tag:blogger.com,1999:blog-12410529462476979332024-03-13T11:55:48.036-07:00Bread & ButterA blog on current economic issues seen from the perspective of practicality and Real life. An attempt to unravel the prudent from fantasy in economic policy and actions of people, government and markets.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.comBlogger96125tag:blogger.com,1999:blog-1241052946247697933.post-5358980578841625832013-08-02T07:54:00.000-07:002013-08-02T08:09:18.107-07:00The Most Popular Posts On This Blog<b>Entry Pageviews </b><div><br></div><div><a href="http://economiccircuit.blogspot.in/2012/07/qualified-critique-of-popular-mmt.html">A Qualified Critique of Popular MMT Soundbites</a> Jul 14, 2012: <b>2360</b><div><br></div><div><a href="http://economiccircuit.blogspot.in/2011/10/occupywallstreet-supporters-dismissers.html">#OccupyWallStreet: Supporters, Dismissers & Repressers</a> Oct 9, 2011: <b>1642</b></div><div><br></div><div><a href="http://economiccircuit.blogspot.in/2012/11/taxation-business-expansioncreation.html">Inventions, Employees, Consumers, Business Creation</a> Nov 30, <a href="tel:2012%20709" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="1">2012: </a><b>709</b></div><div><br></div><div><a href="http://economiccircuit.blogspot.in/2012/05/diy-econ-debtors-and-inflation.html">DIY Econ: Debtors and Inflation</a> May 13, <a href="tel:2012%20540" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="2">2012: </a><b>540</b></div><div><br></div><div><a href="http://economiccircuit.blogspot.in/2010/11/price-drop-stimulant.html">The Price Drop Stimulant</a> Nov 28, <a href="tel:2010%20376" x-apple-data-detectors="true" x-apple-data-detectors-type="telephone" x-apple-data-detectors-result="3">2010: </a><b>376</b></div></div>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-47002207486940006282013-06-07T01:55:00.001-07:002013-06-07T02:06:07.416-07:00Immigration, Social Safety Net, Growth, Economic Turgorpressure: TheWay to Go<div class="separator" style="clear: both;">
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Obamerica Doeth Opposite!</div>
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Also See: Previous Post.</div>
Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-16548681126422097442013-06-03T07:19:00.001-07:002013-06-03T08:26:05.486-07:00Forced Mobility of the Gainfully Employed<span style="-webkit-composition-fill-color: rgba(175, 192, 227, 0.230469); -webkit-composition-frame-color: rgba(77, 128, 180, 0.230469); -webkit-tap-highlight-color: rgba(26, 26, 26, 0.296875); font-family: '.HelveticaNeueUI'; font-size: 15px; line-height: 19px; white-space: nowrap;">From Paul Krugman's <a href="http://krugman.blogs.nytimes.com/2013/06/03/the-triumph-of-peter-kenen-the-revenge-of-robert-mundell/" target="_blank">piece</a>:</span><br />
<br /><blockquote class="tr_bq">
..extraordinary rates of emigration among young people in Europe’s disaster economies — not really a surprise when you consider the incredible levels of youth unemployment. But as she says, once those young people are gone, who will pay the taxes to support retirees?</blockquote>
<br />The above is asserted by Krugman WRT Eurozone, <em>but let's reflect this on the current US Labor Policy</em>:<br /><br />How much worse it gets, beyond the immediate run, when policy rather forces those well EMPLOYED to move out! and those left do not have quite the skills and function experience to fill precisely those quasi/technical roles? Forced exodus of experienced H1B's manning quasi/technical positions, upon killing their Green Card apps on one excuse or the other, will have an even worse effect than what Krugman is speculating for Europe where but the unemployed are moving out.
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<em>To this blogger, the current US Labor, Immigration, Taxation policy is a desperate short term report card management (unemployment and fiscal deficit numbers), potentially ruinous for the medium and longer term: </em><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); text-align: left;"><strong><a href="http://www.nolanchart.com/article10280-for-the-love-of-chipp-and-a-quickfix-report-card.html" target="_blank">More</a></strong>.</span></div>
<br />As for Dr. Krugman's piece on Europe:<br />How would it be better that, in Europe's "disaster economies", those employed have to fund support for both: the Retired AND the Unemployed!?<br />Nay, (voluntary) mobility of the unemployed, to lands where there is work, is the relatively better phenomenon than if they stayed put.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-21839926323924301002013-03-21T22:55:00.000-07:002013-03-21T23:01:40.048-07:00Universal Background Check Is A New Disease Not RemedyThis author is clearly for Banning military style weapons of carnage from shop shelves and the streets.<br />
<br />
But <em>Universal Background Checks</em> are no substitute for the ban. Already there is little private life left, what with hackers and cyber terrorists, completely wiping it out is no remedy. It is a new disease in itself.<br />
There are plenty cases of people that behaved normal until they snapped. <em>There is no point in keeping our lives pry-able because one day we might want to buy something that is not banned.</em><br />
<br />
If a society thinks cigarettes can harm beyond repair more than just the person consuming it, it can ban them. Or alcohol, or what have you. But if it cannot get itself to ban the thing, no need to use that 'unbannable' thing as excuse to kill privacy of one's life.<br />
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It's like someone doesn't have the ***s to protect mine, so he'll squeeze 'em, and dig that! Doesn't make any sense...Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com1tag:blogger.com,1999:blog-1241052946247697933.post-3055605296651097412013-03-06T18:50:00.000-08:002013-03-06T18:50:56.942-08:00Privatized Socialism!When social ends cannot be left to private profits, the activity is often socialized. <em>But some societies try to do the socialization with a wrapper of private play, and reap the worst of both Worlds.</em> <br />
<br />
Case in point is the American Healthcare.<br />
<br />
The socialization, and the essentialness of it, has the prospect of getting captive buyers into Health Insurance which bills private sector prices, and captive private sector prices at that. Then they conveniently make <em>mistakes</em> in disbursing the benefits. And we got to run around "Appealing!" their wrong decisions, while the child that needs the treatment, whose parent and his employer paid for the coverage for that treatment all the years, has to wait in agony.<br />
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WoW! <strong><u>Appeal</u></strong> to a private sector business for their own mistakes in disbursing benefits for which you've been paying them since forever. Seriously, <em>Appeal</em>!!!! And you can forget about receiving an apology at the end of it. After all, was an <em>Appeal</em> that was...<em>granted </em>!<br />
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<br />
Same anguish, different context:<br />
<a href="http://www.nytimes.com/2013/03/04/opinion/krugman-mooching-off-medicare.html?partner=rssnyt&emc=rss&_r=0">http://www.nytimes.com/2013/03/04/opinion/krugman-mooching-off-medicare.html?partner=rssnyt&emc=rss&_r=0</a>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-40511121373046819892013-03-03T14:36:00.001-08:002013-03-03T17:15:10.074-08:00(Cutting) Size of GovernmentDetermine the Max % of GDP that can be Government sector per popular mores...(1)<br />
<br />
For each Category of Gov spend (Defense, Education, Food, Corporate Employment Assist et al), determine moral allocation of 1) per public opinion...(2)<br />
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Convert the figs in 1) and 2) to absolute dollars.<br />
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Now, in each Category:<br />
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The oversize is represented by:<br />
(Actual Spend/Morally Allocable Spend)*(Actual Spend/Value of the benefits received by intended beneficiaries). This figure carries the excess moneyspend as well as excess procedure, hierarchy and hardship faced by the intended beneficiaries in the process. <br />
It represents the Keynesian component/crutches in running the private Economy - that need to be dissolved, slowly, if not fast.<br />
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Much care needs to be taken in estimating the 'value of the benefits received by intended beneficiaries'. The value of Education received in 50 children classrooms is not the same as in 20 children classrooms. Again, a wholesome education providing exposure to music and arts is more uplifting than indiscriminately plunging every kid into the full heat of grueling Math or Spelling Bees.<br />
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Actual Spend includes spending thru the tax code = tax shields that an industry or company or individual receives that are NOT received by those that do not qualify for it.<br />
Child tax credit, mortgage interest deductions are all spending, so are the payments to personnel employed to administer/distribute the spending. Payments to shared personnel need to be allocated over the involved Categories.<br />
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Credible Plan to bring the compound ratio down amounts to cutting the Gov. This has no reference to taxation or deficit, which are but means to fund or cut Excessive Gov, dependence, and procedure & playbook bottlenecks.<br />
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The funding choice and which direction to take the Tax-Deficit split is a separate decision in itself. This blogger further contends that the tax code should be mildly progressive from the very start of taxable income spectrum, not suddenly wake up to progressivity at $250K or 400K or some such progressivity threshhold. It is about equitably funding Governance, not being a sadist to the successful. Only the artificial maintenance of the wealthy and successful in their spot needs to go.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-65439827385869023332013-02-27T17:52:00.001-08:002013-02-27T18:09:24.272-08:00Good Ideas: Sequester, Taxes, Entrepreneurship, EntitlementsFixing Sequester<br />
Unmeatcleaverize it, choose wisely.<br />
If this were happening at State level, e.g. in Education, I would remove Superintendents with meaningless oversight responsibilities over 4 neighborhood schools and taking in $250K price tag, but actually add some teachers in all areas, including drama, music and arts.<br />
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Tax Reform<br />
Take up tax reform and the much needed simplification separate from Sequester. Give most of the plugged tax code spending back as rate cuts. Low marginal tax rates and simple tax and other laws do motivate one to aspire and earn more.<br />
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Liberate Entrepreneurs: Home raised and Foreign<br />
Complex litigable laws, regulatory labyrinth and potential business creators tethered to employer's Visa and permanent residence sponsorship makes an Entry Barrier Economy where the inefficient get to thrive and suck welfare for maintaining jobs. That's not a strong economy, much less can it stay the World's foremost economy.<br />
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Entitlements Rollback<br />
Combine Entitlement Savings (again, a non meat cleaver approach e.g. to cutting Medicare by choosing obnoxious payments over coverage) with residue from tax loophole removals and rate cuts.<br />
Especially where rest of the policy is to drive out high income workers by not renewing work permits and hacking their permanent residence apps, makes little sense trying to defend the Entitlements Monster, it's quite a Lost Cause.<br />
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Looks like some of the above is where things are going, and is squarely a good thing. And the theater and the spinmaking on TV is darn entertaining as well.<br />
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Cutting is not way to prosperity but not cutting could be doom,....unless DC was right that "deficits don't matter anymore". This blogger has his doubts on that, but it is squarely a faith issue. You don't want to experiment and find out the truth!<br />
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Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-24934568093369054902013-02-27T12:57:00.000-08:002013-02-27T12:57:16.010-08:00Amazing! Time<em>"HEy! Pay this ''''''Cost''''' !!"</em><br />
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<iframe frameborder="0" height="288" src="http://media.mtvnservices.com/embed/mgid:cms:video:thedailyshow.com:424058" width="512"></iframe><br />
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<b><a href="http://www.thedailyshow.com/watch/thu-february-21-2013/exclusive---steven-brill-extended-interview-pt--1">The Daily Show with Jon Stewart</a></b><br />
Get More: <a href="http://www.thedailyshow.com/full-episodes/">Daily Show Full Episodes</a>,<a href="http://www.indecisionforever.com/">Political Humor & Satire Blog</a>,<a href="http://www.facebook.com/thedailyshow">The Daily Show on Facebook</a></div>
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<em>"Healthcare Lobbying is 4 times MIC's!"</em><br />
<em>"Ambulance Industry takes in more money than Hollywood does.."</em><br />
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<b><a href="http://www.thedailyshow.com/watch/thu-february-21-2013/exclusive---steven-brill-extended-interview-pt--2">The Daily Show with Jon Stewart</a></b><br />
Get More: <a href="http://www.thedailyshow.com/full-episodes/">Daily Show Full Episodes</a>,<a href="http://www.indecisionforever.com/">Political Humor & Satire Blog</a>,<a href="http://www.facebook.com/thedailyshow">The Daily Show on Facebook</a></div>
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<em>A robbery beningn</em><br />
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<iframe frameborder="0" height="288" src="http://media.mtvnservices.com/embed/mgid:cms:video:thedailyshow.com:424060" width="512"></iframe><div style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 12px; margin-bottom: 0px; margin-top: 4px; padding: 4px; text-align: left;">
<b><a href="http://www.thedailyshow.com/watch/thu-february-21-2013/exclusive---steven-brill-extended-interview-pt--3">The Daily Show with Jon Stewart</a></b><br />Get More: <a href="http://www.thedailyshow.com/full-episodes/">Daily Show Full Episodes</a>,<a href="http://www.indecisionforever.com/">Political Humor & Satire Blog</a>,<a href="http://www.facebook.com/thedailyshow">The Daily Show on Facebook</a></div>
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Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-39439589430659066462013-02-20T22:28:00.001-08:002013-02-24T12:45:45.894-08:00Fair Shot (@) Entrepreneurship<h4>
<em>Fair Shot, Competition and New Business Formation, Non Dependence - thru Simple Business and Immigration Laws & Paperless Compliance</em></h4>
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The Seminal issues of the times are:<br />
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<strong>Fair Shot</strong> - as opposed to crony Capitalism, entrenchment and unaffordability of Education except through immense debt slavery.<br />
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<strong>Non Dependence</strong> - reduce dependence of individuals on Gov directly as also remove Gov obligation to spend to stem failure of a private for-profit business to prevent unemployment.<br />
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<strong>Indentured Labor</strong> - either the working person does not have legal status, or is undergoing an employer sponsored permanent residence process that takes forever, with the obligation to stick to the employer until the end of the rainbow.<br />
<br />
<br />
An important angle in the solution is to delink employer from the Permanent Residence application, albeit the Guest Worker entry process can be Employer + Market based.<br />
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UnIndenturing of workers will enable new, more efficient businesses and employment, while advancing the cause of "Fair Shot" at self-made success and achievement.<br />
<br />
But Fair Shot will take more. <br />
<br />
Currently, the legal framework of business involves a ton of compliance paperwork that needs to be filed every year, and regulations leave a lot to judicial interpretation and harmonious constructs in litigation when a violation is actually alleged or suspected. This creates a huge, artificial entry barrier for new businesses (competitors). The existing companies have learnt to navigate legal waters and are entrenched in their position for reason that has little to do with how efficiently they produce or manage their business. <br />
Needless to say that this is neither Capitalistic efficiency nor an advancer of fair shot.<br />
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The barrier of unclear laws and stifling compliance paperwork is also an absolute barrier - that is, it is an entry barrier even independent of the existing businesses.<br />
And that makes it worse from another angle...<br />
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When new businesses have small possibility of springing up, the existing businesses become intensely important to the economy and for public sanity. If they are mismanaged, the Gov of the day gets armtwisted into not letting them fail, to spend as much as it takes to do that - proactively as also reactively when a really big one is going down on its mismanagement.<br />
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<br />
It is this author's clear opinion that a vital dimension of the solution to public deficits and dependent economy is competition & new business formation. The latter is enabled when:<br />
- the immigration process is delinked from employer sponsorship and only based on taxes paid and laws followed through the years of presence. Employer sponsorship ought only be required for the initial entry as a Guest Worker.<br />
- The legal framework of business is simple and free of judicial interpretation and harmonious construction in an actual litigation.<br />
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Without these there is only entrenchment and deficits on Corporate Welfare, not fair shot.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-35852972190504885992013-02-19T18:09:00.001-08:002013-02-19T18:24:20.618-08:00The Unaffordable Trickle Down: Private & PublicFrom the web:<br />
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"Everywhere in California, unions are relentlessly pushing back against even modest reforms to pension benefits. With unlimited money and manpower, implacable resolve, and perpetual energy, they will prevail again and again – until the tsunami of financial reality finally hits the shore.<br />
<br />
Spokespersons for public employee unions supposedly abhor the manipulations and machinations of finance capitalists. Pointing to examples ranging from Enron to Goldman Sachs, they claim the workers are fleeced and the rich get richer. But their own house is dirty. The public institutions they control, the cities and counties of California, indulge in financial chicanery in order to create an illusion of solvency. They fail to recognize unfunded pension and retirement health care liabilities on their balance sheets. They refuse to disclose total outstanding statewide government debt. They mislead voters into believing government workers are actually undercompensated, when in fact they now earn total pay and benefits that are well over twice the average for the private sector workers they supposedly serve. They pretend budgets are balanced by offloading entire sections of government into “special districts,” playing a shell game of deception. They campaign for tax increases to “save our schools,” then instead give the money to their partners in oppression, the insatiable pension bankers.<br />
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A fair minded reader might protest that government workers should not be compared to the aristocracy of France in 1788. Fair enough. But the average pension for someone who works a full career in California’s state or local government is now nearly $70,000 per year. And to collect that much, risk free, in the private sector, requires millions (plural) in assets. And those multi-millionaires are precisely the people our public servants, through their unions, urge us to resent, to tax, to occupy, to overthrow. The language of revolt is theirs, not ours.<br />
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Filtered through the humble green eyeshades of proper accounting standards, shimmering in the Sacramento sunset, one does not see a skyline of government buildings staffed by benign bureaucrats. Rather one may see a Bastille, a Palace of Versailles, a Hall of Mirrors, the ornate furniture of an aristocracy ruled by the union noblesse."<br />
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Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-57457040641843895822013-02-01T11:05:00.000-08:002013-02-02T12:30:34.974-08:00Of Comprehensive: Humanetea, and Talent<em>Humane treatment if one's entry was unlawful, and one is 'Talent' if entered through an American College. </em><br />
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The Neocon and some ethnic voter aggregates might get pleased, but the Principles stand mauled, false pride & megalomania moralized, and ethnic identity based voting encouraged, redeemed even before it really occurred.<br />
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The key difference between a successful and a chaotic democracy is ideological voting blocks & coalitions v/s the ethnic ones. Ethnic gift making, as opposed to Ideological or Principled redemption, once set in perception, rots the realpolitic and consequently, the socioeconomy, for generations.<br />
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Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-57554883832710211202013-01-28T19:18:00.001-08:002013-01-30T14:24:24.803-08:00God Exists..!The unimaginable, yet the most desirable of coalitions, might have a chance of happening. Not talking about the particular Senator in this story, but the mid left and the far right just need to craft a mutual adjustment where a humane yet robust Economy can sustain on a solid currency. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipn-GeRrIP9Foan7f1pc48FFaedWe-RHiLgyiubPRD8wpmFyGQQS1LgshhN1sutLSP47NHAL31jDvhEZQsYIxpbY0y8oynV6OxSGJqQi_07r5S3iMLoT_bnuC2vvBbTVyImy7k7CkcIYk/s640/blogger-image--1741612327.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="338" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipn-GeRrIP9Foan7f1pc48FFaedWe-RHiLgyiubPRD8wpmFyGQQS1LgshhN1sutLSP47NHAL31jDvhEZQsYIxpbY0y8oynV6OxSGJqQi_07r5S3iMLoT_bnuC2vvBbTVyImy7k7CkcIYk/s400/blogger-image--1741612327.jpg" width="400" /></a>The guys in the middle are upto no good. They know top-down business welfare when they feel confident that "deficits don't matter" or they will cut human services when deficit is in focus. <br />
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It is important to realize that a business creates good, and well paying, jobs when they need good workers to win and retain customers, not when Gov is raining money by procuring stuff nobody needs, for the sake of saving employment. It's like when the Federal Reserve is throwing near interest free money at the banks, who needs our money, and the rates we land are pathetic.<br />
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The coming together of the mid Left and Far right can herald an era that saves the currency while ensuring that essential investments on the younger generation are made. This coalition holds the promise of:<br />
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1. Salary and Pension Reforms (read: rightsizing) in the Public Sector: Federal and State. It does not make sense to pay outrageous 200 grand for overseeing 4 schools, and half that as lifelong pension.<br />
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2. Gut Corporate Welfare - It is not good for workers and professionals - it reduces us to mere hostages that the CEO can threaten to fire if more money is not doled to him and look successful.<br />
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3. Ensure citizen services are not gutted, including holistic child development along his/her choice and interest areas in public schools. Like mental health and support structure for children with a different brain wiring that needs a different development and learning approach.<br />
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Only a colloperation of the mid Left and Far Right can yield a strong currency on well managed Gov finances, while not losing the very things for which all public management exists for: Namely, every individual receiving the space to actualize one's talent and interest. <br />
<br />Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-76797411089897763432013-01-15T23:07:00.001-08:002013-01-30T14:26:57.984-08:00Government<br />
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Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-2598498754170221862012-12-30T22:47:00.001-08:002012-12-31T09:52:54.453-08:00Tax PrinciplesIMnsHO:<br />
1. Low marginal rates: DO NOT Disincentivize Ambition and Earning.<br />
2. Progressive rates, subject to 1. all of them.<br />
3. Married or Single should not matter: Deductions based on number of people dependent on that income. Count home ownership as 1 person, count infant as 1.5, under 16 as 1.25.<br />
4. Cap on total deduction claimable. No mortgage interest deduction - housing already covered in 3. above.<br />
5. Exempt Investment cash inflow/profits within the total cap in 4. above. Beyond that:<br />
6. All income and gains beget the same tax rate as work. Give few thousand dollars extra exemption on passive income to people near on in retirement, But:<br />
7. Cuts in Entitlements begin with current seniors. They, after all, have repeatedly sent the spendthrift representatives into lawmaking, so cannot, should not, go simply untouched. But:<br />
8. Cut corporate-executive welfare before Entitlements.<br />
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9. INCREASE Spending on the Young and Research and Infrastructure.<br />
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A tax fix cannot be as soulless and Principleless as "increase rates on the wealthy". It will not return good result.<br />
Some well off pay lower effective tax rate than their Secretaries - and that is quite a tragedy. The action lies in plugging the special treatments and loopholes, while trying to reduce marginal rates. Adding marginal rates makes those that are already paying progressively getting hit even more. Similar tax preposterity also exists within the middle classes. It is better to do a Principled plugging of these tax bucking than raise rates. Raising rates is like helping the undocumented before the documented tax contributor workers.<br />
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Nor can a solution be in simply "rob the old and the very young"; or "make the current crop of workers pay in more, while they will likely get less in Entitlements when they retire."<br />
Better to give the current workers some consolation/empathy cut in Payroll taxes if they are likely to receive less when they will retire. And better to cut Corporate-Executive welfare before Entitlement payments. <br />
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And we haven't even mentioned the taxes that have been collected from the immigrants who have to leave as their permits expire, after contributing all these years to retirement of the currently old, with the Entitlement credits on their Social Security Statements rendered meaningless. The tax deal has to also have an offshoot into Immigration fix to render justice unto the people that have been diligently contributing in the private economy, as also to tax collections: payroll taxes, income taxes, sales taxes, vehicle registration taxes, highway taxes, and what have you.<br />
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Fair taxation, Fair immigration, Gun purge - These are important. Upon doing these, the Economy will take its time to heal and grow; But not taking the high road in these issues will finish it.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-28969312805240272602012-12-17T15:38:00.001-08:002012-12-17T15:38:23.097-08:00Clean It Up.. <br/><br/><div class="separator"style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgewv7QiIrpnNizssHuJIcIKDGtkw7aro42Vy36FLZfh_IpHjPfa6wRpgDhr8euuPvCS-ggmJ7kV27BAfOu2qscpi9_2B_SqMqyaUMQWFmHIWMtdMHwdire_7FwzMneXwUnsP-iYXcGe1c/s640/blogger-image--207677396.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgewv7QiIrpnNizssHuJIcIKDGtkw7aro42Vy36FLZfh_IpHjPfa6wRpgDhr8euuPvCS-ggmJ7kV27BAfOu2qscpi9_2B_SqMqyaUMQWFmHIWMtdMHwdire_7FwzMneXwUnsP-iYXcGe1c/s640/blogger-image--207677396.jpg" /></a></div>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-26967991899982760632012-12-16T15:55:00.001-08:002012-12-16T16:08:45.403-08:00Assault Weapons: It's More than About TimeAlso: <a href="http://economiccircuit.blogspot.com/2012/08/and-shots-just-keep-on-coming.html" target="_blank">And the Shots Just Keep On Coming</a><br />
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Let's face it. Call it Reaganomics, or Corporatized Top-Down Socialism, or Bastardized Capitalism, it could not be sustained. And redoing taxes and regulatory structure with a view to competition formation, as opposed to being takers from entry-barrier protected existing businesses, is a foundational imperative, and not something that will give a Clintonesque boom in 4 years.<br />
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The politicians in power have to do something else in these years if they want their actions in these years to be remembered. It is more than time to recognize the following:<br />
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1. Assault weapons are not part of culture, as these semi-automatic weapons are not animal hunting stuff.<br />
2. If ever a Government were to get tyrannical, it cannot be overthrown by people possessing these weapons by forming a militia. Civil Disobedience will work much better.<br />
3. There are a lot of mentally deranged people out there, because America forces people into perfect social behavior on the outside, no matter how they feel about something on their inside. Furthermore, the American psycho-social system considers it normal for an individual to think that s/he is one against the rest, and that s/he will have to snatch his/her place in America, while appearing calm on the outside. Individual is encouraged to link every happening to themselves ("he sticking it in to me") rather than realize that s/he is not the center of the Universe other people are fixated on.<br />
4. Constitution is not the same thing as the Bible or the Quran that it is fixed forever.<br />
5. You let a guy buy a sexy gun over the counter, and he can go on rampage after oiling it a few years or months. If he has issues in his head, all the more.<br />
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Please get us riddance from these assault weapons, safety of our children in schools and our own selves in malls and cinemaplaces is anyday more important than a new economic boombubble or saving or paying a little more taxes.<br />
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There is no prosperity without there being life first, and some surity that it will be conserved. There is disagreement whether aborting a foetus is infanticide. But there is none that killing of children is toddlercide. And such mass toddlercides cannot occur without these deadly weapons that have no business in the hands of civilian population. <a href="http://economiccircuit.blogspot.com/2012/08/and-shots-just-keep-on-coming.html" target="_blank">Ban these weapons</a>. No culture, religion or constitution is frozen in time. These are no hunting weapons, and these won't overthrow no Gov. But these are enabling and easing the massacre of our children by madmen. By all means work on the culture of perfect exterior behavior or any other aspect of social life that is causing so many deranged individuals, but get rid of these assault weapons from the streets....as of YESTERDAY. This is a leadership legacy begging to be made. There is not much else today, tax code overhaul, howsoever much needed, won't make a legacy. It won't make an instant boom to control the deficit. Assault weapon ban is the thing to do even if it fails. But why should it fail?Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-59351993163828020082012-12-13T11:33:00.000-08:002012-12-13T16:38:02.437-08:00Taking Charge - Fairness Begins at Home<em>Not protecting Capital income ought not convolute to discouraging Capital formation, is not the same thing as slapping the rich as a statistical group. Need is to go beneath the bullet point of 2% - 98% for achieving fair share.</em><br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3JwfkrilNzi1veRRXw7j8xfvwvz29YfPufcLmFbvtDblDXDJfL9EXbmI88cwFUGdMgKsp92SgnyviKlZpxBLM37oHBV9WKSNoekUphYzs-dgUAO7-4Sl4e42C4Op38QoISoAMpu3jkLs/s640/blogger-image-258024446.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="270" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3JwfkrilNzi1veRRXw7j8xfvwvz29YfPufcLmFbvtDblDXDJfL9EXbmI88cwFUGdMgKsp92SgnyviKlZpxBLM37oHBV9WKSNoekUphYzs-dgUAO7-4Sl4e42C4Op38QoISoAMpu3jkLs/s400/blogger-image-258024446.jpg" width="400" /></a></div><div class="separator" style="clear: both; text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: left;">Aggregate Statistics show that the rich people pay twice the proportion in taxes as they have income. That sounds not bad for progressive taxation. Yet there are such among them that pay a lower tax rate than their modestly paid Secretaries. The issue is perhaps not rich man taxation v/s poor man taxation, but lopsided taxation with babycuddle treatment of certain income types, and deductions that make the tax code one that does not provide fair contribution towards national expenses. The ones that are able to avoid doing their fair share towards maintaining the collective infrastructure, in which they do achieve, dump it on others in their class to cover their fair share as well! And this is the case in both higher and middle income brackets. Simply raising tax rates on a given class, or all classes, acutes the anomaly in each affected class, or should one say, atrocity.</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;">Fairness begins at home. The 98% need to have a paradigm of fairness that is applied to themselves as it does to the 2%. And this implies, getting rid of the special treatments and deductions that help some buck the progressiveness of the tax code, and make it overbearing on others in their own class. </div><div class="separator" style="clear: both; text-align: left;">There is not a dichotomy between labor and capital. Today's labor income becomes capital for tomorrow. The businesses of today need one to work for a few years, even couple of decades, not merely to save for Capital investment, but also to understand the nuances in today's technology enabled business approach. A better paradigm of fairness is required than the macro aggregate level 2% - 98% negotiations. Else, it does become like punishing a man for suceeding when he makes it in his ambition. Confiscatory taxation is not a good thought, something that even resembles it isn't something to court.</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;">To finds its place and prestige, Labor also needs to take responsibility, and start to view things differently than rich man-poor man or Worker and Capitalist. Rather to see everything, and every income as Labor, and ask for equal treatment for taxation. Some of the things that can be done:</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><h4 class="separator" style="clear: both; text-align: left;">Reject High Marginal Tax Rates</h4><br />
Prefer removal of special treatments and deductions to uplift revenue with tax rate cuts - to even the burden within the class aggregate - to provide relief to those that are bearing higher tax rates than others of their class and beyond because the special income categories and deductions do not suit them.<br />
<h4>Not Discourage Achievement</h4><br />
Keep marginal tax rates low, but make sure that there aren't income and usage categories that shield the application of those rates.<br />
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<h4>Reverse the Welfare and Deficits Debate</h4><div class="separator" style="clear: both; text-align: left;">All Welfare can be funded with taxes on the portion of one's income upto $250,000 and say, half of Corporate Tax collections. Let the other half of Corporate Tax collections and taxes on the income slice above $250,000 alone to fund the servicing of Securitized Treasury Debt and Corporate Welfare. This arrangement will see the middle classes demanding rightsizing of Government welfare delivery machinery and procedurism, and rightsizing of the welfare benefits; while the rich will be the ones figuring out whether Govt deficits matter or not, with it's reflection falling on their own taxation. Because, in this paradigm, the middle class income portion (< = $250 K) pays fully for what the middle and poor class uses (welfare).</div><h4 class="separator" style="clear: both; text-align: left;">Take Charge</h4><div class="separator" style="clear: both; text-align: left;">It's not about isolating and slapping the rich man, it's about even spread of the burden of paying for civilization. The even burdening includes doing it in one's own class at the same time - not simply increasing the burden on the aggregate of rich people. And staying ambitious about becoming rich oneself. Taking charge implies taking responsibility for fairness and seeing the <strong>same</strong> thought about progressive taxation smoothly run across the incomes, from the bottom to the very top.</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><div class="separator" style="clear: both; text-align: left;"><br />
</div><strong>Simple, Progressive, Unatrocious Taxation</strong><br />
Top slab rate at 38%, even 33% I would say. <br />
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</div>Standard Deduction: $14,000 <br />
Itemized Deduction Limit: 22,000 <br />
Financial Income Exemption Limit: $18,000 ($28,000 for those 58 years or over) <br />
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The individual/family uses the ONE (and Only One) that is the highest for the individual/family. On the rest of the income, the slab rates apply. A few family oriented exemptions like dependent child credits can be additionally retained. <br />
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<h4>Finally</h4>Tax Rates simply increasing is nobody's win - it'll actually be a slap on labor and mainstreet industry and ambition, to continue cuddling of casino (finmarket) income. If rates can be decreased by removing special treatments, even the casino players will likely take the common low rates in their stride.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com1tag:blogger.com,1999:blog-1241052946247697933.post-12641136127876125552012-12-05T22:21:00.001-08:002012-12-06T14:06:05.855-08:00Crash Me Not!This blogger might well be the last person to recommend that a Government make policy with a view to affect the stockmarket. It's a casino, and a thrilling one, best left alone.<br />
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But there is little point in causing a crash in the ubiquitous public pastime by not being able to do a simple thing that needs to be done in any case...Making the public budget sustainable, while adding physical and human Capital for the future. This blogger is bewildered with the semantics and language killing any agreement:<br />
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Why does it have to be "1 DOLLAR OF REVENUE for 3 dollar of spending cuts" and not "THREE DOLLAR OF SPENDING CUTS!!! for every dollar of Revenue added"<br />
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Why "raise tax rates on the wealthy" and not "Make and Apply a progressive AMT on slabs (0-40K, 40-110K, 110-180K, 180-250K, 250K+) of Gross Total Income (work + Cap Gains + Finance)" for until there is a Comprehensive Tax Reform that "reduces rates, and exemptions, deductions and special treatments" and frees us from the horror of struggling with taxes every year, yielding a tax code whose progressively cannot be mauled or flipped with application of loopholes. <br />
The temporary AMT, since it'll apply on GTI, would need tax RATES *far lower* than the ones on NTI with no dodgeability unto its progressivity.<br />
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Why it needs a one time deal, and not "As you give me Revenue uplift, I will give you cuts....3 times over."<br />
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and MOST IMPORTANT:<br />
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Why not: Mr. Boehner gets to choose how to raise the revenues, while Mr. Obama gets to choose what the reciprocal 3x cuts (restructure-to-shrink) will be, as the former delivers the Revenues.<br />
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But the real thing is the Overarching deal:<br />
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The increased revenues to be exclusively applied to the deficit, as also half of the cuts. The other half of the cuts-savings used back to strengthen the delivery of Education and Physical infrastructure that the Gov directly provides, not through private parties, and not utilized for expansion of employment in pushing rules, procedures and files.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-84516628219578182712012-11-30T12:03:00.000-08:002012-12-03T16:11:02.643-08:00Inventions, Employees, Consumers, Business Creation and Expansion: Lesson from Business History<span style="font-size: x-small;">And applied correctly with </span><span style="font-size: x-small;"><strong><em>“You cannot dip in the same river twice!”</em></strong></span><br />
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<span style="font-size: x-small;">The importance of competition and new business formation:</span><br />
<span style="font-size: x-small;">Today's worker, homegrown and immigrant, is tomorrow's maker; and Work income is Competitive and New Vista <em>Capital-in-formation</em>.</span><br />
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I just had a chance to watch The History Channel program: “The Men Who Made America”. It was about business tycoons that played in the turf called America and, in the process, made it what it became – the most thriving and exciting economy in the World. These businessmen: the JP Morgans, the Rockefellers, the Carnegies and the Fords worked intently even as their companies faced antitrust suits and sometimes got broken up, even under what would be called today as confiscatory taxation, and the like. What drove them even in such an environment?<br />
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As one can see through the program, the business success of these men was built on new discoveries and Inventions occurring in America: Electricity, Automobiles, Electric Lamps, and so on. The employees they hired to produce their business item became consumers of someone else’s product. In the process, Americans became recruits into the working middle class. These tycoons expanded through times when they could hoist their chosen men into political office and when they could not, when they had a Gov that caressed them and when it checked the power of their companies, when there was no Income Tax and yet when there was, and very high at that.<br />
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Firstly, why they accepted high taxes? Perhaps they understood that society needs to glue together to some point for them to have a nation and market in which to sell and be important and powerful.<br />
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Not to deny the motivational aspect of a low tax system, but the most important thing that drives investment and business expansion or creation is a desire to be important and wealthy in the economy <em><strong>and the excitement of creating new customers for one’s product</strong></em>. <br />
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But the above have come full circle now. <em>The population of American consumers is not expanding as much</em>, most are already out of poverty and businesses have run out of ideas for new products. <em>Other economies now provide that opportunity that America provided before – of finding new recruits and customers, and win new territory</em>. <br />
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America is no longer the place for existing businesses to do more of the past because <em>“you cannot dip in the same river twice</em>”. Cutting Corporate or investor taxes is hardly likely to help the matter, and if anything, even creation of future customers would be doomed when the younger generation and children do not get the nourishment that they need.<br />
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<em><span style="color: blue;">But there is also opportunity in “You cannot dip in the same river twice” in the light of its antiparticle: the history of business expansion in America</span></em>. I see two dimensions that are important: <br />
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<h4>
Increasing Population with natural Purchasing Power</h4>
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The foremost lesson of history is that a business expands to conquer new customers that have the purchasing power to buy its products, or to produce and distribute products at lower price point and, again, conquer new customers that were not acquired before. So if the businesses run out of new conquests within an economy, they will go outside. <br />
<em>An important thing is that the purchasing power that they are trying to tap be natural. If it is largely welfare payments, the game loses its charm for the businessman. Stagnating America with restrictive policies wrt high income immigration is cross purpose to the imperative of increasing population with natural purchasing power, not to speak of losing out on innovations by ambitious immigrants.</em><br />
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<h4>
New Business Formation</h4>
<strong><em>For a New business the entire market is fresh customers!</em></strong> Yet the contemporary American thought is sold out to existing businesses as job creators that are, in fact, domestically saturated wrt customers that can buy their stuff. Starting a new business, even running an existing one, can drown a person in compliance paperwork and navigating regulations that nobody can interpret with certainty. It produces rent for legal and financial instrument middlemen, and is a drag on the company and true entrepreneurs. Simplification of the legal steps to business launch is in order. <em><span style="color: blue;">There is much more hope from new businesses creating the next wave of real employment</span></em> (not make believe clerical work created to placate the Gov for providing the entry barriers I just mentioned and the unending Corporate and Executive tax cuts and loopholes) <em><span style="color: blue;">than with existing businesses</span></em>. And it is imperative to realize that today’s worker, in his head, is not a worker forever – he is looking at making a business tomorrow, especially if with his income he is able to save for it. It is neither a good idea to create entry barriers in business with legal complexities nor making work income the only source for Gov to raise the revenue that it needs for keeping the nation-market together and invest in the future working-consuming population. Also in order is freeing up the medium and high income, documented, immigrant from the clutch of the Visa sponsoring employer. Expedited Permanent Residence Scheme based on length of work done and taxes paid in the United States, and without employer sponsorship of the application, would be in order - like applying driver's license at the DMV. <br />
<br />
<em>There is fire in the belly of young workers, homegrown and immigrant, to go into business and be job creators. Make business launch and run simple, reduce work income taxes by merging all tax categories together; and make permanent residence-seek independent of employer sponsorship, to enable the young immigrant to launch businesses before he loses the fire forever awaiting the elusive green card tethered to the sponsoring employer.</em>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com8tag:blogger.com,1999:blog-1241052946247697933.post-5966713808711185922012-10-19T14:05:00.001-07:002012-10-19T21:05:30.222-07:00Corporate Welfare<div class="separator" style="clear: both; text-align: left;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2ZqFKOBAXoxBciWCa_QwtYP_TBoJk45XUQyUqJPpUfjr21C3qdE-EUgf1-uv5PEGIhWOEpKCbG0hKRoyoMgxQYeZFmF3JK3wWX6geMOux9a2dHs1_Qomma10DLwzoffe5qSZ_ZDY-sbA/s640/blogger-image-507152582.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="368" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2ZqFKOBAXoxBciWCa_QwtYP_TBoJk45XUQyUqJPpUfjr21C3qdE-EUgf1-uv5PEGIhWOEpKCbG0hKRoyoMgxQYeZFmF3JK3wWX6geMOux9a2dHs1_Qomma10DLwzoffe5qSZ_ZDY-sbA/s400/blogger-image-507152582.jpg" width="400" /></a></div>
Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-74321222992171436542012-10-03T21:37:00.001-07:002012-10-04T09:09:30.033-07:00DisEntrenchMediation: Healthcare & EducationHealthcare and College both had one problem: Entrenched mediators grabbing control of pricing rather than the market. Attempt in the former case has been to add Gov to control the Entrenchmediary, while on the latter, it has been about removing the Entrenchmediary leaving only Gov. <br />
Are these the best options in the respective cases? This author believes that in both cases, there was a better Regulated-Market solution. The problem is not as much as the intermediary, rather it is/was its entrenchment with public purse on the hook guaranteeing the intermediary's full tummy. I have written about healthcare before, that essentially the employer mandate is best removed, and replaced by a no-frills, individual-buy, catastrophic-only public option.<br />
<br />
In this post I focus on Education.<br />
<br />
Like Healthcare, College prices are a scam. They are supported by the essentialness that a young person sees of College as his enabler for better earning prospects. So it's not like buying oranges. If you think you need Education, you cannot withdraw from the market if the price is too high. The intermediary banks had been willing to finance any price for a college degree, secure in the Gov guarantees for the loan they made, and the fact that College loans do not get discharged in a bankruptcy and have to be carried through one's entire life.<br />
<br />
A Regulated-Market solution to the scam would be to let the intermediary banks stay in the game, but simply legislate that they have only 7 (or max 10) years over which they can recover their loan from the loanee, and in any given year, no more than 40% of the loanee's income can be taken as payment. And with No Gov guaranteeing what could not be recovered under the law. College Education pricing will immediately see correction to reality, as banks are no more going to finance scam pricing of these programs, and it would cost the public treasury...nothing.<br />
<br />
Disentrenchmediation in essential items sometimes takes a little Gov or Regulation, but needs to be done smartly, where it gives the best results at least, better NIL, public cost, while forcing private sector to exert and unleash its efficiencies rather than ride the essentiality of the item helped by a Gov guarantee or perceived obligation.<br />
<br />
Especially a Gov that wants to stay economically feasible needs to slay market capture, not subsidize it more.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com2tag:blogger.com,1999:blog-1241052946247697933.post-70252014197030914612012-09-18T21:29:00.001-07:002012-09-19T00:24:17.382-07:00Bernanke Put = Regulated Greenspan Repeat!What caused the Financial Crisis: a certain course of action or lack of regulation? <br />
Was it mere lack of regulation, while the course was itself a great one? Or was the crash a hopeless, unavoidable part of the course itself?<br />
<br />
Let's revisit.<br />
<br />
There was easy money policy to get over the recession of 2001 caused by the dot.com and telecom busts. A lot of this money that the banking system could draw for a rather cheap price began to flow into property financing that sent property prices very high. For one could buy a house for a significantly bigger price tag yet pay the same in monthly mortgage payments. On top of it, ARM (teaser initial rate, interest only) financing, to take it higher. With 'valuation' of their property soaring, was reaped 'Wealth effect spending', not to speak of HELOC spend by quite a few. Great economy! Until some of the easy money began to flow into commodities speculation, driving their prices up as well; while it was time for some of the ARMs to reset. People that could no longer pay both their mortgage obligations and their living expenses had to foreclose on the house. The smallest of supply shocks...and..Crash...like a house of cards.<br />
<br />
Apparently the same story, and officially and consciously so this time, is intended to be repeated. Except that there is now some additional regulation around it. But the other side of the regulation is that this time more money, and sooner, will get into commodities. It could well lead to a fresh wave of foreclosures, and fresh crash, before even taking home prices significantly up first.<br />
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Talk about "going back..." This sh!t happened before. If anything, last time was probably better than this time could possibly hope to be.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-44502294328787677442012-09-15T21:38:00.001-07:002012-09-16T10:50:27.343-07:00Desperate Argumentation?From:<br />
http://krugman.blogs.nytimes.com/2012/09/15/mitt-romney-liquidationist/<br />
<br />
<blockquote class="tr_bq">
..view (opposing QE) only makes sense if you believe that the problem with our economy lies on the supply side – that workers lack the incentive to work, or are stuck with the wrong skills, or something. And that’s just not what the evidence says; instead, it points overwhelmingly to an insufficient overall level of demand.</blockquote>
<br />
<br />
The above appears to me as the most naked attempt at pulling down straw-men.<br />
<br />
"Insufficient overall demand" appears to me a simplistic, even false, view of a situation where demand for existing private sector goods stands saturated. The only pent up demand for these goods is with people that are unemployed, and they obviously have insufficient income and neither propensity nor worthiness in the eyes of the bank to get credit to satiate this demand.<br />
<br />
Does QE help this situation at all? The QE worshippers believe that doing this thing will raise inflationary expectations, while reduce the real cost of borrowing for investment and consumption. So both of these will take off. People that have been sitting at the sidelines of investment or consumption will now take the plunge, lest their savings be lost to raging inflation.<br />
<br />
But if the demand is already saturated with those that have income, what for will there be real investment, and who's there to borrow and spend that has the ability to borrow?<br />
<br />
--<br />
The things where there is less supply than need is in healthcare and public interest goods, especially teachers and schools. Only the marriage of unemployed to the areas of deficit demand can deepen the economy. If the skills don't exist domestically, importing professionals for these areas will help, the unemployed can then find absorption in service and recreation sectors that'll need to expand to grab the business from the skilled newcomers. In that situation, no QE will be needed. Just low'ish interest rates will suffice for investment to take off, and will harden as they do take off.<br />
<br />
Meanwhile, there is <em>QE, like doubling down on Tylenol when the headache has been diagnosed to be brain tumor</em>. Not sure if it'll hurt like an overdose of medicine meant for some other situation, but it's not going to 'help', other than forcing people to take their money from their petty yield (<em>I fondly remember the time a few years ago when FDIC-backed Internet Banking gave me a good 4.7%, term CDs a little higher</em>) savings accounts into the stockmarket, and then lose it in the next crash. No one till date has succeeded in forever sustaining a bull run in share and property prices forever. The manipulations with monetary acrobatics, to lean on "wealth-effect" spending have always eventually crashed. I am not even sure how much of fictious wealth-effect spending one can get. Maybe one could buy the iPhone 5 (something one will buy even without a QE3) and take one extra vacation every year. <em>Other than that...?</em>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-61706344142172039272012-09-11T11:17:00.001-07:002012-09-11T17:33:51.602-07:00Average and the Marginal ~ the Case of Direct Lowering of Tax Rates<div class="separator" style="clear: both; text-align: center;"></div><br />
<div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjG4ppR3WFhL270Zezb0kC7N9OJJR2jG8F99TZeyLVDrfnNHSrA1TWWQeKuvMtQvpfuaq8CXyuknk6cwhkl1F5i_ZMm0GrFMnoVTXMKLm04pJO_QCT-zgUMua4HXtoH0rkzEjLBfeN6E-M/s1600/taxec02.png" imageanchor="1" style="clear: left; cssfloat: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" hea="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjG4ppR3WFhL270Zezb0kC7N9OJJR2jG8F99TZeyLVDrfnNHSrA1TWWQeKuvMtQvpfuaq8CXyuknk6cwhkl1F5i_ZMm0GrFMnoVTXMKLm04pJO_QCT-zgUMua4HXtoH0rkzEjLBfeN6E-M/s1600/taxec02.png" /></a></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: Calibri;">It’s a great idea to trade-in deductions for lower rates for ALL income groups. It should be given out in ALL income groups, not just the top bracket. Additionally, gains in stockmarket play are best treated on par with work income towards achieving a further cut in the rates. An illustration..<o:p></o:p></span></i></div>Consider an economy where there is only one tax rate = 50%, with most people having work income of about $100,000 but able to claim deductions of about $50,000.<br />
<br />
<br />
<br />
Current Tax Bill for these people = 50% * $(100,000 – 50,000) = $ 25,000.<br />
<br />
The marginal tax rate being 50%, any new dollar earned gets taxed at 50%.<br />
<br />
<strong>EVENT:</strong> <em>Deductions eliminated and tax rate directly lowered to 25%.</em><br />
<br />
Tax Bill now = 25%* $ 100,000 = $ 25,000 (No Change)<br />
<br />
<em><strong>However</strong>, the marginal tax rate is now 25%.</em> <span style="color: blue;">Therefore, every new dollar earned by one’s hard work and ingenuity now results in only 25c in tax rather than 50c.</span> <span style="color: blue;">THAT’s a great incentive to flex one’s muscles towards raising one’s income with hard work or starting a business that would employ people.</span> <em>Towards the latter though, the economy will also need to lose compliance paperwork requirements, simpler tax and regulatory codes, freedom to layoff and hire, and single window dealing with Gov agencies.</em><br />
<br />
Additionally, bringing income from stockmarket play on par with work income (<a href="http://www.nolanchart.com/article9811-the-haves-and-the-have-shots.html" target="_blank">capital-in-formation</a>) will enable further reduction in marginal rates.Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0tag:blogger.com,1999:blog-1241052946247697933.post-61532486789344609022012-08-30T13:16:00.000-07:002012-08-30T15:17:12.423-07:00National Self-Concept, Top-Down Business Welfare & Entrenched Economic
“Superstars”<br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">It always amazes me that the Government is held responsible for jobs created or lost in the economy, even as it gets rapped for paying retirement support to the old and for spending money on wholistic child education. Bailouts of financially failed companies are universally resented, yet failure pre-emption through credits, subsidies and tax cuts get the cheers. The Government is expected to be “Business friendly” and such ‘friendliness’ includes doling out welfare to business. Sometimes, a general carpet spending is advocated, so the businesses can 'survive'.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">The germ of thought that underlies these disguised bailouts is that the people running businesses need to be assured of the income that they have been making, indeed of growth thereto, in order to stay motivated to continue in business. Like they have no ability to adjust to changed demand and pricing scenario, and that the top shots in these entities will not, and should not be expected, to take cuts in their "profit/performance-linked income" in line with the new surplus these businesses are able to generate. The bailed out banks were soon paying their Executives the same money that they made before they nearly drove their respective companies into the ground. The deeper thought seems to have been <em>“what will we do if they choose not to continue in their job?”</em> <o:p></o:p></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">It takes a deeply pessimistic self-concept as a pool of humans to not be able to think beyond the current “superstars”, to ‘maintain’ their “stardom”even when it has actually become fiction.</i></b> Such things as suppressing the news of death or inertness of a ruler are found in countries that have been forced to attribute all their achievement unto one person. Like it were acountry largely of morons that will not throw up another competent leader.<o:p></o:p></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;"><em><strong>This author calls for shedding of pessimism, seeing today’s worker as tomorrow’s confident and able entrepreneur and the executive, and an end to corporate and executive welfare policies.</strong></em> Top-Down Corporate maintenance assaults the importance of the highly productive and smart worker to the Enterprise, burying such people in the swarm and number of the "employed", with 'employment' effectively reduced to a corporatized welfare dole with an Employee ID. That any welfare needs be directly delivered to the individual rather than through employers, including early retirement to make way for younger workers to get into the workforce and chase the American Dream. <em>I do support cutting file pushing, procedures, as also paperwork regulations, as the other leg of the unshacklement of the young and the ambitious, as also towards deficit management.</em></span></div><br />
<div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">If nation states are now supposed to serve the Multinational Corporate States as suppliers of workers, nations will need to nourish their young with Education and health and enable the old to retire forth early enough. The companies themselves cannot be relied upon to provide these to their workers’ families as they can always do future hiring from well-nourished pools available elsewhere.<o:p></o:p></span></div><span style="font-family: "Calibri","sans-serif"; font-size: 11pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">If, on the contrary, nation states are to continue to be the primary force in one’s life, then businesses and corporate bodies need to pay their taxes for the upkeep of society, and stressing the individual over collectives demands that more taxes be collected towards it from income that businesses generate rather than what they pay the individuals for their contributions to it.</span>Ohm (Ώ)http://www.blogger.com/profile/14090654932133115900noreply@blogger.com0