized National Income grew by $505B. While corporations' share of the growth was 92%, the share going to wages and salaries was 0%.      A recent article in Forbes provide...

     If you are not into mathematics, don't worry – you can skip that part and still understand the discussion. But here are a few items that I find somewhat intriguing, and I hope you do too.      The Monty Hall Problem: I discussed this subject on 9 March 2010, so you can read the details there if you wish. Briefly, Monty Hall was the emcee of the game show “Let’s Make A Deal.” The contestant had a choice of three doors to open; behind one was a prize, and goats were hidden behind the other two. After the contestant chose one of the doors, Hall, who knew where the prize was, opened one of the doors behind which was a goat. The contestant was then given a choice: he could either open the door which was his original choice, or he could switch and open the other closed door.      Not surprisingly, most people opted to stay with their original choice. It seems logical that since there are now only two doors from which to choose...

     Even after observing the passing scene for over 80 years, I am still amazed at the emotions that are aroused by some words. In his 1933 work, Science and Sanity , Alfred Korzybski coined the phrases, “The word is not the thing” and “The map is not the territory,” indicating that knowing the name of an item does not mean that you know everything about the item itself. He recommended that new entities be observed on the silent level – a time for observing the reality without preconceptions. But it seems that many people fail to appreciate the wisdom of keeping these bits of advice in mind.      I live in a church-sponsored retirement community, which is in the process of constructing new facilities: a chapel, theater, gift shop, a small meeting room and a large community meeting room.      As explained at a recent residents' meeting, the administration discussed various names for the meeting rooms. For the smaller room, th...

     Some time ago I mentioned Ross Perot's “giant sucking sound” of jobs leaving the country in the wake of NAFTA (See February 16, 2011). As I stated, “If that sound is a whisper, today's sound of American jobs heading all over the globe is a space shuttle liftoff.” As of today that sucking sound has grown even louder.      According to the Bureau of Labor Statistics , the US unemployment rate for May was unchanged from the April figure: 9.1%. Private sector employment increased by 83,000; this is really a net loss because 125,000 new jobs are needed each month just to keep up with the increase in the number of individuals entering the labor force.      Also in May the number of long-term unemployed increased by 361,000. That number now stands at 6.2 million.      It is important to note that the BLS's definition of unemployment includes only job seekers who have looked for work at some time during the ...

     Sunday I attended the paying of the rent by Zion Lutheran Church in Manheim, Pennsylvania. Paying rent doesn't sound like such a big deal – one writes a check and hands it to the landlord – but in this case it was a payment that started 239 years ago.      In 1762 (Baron) Henry William Stiegel and two partners purchased a tract of land on which Stiegel laid out the town of Manheim. In 1772 Stiegel, a devout Lutheran, deeded a tract of land to the church for “for five shillings and in the month of June yearly hereafter the rent of One Red Rose if the same shall be lawfully demanded.” According to tradition, Stiegel received the annual rent only two times, and apparently did not lawfully demand it thereafter.      In 1892 the present church was built, and except for two years during WWII, the annual payment of the red rose has been paid to a descendant of Stiegel ever since.      The 2011 payment was m...

     The Labor Department's hiring report for May came out in Saturday's newspapers, and it wasn't pretty. Just 54,000 jobs were created – far less than the expected 150,000. Although the private sector added 83,000 workers – the lowest monthly total in the past year - they were offset by the loss of 28,000 jobs in local governments – firefighters, police, teachers and clerks. The Economic Policy Institute estimates that up to 300,000 new jobs a month are required to significantly affect the unemployment rate.      Meanwhile, back in Washington, the figures elicited what can best be described as a collective “ho-hum,” as Congress decided to dance around the subject of raising the debt ceiling. Without such action, the nation will soon begin defaulting on its debts, with a corresponding increase in interest rates. Through April, interest on the national debt for fiscal year 2011 is on track to surpass 2010's total of $4.13B. That's 413 followed by...

     . . . or is it? On Monday August 29, 2009, Republican National Committee Chairman Michael Steele appeared on ABC-TV's Good Morning America . In introducing the Republican National Committee's “Seniors’ Health Care Bill of Rights” (SHCBoR), Mr. Steele stated, "We should protect the seniors' ability to access health care.”      The first item promised by the SHCBoR was, “. . . [to] protect Medicare and not cut it in the name of health care reform.” Mr. Steele claimed that the health care plan being proposed by the Democrats would cut Medicare funding by $500B. Actually the proposed savings, none of which came from cutting benefits to seniors , was $219B.      Jump forward to April 5, 2011. The new House Republican majority introduced a budget called The Path to Prosperity . If Congress follows “the path,” current recipients and future Medicare beneficiaries age 55 and older will see no change in benefits.   ...

     The history of politicians being caught with their pants down, literally, goes back a long way, but until Bill Clinton's adventures came to light, no one seemed to care very much. And it seems as if the burden of infidelity has fallen more often on stalwarts of the Republican party.      Oh, I know the Democrats have had their free-swingers, e.g. Franklin Roosevelt, John Kennedy, John Edwards and the fore-mentioned Bill Clinton, but they are not the ones who are out there preaching “family values” as part of their party platform. And although the Democrats have often engaged in “left-wing social engineering,” they are not attempting to highjack must-pass bills, e.g. raising the debt ceiling, by attaching “right-wing social engineering” anti-abortion and anti-gay riders to it. (Left-wing and right-wing social engineering terms were raised by Newt Gingrich on the May 15th telecast of Meet The Press. On May 17th he asked everyone to forget he e...

     I came across an item on Today which stated that Saturday, May 14th was World Naked Gardening Day . Thinking it was some kind of a gag, I did a little research, and it not only was not a gag – I discovered a couple of other nude holidays: June 11th is Naked Bike Riding Day and June 21st is Nude Hiking Day . Who knew?      Although I know some gardeners, I am pretty sure that none of them celebrated WNGD. I can't blame them because the weather was rather cold and damp, although that probably had nothing to do with their non-celebration of this great event.      I also know some bikers and hikers, and while the weather will probably be more agreeable in June, I doubt that anyone I know will be celebrating these little-known holidays. But I'll keep my eyes open, just in case.      During my research, I discovered that there are many unusual holidays; in fact, every day of the year has two or three. I h...

     ...and ignore those who elected you to office.      The Marcellus Shale was deposited almost 400M years ago in an area running from Ohio through West Virginia, western Maryland, western and northern Pennsylvania, and into southern New York state. Far beneath the surface of the sea which covered the area, organic material trapped in the shale formed into pools of oil. Some liquid petroleum can still be found in the western area; further east the oil was converted to natural gas during still deeper burial some 240M years ago.      Because of the continuously increasing cost of fuel, recovery of natural gas from shale has become economically feasible. The U.S. Department of Energy has estimated that the Marcellus contains 252 trillion cubic feet of recoverable natural gas, and that volume could increase as more advanced technology becomes available. The Marcellus is the second largest source of natural gas in the world; som...

     The Consumer Price Index (CPI), which includes the price of gasoline and food, shows an increase of 2.7% over March, 2010. Gasoline at the pump rose 5.6% in March alone, and is now 27.5% higher than it was a year ago. Food is 2.9% higher than it was at March 31st, 2010.      Economists generally consider the core-CPI, which excludes energy and food prices, to be a better indicator of long-term inflation. At March 31st this index was just 1.2% higher than it was a year earlier – hardly a harbinger of runaway inflation. Unfortunately, most of us have to live with short-term inflation; regardless of what the price at the pump will be in six months, we have to deal with it today.      According to the U.S. Bureau of Labor Statistics (USBLS), in spite of a 0.6 increase in average weekly hours worked, real average weekly earnings for all employees decreased 0.4% between March 2010 and March 2011. People are working longer and ...

     When I read in yesterday's newspaper that the Rapture was coming on May 21st at 6 pm, I thought about calling my attorney to make sure that my estate, such as it is, would go to persons among the chosen few. Then I realized that I had no way of telling who would be chosen and who would not.      Further reflection convinced me that it doesn't matter – those chosen would not need what little pittance I had planned for them, while those remaining behind would be too busy suffering the events of the Tribulation.      Perhaps a little digression would be good at this point. According to Wikipedia, the Rapture is a reference to 1st Thessalonians 4:15-17, in which Paul cites "the word of the Lord" about the return of Jesus to gather his saints. ...and the dead in Christ shall rise first: Then we which are alive and remain shall be raptured (or "caught up") together with them in the clouds, to meet the Lord in the air.  ...

     One of the ways Republicans are trying to sell their Medicare proposal is by claiming that beneficiaries would “be enrolled in the same kind of health-care program that members of Congress enjoy.” Let's examine that claim.      Suppose that on the date the “Roadmap for America's Future” becomes effective, a government employee and a non-government employee are enrolled in a family health care plan for which the total annual premium is $7,600. The government pays $5,700 (75%) of its employee's plan and allows a $5,700 tax credit for the non-government employee.      Assume that the next year the premium increases by $50 per month for an annual premium of $8,200. For the government employee his employer will pay $6,150 (75%) of the premium – he will pay the usual 25%.      The non-government employee will also see an increase in his tax credit, but it will be based on the inflation rate. Suppose the ra...

     Many TV crime dramas have a plot similar to the following: A crime boss goes into hiding. The police form a special undercover unit to find him. After months of questioning suspects, following up leads, etc., they locate his hideaway. A swat team raids his hideout, and he is killed in the ensuing gun battle.      Change “crime boss” to “Osama bin Laden,” the “undercover unit” to “CIA and SIS (Pakastani secret service),” and the “swat team” to “79 heroic Navy Seals;” now you have the story the U.S. has been waiting for since September 11, 2001.      The point is that bin Laden was found, not by the coalition forces in Afghanistan, but by good police-style work. He wasn't in Afghanistan. Although the armed forces were the best-trained in history, they were looking in the wrong place!      The old story goes that one night Johnny found his friend, Billy, crawling around on his hands and knees under a st...

     ...or starve the government beast – take your pick.      On April 24th I wrote about Rep. Paul Ryan's (R-Wis) “Roadmap For America's Future,” and its planned changes to our income tax structure. Today I will look at the Roadmap's proposals for the health care system. Although there is a connection between the health care system and Medicare, I will defer discussion of Medicare/Medicaid/Social Security until a later date.      Under the traditional system, people buy medical treatment either by paying cash for services or by buying insurance. Those who cannot afford either method may be eligible for Medicaid, and those over 65 years of age get partial coverage under Medicare. Medigap insurance is also available to cover the difference between Medicare coverage and actual medical expenses.      The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed into law by Presi...

     ...or starve the government beast – take your pick.      As with all such plans, Rep. Paul Ryan's (R-Wis) “Roadmap For America's Future” contains numerous changes to our national priorities. Today I wish to write about the changes Ryan and the Republican Party would make to our income tax structure. I will discuss other facets of the Roadmap in upcoming days.      The Roadmap would not repeal our current personal income tax structure, but would set up a simplified system parallel to it. Taxpayers would be allowed to choose which system they wish to use.      Under the simplified system there would be only two tax brackets, 10% on the first $100K of taxable income for joint filers, and 25% on taxable income in excess of $100K. It would allow a generous standard deduction and personal allowance ($39K for a family of four). The only credit allowed would be a healthcare credit, which I will discuss at a ...