Thursday, September 30, 2010

My View

*welcome back, friendly dog!


Random thoughts from a warped and fevered mind...

The Census Bureau released some new data Tuesday from their 2009 Current Population Survey that contained some interesting and troubling news. Among the findings were that the income gap in America is getting wider. The top 20% of wage earners in the U.S. (those making over $100,000, either individually or as a household) received 49.4% of all income compared to 3.4% of income for those below the poverty line. This income divide is not healthy for our country and helps contribute to the class warfare rhetoric that emanates from the left. If you work and are earning a salary, know that you are in the cross hairs of Congress and the Washington bureaucracy because of this income gap. The current philosophy is to take a large chunk of what you make and redistribute it to equalize incomes. Might not a better proposition be to reform our tax system to encourage businesses to hire more people and gainfully employee them? Would it not be better to reform a failing public education system in this country so that young people are better equipped to compete in the workplace? Rather than punish the wage earners and the businesses that create jobs, shouldn't our tax policy support those very entities? Just some thoughts that may seem like common sense, but are foreign to a Washington establishment that is intent upon grabbing as much power- and your income- as they can.

As I get older, I realize that "getting lucky" means finding my car in the parking lot.

A Business Roundtable survey of CEO's released Tuesday portends a rocky and slow recovery for the U.S. economy. Most CEO's, in response to the survey, said they expect sales growth to slow and consequently have slowed hiring plans. The CEO's plans to maintain the status quo with employment levels means that job creation will continue to be weak and the recovery will continue to be anemic. Many companies have reported improving profits and are prepared to spend more on capital projects, but are yet to commit to increasing their work force. Ivan Seidenberg, the CEO of Verizon, said, "This is and will continue to be a long and uneven recovery. We are not seeing a lot of momentum develop here." To emphasize this point, just 31% of the CEO's surveyed said they expected to add jobs, down from 36% last quarter; 23% said they expected to cut jobs, up from 17% last quarter. We often hear about weak consumer confidence, but weak business confidence is also contributing to our economic malaise.

There are two excellent theories for arguing with a woman. Neither one works.

There is a line in the Federal budget for "debt service", but unlike debt service for you and me, this is decidedly different. Whereas when we pay back a loan-"debt service"- we are paying interest AND principal and will eventually retire the debt, the "debt service" at the federal level is payment of interest only on our debt. This is a very important point. Today, interest rates are near zero, and the interest on our nearly $14 trillion dollars in debt is the lowest it will be. Within the next 3 years, however, we will be rolling over 60% of that debt- meaning that the Treasury bills that have been issued to raise money to finance our debt will be maturing. That is $8.4 trillion dollars of debt coming due. What do you think will happen if interest rates go from, on average 1%, to 3% to renew the debt. More money will be demanded from you the taxpayer to pay this bill, or the federal government will have to curtail a number of programs. Think that is going to happen? Pay attention to this little discussed aspect of our nation's balance sheet. This could be very problematic in the near future.

My grandfather fought in World War I, and he survived mustard gas and pepper spray attacks. You might say he was a seasoned veteran.

And that, my friends, is my view.

No comments:

Post a Comment