economy

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PLEASE DO NOT VOTE FOR TRUMP!!!


It has been a while since I have written here but this is to inform you that I believe Trump to be a real and present danger to this country. You must listen to what he says and believe it. You must also read about what he has said and believe it. Your life depends upon this.

If Trump is elected he will take an isolationist position for America. His “buy American” will backfire quickly. Trump plans on putting 100% tariffs on many incoming good that we use everyday and is not in competition with the U.S. For example, have you ever wondered where all your fruits and vegetables come during the winter months, October to May? We import from South America and in large part from Chile. You cell phones are all made in Korea or China. The price for them will be doubled. There are many other examples when you think about it.

This is my plea for peace. Trump has promised he will take us out of NATO. He is then going to call Putin, who he is in league with, that he can have Ukraine because we will not longer support them. That will signal to Putin that the use of battlefield nuclear weapons is all right. (from “War” by Bob Woodward) Once Russia takes control of Ukraine his next move will be to take over Moldova, a NATO country. That will spur an all out war because the NATO motto is “what you do to one of us, you do to all of us.” Now we are in a world war, again. Is Putin crazy enough to use ICBMs in such a war? No one knows but why take the chance. He is just crazy enough to do it in my opinion.

Finally, Trump has said Hitler did some good things!! He likes both Putin and Hungary’s Victor Orban who is like a dictator in Hungary. He visit Kim in North Korea and for what reason? Know that there is now an agreement between North Korea and Russia. China is lying low while all this is going on but if a large conflict were to break out can we be certain that China will maintain its neutrality? I would not rely upon that.

Those of you who are Voting for Harris, thank you, but please talk to your neighbors and extended family members that a vote for Trump is a vote to end Democracy as we have know it. Trump has already said so.

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Keeping Donald Trump Out of Office!


It is not too early for the Republicans to start making moves to insure that Trump is never in office again. It is unlikely that any rivals will overtake him but his ability to win the election can be negated by someone like Chris Christie splitting the ticket from running as either an Independent or party name of his choosing.

Trump said very vocally and without equivocation that he wants to be a dictator for a day. And he goes on to say what he would do in that one day. To anyone foolish enough to believe he would want such power for one day is unfamiliar with the history of dictators. They always come in as reformists but none has ever made any reform which was good for their country. And none has ever been dictator for just one day. 

Donald Trump is a clear and present danger to our Democracy and it is time for his followers to realize who he really is. For reasons that deny reality, they have chosen to look the other way when it comes to the federal criminal crimes he is faced with. We actually had this situation once before in our country in the form of Warren G. Harding, a Republican. Harding was facing federal racketeering charges when his death pre-empted any such procedings and was replaced by very honest Calvin Coolidge. Consider that Harding died in 1923, just 100 years ago. And here we are again.

Even though I voted for Joe Biden in 2020, I do not consider him a strong enough candidate to insure a Democrat victory over Trump. Biden is not listening to people of his party. They overwhelmingly do not want him to run in 2024. A better choice? Right now I would say that person is Gov. Gavin Newsom of California. Newsom is 25 years younger than Biden and would be much more amenable to the young people of today. Those young people are not likely to vote for Biden, Trump either, but just skip that part of the ballot! Biden does not seem to recognize his liabilities and thinks that simply stating he is fully up to the job is just not enough nor is he believed by the general electorate. And I am one of those. It is believed that Newsom is preparing for a 2028 bid for President but why not have him now? The DNC, which holds so many purse strings, can easily tell Pres. Biden that they will not support his candadicy and that should put an end to Biden.

Furthermore, working against Biden is his perception. He has not explained the workings of our economy to show that the President, regardless of who it is, has only limited power to affect our economy. Life is full of things that are beyond the control of people and the national economy is one of them. People do not realize that it is the decisions made in the board rooms of America that have the most to do with inflation or the pricing of products. About the only place where government makes a difference in America is with corn farmers and milk farmers who are each subsidized by the government, although the disposition of those products should be of concern.

There has never been in the history of our county a time quite like this one. Republicans tie Biden to every problem at our borders even though they know full well that the Biden administration has already beefed up border security and has not implemented any new policies that were not existant during the Trump administration. Biden, although, as failed to counter this perception with appropriate comments. He has very seldom used the “bully pulpit” to forward his policies and these are just some of his failures that could lead to his loss to Donald Trump next November. Do we really want that? Decisions, hard ones, must be made now.

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Why Democrats Will Lose the House and Senate


Ever since 1932 when Franklin D. Roosevelt took on Herbert Hoover for the Presidency, first in the mind of voters has been economics, with the exception of 1944, a war year. Roosevelt’s campaign built on the failures of the Hoover administrations failures in the banking community, something Hoover, trained as an engineer, had little clue on a cure to the nation’s ills. In most elections the cry of “it’s the economy stupid!” has taken center stage. This election cycle is no different!

For about two months following the US Supreme Court’s decision to overturn Roe v. Wade, the Democrats made hay. But since then, starting in early August, inflation and supply chain shortages have been front and center in the national consciousness. Democrats have stubbornly stuck to their abortion issue.

The year between presidential elections, the party not in power has historically made gains and frequently taken control of the house and senate. That, all by itself, should have put the Democrat Party on alert. But add to it, inflation and the declining purchasing power of the dollar, Americans, as history shows, will vote with their pocketbooks!

Nancy Pelosi has a compelling long-term outlook for our nation’s future. But that, unfortunately, is not how the American public at large votes. Democrats needed to keep such issues among elected officials and then educate the American public in non-national voting years, the importance of such issues. But even more, and along those lines, Democrats have shown little action in showing America why Republicans have no better chance of changing the economic climate than do they. They have not shown that what is being experienced in the US is in fact a global issue in economics. By simply making Americans look beyond America’s borders would at least give Americans pause to reconsider political campaign claims.

The Democrat’s war cry should have been “What is the Republican plan to change our economic ills?” Republicans do not have a plan, just a war cry. Leading Democrats needed to admit that they, any more than Republicans, can do precious little to cure what is actually a global issue. About 23.5% of Americans have a college degree, however, most of them have no education in economics. In a country where education should be of primary concern, few politicians, from any party, take the time to actually educate their electorate. I suspect that is because to do so would cause that electorate to actually question their political claims.

Democrats resistance towards addressing the top 5 issues on Americans’ mind, none being abortion, will not only lead to their losing both the house and senate, but in my estimation, the Senate will break 53 – 47 in the Senate and about 235 – 200 in the house, both in favor of Republicans.

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COVID-19 Forever Changes the U.S. and the World


There is an old maxim: whatever you have thought, others have thought; whatever you have done, others have done. The effect of COVID-19 has forever altered our look at the world.

The first thing any new disease does is to expose weaknesses in the health system. When EBOLA came to the U.S. there was a temporary scare because of the uncertainty of what would happen. What did happen is those with EBOLA were immediately isolated and quarantined until the disease passed. As it worked out, only a very few people got this disease and most of the rest of us put that outbreak in the back of our minds, to our own detriment.

In May 2018 the Centers for Disease Control warned of the outbreak of COVID-19, although at the time it had not reared its ugly head. How did they know? The disease was discovered in bats in that portion of China where the outbreak started. But governments around the world, certainly the industrialized nations, did not listen to the warning scientists. Why cause a panic they asked.

Ever wonder why it is named COVID-19? Simple, this is not the first iteration of this disease, both SARS and MERS are versions of the disease. We knew in 2002 we had a highly contagious disease on our hands but our governments, around the world, chose to ignore the early warnings. Why? Those cases were confined and not allowed to spread. They also we not nearly as contagious as what we have now. Sadly, in early February when warned of an impending U.S. pandemic, our President chose to politicize it and called it “a Democratic hoax.”

But here we are, most small businesses closed, large corporations have laid off hundreds of thousands, and people are dying by the hundreds each day. May Trump’s foolish delay was a blessing in disguise. It has made all Americans keenly aware of just how vulnerable we are in every aspect of our daily lives. As a nation we will probably do a better job of washing our hands and being cautious around sick people.

But then there is the heavy downside. Trump’s $2.2 trillion stimulus is supposed to help individual Americans and small businesses, as well as some large ones, to bridge the gap between shut down and restarting. But there are two facts our nation’s leaders refuse to talk about. The first is many small businesses will not survive, Probably some of the intermediate sized companies too. The large corporations that have laid off hundreds of thousands of workers will probably not bring back all those employees for a long time, if ever.

The stock market tanked and then settled. But once the first quarter earnings are published, already skittish investors will likely engage in another large sell off. Corporate American will find itself greatly devalued and its ability to borrow reduced. Many economists have predicted a deep recession, and possibly we are looking at unemployment rates that challenge those of the Great Depression. If the U.S. goes into a deep recession it means the rest of the world will be doing the same.

Individual Americans are in line to receive a $1200 check from the government to help them. But the reality for most Americans is that that $1200 will barely cover rent or not be enough. Most Americans do not have a cash reserve to fall back upon. It won’t be long before news programs are reporting on the large amount of defaults among average Americans as they cannot pay their mortgage, their credit cards bills, because they are so cash strapped that they can only buy food and medicine. Of course there are the most unfortunate who will be forced to choose between food and medicine. This means that a single $1200 payment does not come close to meeting the needs of most Americans.

We are just one nation in both a world health crisis and a world economic crisis. Our best hope is that many of the restrictions can be either lifted or modified by May 1. Social distancing would still be enforced but in a modified version. That is, people would be allowed to return to work places where a six-foot separation can be managed. Non-essential businesses would be allowed to reopen but again with the six-foot separation dictum. This will take some good planning but it is absolutely something which lawmakers, U.S. House and Senate, can figure out. A starting point is to have enough tests available that returning works would be tested prior to being allowed back into the workforce.

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Is Cutting Taxes Really a Good Idea?


Stockton California is filing for bankruptcy, the seventh U.S. city to do so this year.  The principle of bankruptcy is a very simple one: your debt load far exceeds your ability to pay it off in a timely manner at the very least but usually means your income goes to zero before you are able to pay the minimum of your debt service.  Such is the plight of Stockton and many other U.S. cities are on the brink.  By law, government has a single source of income, taxes.  The law also requires that they annually construct a budget, bring it before the town meeting or city council, and then vote on it.  If they have done their work properly, town and city leaders have done the homework properly in balancing their income against their outlays, and leave a little in reserve for emergencies.  States and the Federal Government must do the same thing but public discussion of those budgets is generally limited to elected officials and their appointees.  Still, government’s income at all levels is derived from the single source, taxes.   Stockton probably got into trouble, in part, from poor management of its debt load but had there been a tax reduction initiative earlier, this certainly would have happened all the same, just earlier.  Is this what we want for the United States in general?

Every level of government so has the ability to carry a certain level of debt.  Usually this debt arises from the issuance of bonds.  Bonds are usually issued to cover the cost of major construction programs, such as schools at the local level, and large transit projects at the state level.  These bonds can be found in the Moody’s Investment Guide and are rated according to the entity’s credit worthiness.

The Federal Government is a whole different story, however.  It too sells bonds on the U.S. market.  But it also sells its debt and that is usually to other governments of the world.  Right now, China is one of the largest holders of U.S. debt.  This worries a lot of people.  China could, for example, say, “We want all our money, now.”  It is a “demand” kind of debt.  But this is unlikely to happen simply because the adverse hit on the U.S. economy from such a move would have world implications what would, of course, affect China negatively.

The amount of debt the U.S. is carrying now is well over one-trillion dollars.  People worry about this, as they should.   The ways to reduce debt are to reduce spending or increase income.  In the case of governments you can reduce spending by reducing the government’s size.

Mitt Romney is running a campaign, as so many Republicans have before him, George W. Bush included, of tax reduction.  Their logic says that it will put more money in the pockets of the average American and therefor stimulate a sluggish economy.  They say this with great certainty, strongly enough that their message is “you should absolutely believe them.”  There is one problem with their hypothesis.  They are projecting into the unknown and this is what Americans with actually do with that extra dollar or two.  Personally, I’d pay down some of my own debt but I certainly would not be out on a spending spree, and  think that is the same thing many Americans would do.  This act is neutral with regards to the national economy, it neither grows nor shrinks the economy.

Now if you listen to Ron Paul, he will tell you that the way to deal with lowering taxes is reducing the size of the government.  And on that point he is exactly correct.  Government is expensive at all levels.  But government is also necessary at all levels.  If you take away the aspect of national defense from government and international relations, pretty much every other government entity exists, in some form, at every level.  All levels have police forces, fire fighters, lawyers, road maintenance people, tax collectors, land assessors, and so on.

Let us say, for example, that the city of “Big” one day declares that it can no longer pay for all the services is supplies.  The Mayor of Big, after long and arduous discussions decides his city has to cut back immediately on at least one of his city’s services.  He sees that maintaining the city’s streets is one of his biggest expenses so he declares that hence forth the people who own property along a street will be required to pay for its maintenance at the level required by state law.  The people of that street must pool their money and see to the street’s maintenance which includes its repair, snow removal, and resurfacing as called for.  He then dismantles the city’s highway department and not only is his budget in balance, but now he has extra cash on hand to pay down the city’s long festering debt.  He tells the voters that their property tax is immediately reduced by 5% because of this.

With this initial success under his belt, and people all over Big declaring him their savior, he announces that he can low property taxes by another 5% just by eliminating the fire department.  When asked how, he says it requires a simple principle that was actually used in the U.S. in the early 19th Century.  People would support a local privately owned fire department.  They pay their annual dues and their house or business would have a placard placed upon it saying the owner was a member in good standing of the local fire department and fires at that address will be attended to.  Even better, he announced, you are not required to buy into the program!  You can save even more money.  But, if your house does catch fire, then you are personally responsibility for putting out the fire, and are responsible if the fire spreads to other houses and businesses.

The people are so excited after a year, and paying hundreds of dollar less in taxes, that a man from West Big, suggests to the city council that all parks and recreation areas be maintained by the neighborhoods in which they exist!  The people of West Big, where most of the population exists, love this idea because most of those parks are located in East Big where the rich people live.  Their thinking is, why should they have to pay for something they don’t use very much, if ever.  The people of East Big like the idea because not only can they afford to pay for the parks but it gives them the right to say who can and who cannot enter into “their park.”  They have long groused that a “certain element” seems to come to their neighbor which they find unsavory.

Until this point the people in South Big haven’t had much to say about anything as they are all farmers who own large tracts of land and have been relatively unaffected by all the new smaller government ideas, and they of course have benefited greatly from the greatly reduced property tax.  But South Big is where the town’s lake exists and this is the summer escape for all the residents of Big.  But the few residents of South Big decided, in accordance with the latest law, to put up a fence around the lake and declare it closed.  They promise to maintain it, as required, but since they do not have the resources to run a public beach, nor to the desire to run the beach even if they did, they simply close it down.  Suddenly the city of Big is at odds with one-another.  The time-honored right to enjoy the summer on the shores of their lake has been taken away by four farmers who simply are not interested in keeping the tradition going.  People all over Big are asking each other how it happened that so much power fell into the hands of so few people.  The farmers replied to them that they were simply using the new laws, and besides, most of their families had lived in Big as long as anyone else, if not longer.  Weren’t they entitled as much as anyone to exercise their rights under the existing laws?

The basic tenant of government is to provide services to its constituents that cannot be reasonably, or equitably, provided by private organizations.  There was a time in its early history that the United States was a morass of private highways and bridges.  To leave Boston, for example, you had to pay a toll to cross one of the few bridges over the Charles River.  Towns and private citizens set up toll booths along public and private ways to collect monies for their upkeep and for the right to use them.  Philadelphia is renowned for its private fire companies in the 19th century who actually had wars between companies over who would cover which houses.

The point is a simple one: if you want a continued level of service you now enjoy in your city or state, or at the national level, then you have to pay taxes because they simply are not free.  If you think government is inefficient then you must offer solutions in how to make it more efficient.  It is not enough to point at some government entity and declare that they are very inefficient.  You must provide both the proof of the inefficiency and the method of improving its efficiency.  In the mean time you must accept the level of funding just to maintain what you have.

My suggestion is that there needs to be a major revision in the tax code.  Although I never liked Ronald Reagan as a President, he did come up with the idea of a “minimum tax” that he thought everyone, particularly the rich, should pay.  Somehow that has fallen into disfavor by today’s Republicans.  Personally I think a national sales tax, together with the elimination of all personal income tax, would solve many tax problems and reduce the size of one portion of the government greatly.

The bottom line is, every American has to ask himself what level of service he expects from the government and at the same time, he must realize that it will cost him something.  He must also recognize and accept that everyone is going to have their own idea of how much government we need to have.  But in the end, regardless, we will have to pay taxes to pay for that government.  Highways, fire departments, police departments, national defense, airports, and so forth are things we all have to pay for.  They are not cheap.  If you want your highways to be as good as they are now, or better, then you must pay for that.  This is not the time to cut taxes.  It might be the time to reorganize government at all levels, but it is not the time, yet, to reduce taxes.

 

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America’s Next Recession Starts March 1


The Dow-Jones today topped the 13,000 mark for the first time since 2008.  That is a fact.   How, then, can I possibly be predicting a recession starting in a little over a week?  The stock market is one of the worst indicators of the future.  On March 9, 1929 the Dow Jones average was 381.70 but by the end of October in 1929 it had fallen to 198.69.  The market lost 48% of its total value, most of that happening in October 1929.  President Hoover looked at the economy he presided over in March 1929 and said that the warnings of upcoming trouble were worthless.

People are going to look at today’s stock closing optimistically.  But they need to look at a single indicator that directly feeds into imminent economic trouble.  Crude oil prices have risen over 30% since September 2011 and show no signs of retreating.  To the contrary, they show every sign of rising to historic levels.  The average person thinks of such a rise only with regard to what they pay for gasoline at the pump.  But all forms of transportation are equally affected.  This means the price of food, durable goods, clothing, and everything else goes up as well if only because they too have to be transported and that cost is reflected in the price of the item being sold.

But have you ever considered how much of everything in your life is petroleum-based?  Consider that everything that is made from plastic is petroleum-based.  That alone should give one pause to consider what rising crude prices mean.  Petroleum is also used in medicines, clothing, and construction.

I believe crude oil prices are going to keep going up because of the continued unrest in the middle east.  Lybia, Egypt, Syria, Iran, and Iraq are all in a more or less unstable condition.  And all are oil-producing countries.  Adding to this unrest are both Afghanistan and Pakistan, neither oil producers, but both home to radical Islamists who have every intention of continuing or raising the level of unrest in all the countries mentioned.

In today’s world economy energy drives those economies.  Whatever is happening to the price and distribution of oil affects all economies to one degree or another.  It is like throwing a rock in the middle of a calm pond.  The waves that rock creates moves outward in all directions, and the bigger the rock, the bigger the waves.  Right now we are feeling the waves of uncertainty in the market.  Consider that most countries in the world produce no oil at all, and two that do, the United States and China, both in the top 20 oil producers, export none of the oil they produce and import even more.  China will benefit from Iran’s decision to stop sending oil to England but of course England will suffer.  And so the rock Iran threw in England’s water will send its waves throughout Europe.

The unrest in the middle east is unlikely to settle down any time soon.  That means the market jitters are likely to continue as well.  That of course means oil prices will remain high with a high likelihood of their going ever higher.  I think it likely that the average price per gallon of gasoline will be at or close to $5 by summer’s end.  People will, of course, cut back on their purchases and with that the economy takes a hit, probably a big on.