Zodiac Times » taxes

THE ENEMIES IN OUR MIDST OR HOW TO KILL THE WORLD’S LARGEST ECONOMY

Ella Moss — Sun, 12 Jun 2011 03:02:02 +0000

I just heard on the news that the 3rd Al Queda biggie was killed, giving the U.S. the edge on that murky shapeless war on terror we have been officially waging since 2001.
While I am happy to hear these news, I think that even we were to win the 4 wars (1.this “war on terror”; 2. in Afghanistan; 3. in Iraq; 4. in Lybia), we’ve been waging since the fateful 2001 (and I am not counting the “war on drugs”), we are heading to lose our way of life.
It’s not the democracy I am worried about here, but material comfort and relative peace on the streets (outside of occasional shootings and muggings).
It appears that there has been another war waging, and it is on American economy.
It’s beginnings are murky. But I would trace it as far back as Reagan’s Administration, that first began an unofficial war on unions. Unions make labor-intensive manufacturing very expensive and eat into profits of investors.
Well, nobody likes unions (except for unions’ bosses), so what’s the big deal?
The big deal is that everybody likes the middle class.
The middle class is as essential to any economy, as an engine to a car. Without it, economy is dead.
Even if we were to end up with a few thousands of super rich dudes, while the rest of us would struggle to survive (i.e. the middle class would disappear completely), all the many billions of these super rich would not create the job growth a multi-million population requires. They would invest into emerging markets, not the dying ones.
Why would they create a factory of any kind in the U.S., where people are struggling to stretch a dollar to pay rent, bills and buy groceries and their discretional income is so tight that all they can afford is cheap Chinese goods in Walmart, when these super rich investors can build a factory in Brazil, or India, or same China, where people are eager to spend their increasing earnings?
By the way, is not it one of the main reasons, that the numbers of unemployed right now stay where they are despite us giving continuous tax breaks to these super rich?
Yes, the second attack on American economy began during the prosperous 1990s, when Clinton Administration signed away any kind of protection of American labor force, and internet was born (internet makes outsourcing a breeze).
Suddenly, American labor force had to compete with the labor force of other countries, and American people could no longer ask for wage increase, because the majority of the world’s labor force was so much cheaper and just as good.
It took about 10 years for Americans to notice that their incomes were stagnating while their bills grew. They kept waiting for their personal prosperity to come, while changing jobs, professions and investing into 401K and increasingly expensive real estate.
But Clinton Administration also approved the deregulation of financial markets.
Suddenly, the credit was so cheap and so available, that the American people have not noticed that their actual discretional income was dwindling to nothing.
Why worry, if one could still buy a McMansion, and buy even more stuff by turning the McMansion into an ATM machine?
Yes, 1990s were prosperous. The economy was booming as people were eager consumers. The problem was that everything was bought on credit rather then with actual money.
Everyone was expecting the actual income to catch up, as it used to.
But it did not, because so many jobs have either left the country or paid as much as in other (read CHEAPER) countries.
Eventually, the credit bubble had to burst, and it did in 2008.
If the federal government did not pump money into the banks that lost the money by lending it to population so indiscriminately, The economy would have simply collapse like it did in Argentina in 1990s.
Americans were saved, although suddenly they came face to face with their economic reality and realized they were so much poorer than a decade ago.
So many of them have lost their job, that those who did not no longer dared to ask for a wage increase or benefits or union perks. In fact, they started giving up their last benefits and perks just so they could keep a job.
And that is when the final attack on American economy began.
Since it was now the federal government that was pulling the economy down the road as its engine, the middle class, stalled, the enemies in our midst began to attack the federal government.
The ideas Obama put on the table were nothing short of brilliant: invest federal dollars into aging crumbling infrastructure and green economy – labor-intensive enterprises that must hire domestic labor force. Every created job would spur on 10s of other jobs, and the economy would begin humming again.
But the enemies in our midst thought otherwise. Suddenly, federal deficit began to be used as a panic-inspiring weapon of choice.
Of course, the surplus that Clinton Administration left the country with would have been a much better deal. But if credit is sparse everywhere else, how else would you come up with money needed to pump the economy?
The enemies in our midst said, “Let starve the federal government of tax income, let’s keep taxes low so the few super rich would invest their money into economy. The government is too big and lives beyond its means. Its deficit is going to bankrupt our children”.
Americans love their children, so anything threatening the kids works as a great scarecrow.
They are also badly educated (read my American Education Reform ).
So Obama’s proposals were decimated, the government began shedding its work force, unemployment came back to its pick numbers, and unions everywhere lost their power and benefits.
Now there is no one to pull our economy from the brink. Those who are employed, work at REDUCED wages, that are getting closer to the 3rd world range.
Meanwhile, every single life staple, like groceries, rent, cable bills, insurance, etc. doubled or more in price (as compared to 10 yrs ago or less). Even those who work at median salaries have less money to buy desirable but unnecessary things.
This means that businesses producing and selling anything that is not a life staple make less profit so they begin to shed their labor force.
The less there is labor force, the less income the government gets. Since deficit is now a dirty word, the government has no choice but shed its work force and cut services to the impoverished population.
Now the time came to put the final nails into the coffin of what used to be the largest world economy: refuse to raise the ceiling on federal credit.
Once the federal government loses its credit-worthiness, watch American economy collapse into THE GREATER THAN THE GREAT DEPRESSION ditch.
The idiot dream of labor-intensive manufacturers like Koch brothers would come true:
labor in America would become as cheap as in Africa.
Unfortunately, the American workers would no longer be able to afford using the toilet paper they manufacture for Koch brothers. Like their African brethren, they would have to use tree leaves to wipe their asses. So Koch brothers would eventually go broke too.
No, it is not the federal deficit that threatens the future of our children. It is our inability to discern the enemies in our midst.
As for the scary federal deficit, it was Reagan administration that first racked it up into the trillions. Then Bush administration turned the surplus into another multi-trillion dollar debt. No one screamed of deficit while republicans were in power. The congress did not attack neither of the republican presidents for taking us into expensive wars (Reagan’s Panama blitz, Nicaragua fiasco, etc.; Bush’s Afghanistan, Iraq and the amorphous war on terror).
No, I am not happy at all with Lybia war either. I just don’t think it matters much anymore.
Like I predicted in 2008, “FINANCIAL CRISIS – IT’S NOT OVER UNTIL IT’S OVER”

Tagged: Al Queda, Bush, deficit, economy, financial crisis, global economy, great depression, India, Iraq, money, news, Obama, outsourcing, politics, predictions, Reagan, recession, taxes, unemployment, war, worry

FROM MIDDLE EAST TO MIDDLE OF AMERICA

Ella Moss — Sun, 20 Feb 2011 22:17:05 +0000

I was watching a sad Russian movie yesterday about WWII and thought how truly traumatic were the first 50 years of the last century:
In 1905, there was an on-going Russian Japanese war that have lead to the first Russian revolution, and 20,000 people perished in the earth quake in India.
Then there was a Balkan war that grew into WWI, and lead to the second Russian revolution in 1917and millions upon millions people perished all over the world from war, hardship, hunger and influenza before 1920s
1920s were the tiny period of respite, and then in 1930s the decimation of humanity renewed in earnest. Where there was no war, there was Great Depression or other calamities. Europe and North America would not see peace and prosperity until 1950s.
Of course, the wars and revolutions did not disappear then. But they became localized enough and relegated mainly to the “Third World”, so those of us, born in Russia, Europe, North America, Australia and New Zealand in the second half of the 20th century thought of peace and prosperity as something akin to an entitlement.

Welcome to the 21st century! The 9/11 of 2001 brought in a new era of an amorphous globalized war where no one is safe anywhere, The Great Financial Crisis in “The First World” and some kind of endless economic decline.
Globalization, welcomed during prosperous 1990s, brought in wage deflation and price inflation.
This in not official news just yet, but we all feel it (except for the tiny percentage of truly rich). Middle class is being systematically outpriced into oblivion.
2011 began with uprisings in Middle-East and Middle of America. Please, don’t think that Wisconsin and Ohio protests are much different from the spark in Tunisia that inflamed the Arab world. Since it happened less then 2 months ago, you must remember that the whole thing started there after a poor street vendor in Tunisia put himself on fire after a new license requirement that made it impossible for him and his kind to eke a living any longer.
Wisconsin governor, by taking away the power of unions to bargain collectively, has put that state on Tunisia path. Unions are the last remaining stronghold of the middle class. Taking away their ability to bargain collectively makes them toothless and leads to wage decline.
But the rest of the states is not far behind.

I am not part of any union. Instead, I am a small business owner who since 2008 is struggling to pay rent!
Formerly a member of the dwindling middle class, I am now watching my pennies. I went to a store another day to buy ingredients for chicken soup (a cheaper meal alternative) and was flabbergasted that it came to whooping $13.31! (This means that each bowl of that soup came to $2). With food, transit, cable, insurance, phone and rent prices going up so fast, I am being squeezed out of comfortable living faster than I can type these words!
I am sure that all my readers feel the same pain. And the aweful truth is that it is bound to get much worse.
While the Arab world is likely now to put Islamic extremist in power (watch the price of oil to sky-rocket), I really blame the American media for the problems of the past 2 years. Why?

Well, here’s why:
The times when we used to get real news from TV were so long ago, that I am not even sure there was such a thing.
Everyday they get fluffier and fluffier. Last week, I turned on channel 7 to watch World News with Diane Sawyer and watched nothing but fluff public announcements like statistics of obesity, church going, etc.
Since when statistics qualify as news? Don’t we have world news like uprisings and stuff?

But that is not the real killer. The real killer that most of the news nowadays is about opinions, sensations and side taking. What happened to investigative journalism? It is long gone, thanks to the cost cutting. And cost cutting is what we hear day after day in the “news”. This kind of “opinion news” is what gave the power to such fringe elements in politics like Tea Party people.
But most of the people in America still think that whatever they hear on the “news” is kind of official truth.
Unfortunately, most people in America are not educated enough (read my http://underzodiacclock.com/2010/10/05/american-education-reform/) to discern the stupidity of this opinion which “the news” made so popular. So Tea Buggers got elected to Congress, and now wield the real power to cut whatever jobs we have left in this country.
PLEASE, realize that whenever they scream “Cut the cost”, it is a job somewhere that is being cut!
Everytime a job is being cut, WE ALL COLLECTIVELY BECOME POORER! A person with a job pays rent, enriching a landlord, buys groceries and lunches, enriching food makers and sellers and restauranters and waiters, keeps up appearance, enriching barbers and clothiers and buys stuff with discretional income, enriching manufacturers and importers. If the job pays enough, a job holder travels, enriching travel industry. The more job holders there are, the more jobs are generated everywhere – and vice versa.
With 9% unemployment, we cannot afford to cut costs (i.e. jobs)!
Tea buggers also want to cut so called entitlements (Social security, medicaid, medicare). What this mean to you, that you would have to pick up those costs and pay more for medical insurance and taking care of your elderly relatives.
Tea buggers don’t want to cut oil companies subsidies or big farm subsidies, and they don’t want to raise taxes on the truly rich to the level of 1990s when jobs were actually created.
In other words, they don’t want to raise revenue to help decrease deficit. They think they can reduce it by cutting jobs or at the very least cutting salaries (how else would you cut costs in the bare bones world of today?).
But that only leads to decreasing revenues (every job/ salary cut means less $ collected in taxes).
The unemployed and underpaid would then go on government rolls to collect unemployment benefits, foodstamps, etc., further burdening the remaining tax payers and financially strangling the government out of existence (which is perhaps what they ultimately want). After all, they scream for smaller government and total deregulation of business. I am still waiting on them to legislate in slave labour – as a business owner I can certainly use that!!!
What we don’t hear much on “the news” is that it is the stupid tax cuts implemented by Bush and the Republican party, as well as deregulation of business and the stupid Iraq war is what brought the American economy to its knees in the first place. But for the news to trace the problems down to their roots would be something akin investigative journalism and they don’t do it anymore.
So Americans forget the actual facts and adopt the announced opinions fed to them as facts by the media in the “news”.
So I have news for you:
There are going to be more uprisings in America. Because all uprisings start when population in general can no longer eke out a living.
CUT THE TEA PARTY!!!!

Tagged: cost cutting, deficit, Diane Sawyer, economy, entitlements, Europe, financial crisis, global economy, great depression, medicaid, medicare, middle class, Middle East uprisings, money, news, Ohio, predictions, protests, revenue, social security, taxes, tea party, unemployment, unions, uprisings, war, Wisconsin, Wisconsin protests, world news with Diane Sawyer, WWI, WWII

ON TAXES, UNIONS, JOBS AND DANGEROUS POLITICS

Ella Moss — Mon, 25 Oct 2010 04:17:11 +0000

1. JOBS
What job would you prefer:
a) a job that has annual wage increase specified in the contract, over-time pay for all work done beyond 40 hours on weekdays, all benefits and pension one can live on after 10 years or so of service
b) 60+ hours per week, high stress job with no benefits, no over-time pay, no pension whatsoever and wages just above minimum specified by congress
If you said “a”, you prefer either government or a union job, if “b” (WHO ARE YOU?!) – you’re gunning for a private sector.
Since it is a buyer market, whether we talk real estate or jobs, that’s how private sector job looks like right now.
Our government is putting even more teeth into the buyer market by trying to cater to those we do not name who want less government, less unions, and, yes, less taxes. The government cuts down on hiring, and laying off as many people as possible. Our future governor Cuomo promises to cut agencies and authorities by another 20%. New York 18b panel is going to put another 1000 lawyers on the street.
Last December, a partner of a medium size law firm told me of a job interview for a associate position:
“She told me, ‘I was making $120,000 at so and so. I’ve said, ‘We do not pay above $75,000. And she took it!”
I would not be surprised, that next year he would offer $35,000 for the same job.
Now, you need at least 7 years of higher education to become a lawyer (all those student loans), and then you take on a 60+ hrs / wk high stress job. It used to be that at least salary was worth it. Not anymore.
Make no mistake, employers (me included) would really prefer slave labor. So with no competition, we would do our best to get as close to that ideal as possible.
Once “Tea buggers” are elected, we may even pass a slave law in congress.
2.Unions
We all hate unions. They make everything more expensive. Look at MTA: every year we pay more for public transportation despite lack of tangible improvements, while their workers get paid more than lawyers, have all benefits and can comfortably retire at 55 years of age. I personally may never be able to retire at all. And then they even have a nerve to strike once in a while!
Now teachers union is under fire. Just think, once you have a tenure, all you need is to show up at work – working itself is not required.
But do you know that before unions came into being, there was no tangible middle class at all? Do you realize that the U.S. became a prosperous country only when unions gained strength and created huge middle class?
When 90% of people earn subsistence wages only, they have no discretional income to buy all that producers of goods and services want them to buy. So producers cut on production and lay people off, and economy contracts even further. Take a look at how people used to live before unions: their houses hardly had closets (most people had only one or 2 dresses), the houses were much smaller and often 10 people would live in 1 room. Oh, by the way, most people in Africa or Bungladesh, or Mexico still live that way. They have no unions and lots of almost-slave labor.
Do you still want to get rid off unions?
3. TAXES
Like everyone else, I try to pay as little tax as possible. After all, it’s my money that the government takes away. The government is so wasteful, and it has no clue that I need another computer, or that I have to take my kitten to a vet.
But the grown up in me knows that taxes in a democratic society is really a money pool for services we all collectively need like:
schools, public transportation, law enforcement, firefighters, and even a helping hand when we become old and feeble or lose a job, etc.
Sometimes, of course, this money pays for something we don’t like. I don’t like wars. Some don’t like welfare.
But a strong society should have some military might (we do get attacked – 9/11 comes to mind, for instance), and a strong society should take care of its needy (or we may have riots, revolutions, or, at least, whole a lot of crime).
It tickles me that “Mama Grisly” and her brood are so against taxes and government. Alaska gets more government subsidies than any other state. What are they going to do out there once they cut our taxes: eat snow?
So the Republicans and people who drink spiked tea say that stimulus has not worked (even though their leader Bush Jr. approved it first – because they collapsed our economy). They want less taxes, less government jobs and strangle the unions out of existence. In other words, they want to create African way of living in North America (this way they would not have to import slaves, as we would have plenty of them right here).
Interestingly enough, many of them are not rich. They simply drink spiked tea and think they may become so.
They may be faithful followers of trickle-down economics. The latter was not invented by Reagan. It has been in existence until 20th century. But now the rich invest wherever they find the cheapest labor, and it is not the U.S. (yet).
The truly rich, by the way, tend to be democrats and are ready to pay taxes, because they are much better educated and they dig history and economics.
But they are spineless, and as soon as those on spiked tea yell at them, they too begin to talk cutting government (good jobs), unions (good jobs) and taxes that create those good jobs…

Tagged: Bush, economy, economy solutions, financial crisis, global economy, great depression, jobs, money, politics, taxes, trickle-down economics, unemployment, unions

MY KINDER UNIVERSE

Ella Moss — Tue, 21 Jul 2009 22:08:48 +0000

When my son was 1.5 y.o., I joined the majority of Russian community in NYC and rented a “dacha” in Catskills for a summer.

“Dachas” are cottages in a small community of summer residents, located in rural areas, often by a lake.

The cottages offer minimal amenities. “Dachniki” must bring with them bedding, pans and pens, and everything else that would sustain them for 2 months of mostly outdoor living.

Summers in NYC tend to be hot and humid. Working parents must either send their kids to camps or hire babysitters (could be more expensive). When kids are too young for camps, it could be especially hard on parents, as I quickly found out.

Luckily, someone suggested a “dacha”. I packed half of my apartment and the kid, and off to the woods I went.

Of course, I could not afford to spend the whole summer here, so we have arranged 2-weeks shifts with all the relatives we could find.

On dachas, kids and parents enjoy the company and freedom (there is no need to watch them every second, as they play in the meadows of an enclosed community, with plenty of friendly adults seeing their every move).

I fell in love with the lazy summer days by the lake, and could no longer contemplate a summer without dacha.

Of course, once my son was old enough for summer camp, we cut the season to a month (arranging shifts with relatives was too complicated), and for 3 weeks in August our son would shuttle daily to Nyak from NYC, where his day camp was located.

We could afford this kind of summer kid-care thanks to tax returns on my husband’s w-2 income. My business has been too tiny to afford anything like that.

Even though my husband and I separated 2 yrs ago, we kept filing jointly specifically for this purpose.

But as of this January, he has been laid off, and there are not going to be any tax returns for us next year.

I was coming this July to my little heaven in Catskills, knowing that this was to be the last time.

As my stay here began nearing the end (this Sunday we are leaving), I began to be more and more upset.

I was trying to imagine a summer with no dacha or summer camp:

My son would have to tag along to my work (and I work all over the city) every day. Of course, he would practice reading in Russian on the subway, and then quietly play his DS while I work, and then we would visit our park in the evening.

On weekends, we could go to beaches on Brighton Beach, Long Island or Staten Island. It would be hot, and the water would be cold and dirty…

It would be a very lonely summer for him (all his friends are going to be away on dachas and in camps, but life is life, right?

I thought about getting a dog to brighten his days, but how would we take a puppy to my work? – Scratch that…

Last night, thinking of all that, I could not sleep, so I went out on my porch to have a cigarette.

The lake at dawn was simmering, birds were having a big breakfast, while chirping away, and the beauty of all that was breath-taking.

“I cannot give this up”, I thought. “In fact, for years now my brain has been working over-time to find a way for me to live like that a year round.

This dacha is taylor-made for me by God: I’ve got the best view of the lake from my porch. I have a deck to do my yoga on. I can go for a swim without taking even a towel with me – my cottage is 25 feet from the incredible pristine spring water of this lake. People are great. My friends from NYC live on dachas a walking distance away. If I need company, it’s here; if I need solitude, I have it. I can work here. I have internet, and my cell is working here, so I can network and take orders.

And only $3,000 stand between this, and a 2-months torture for me and my son. This is not a big money. $3,000 can buy 10 days on Bagamas, 1 week of skiing in Catskills, or 1 month here. I am certain that just like God found this perfect place for me, He can find this money for me too.”

I prayed, and peace came upon me. That minute I knew, that I should leave a deposit for the next year. My Universe is kind. It knows no recessions, and is always ready to supply all my needs. This is what I beleve, and this is what I shall have.

Tagged: Catskills, child-care, economy, Faith, God, kids, kind Universe, laid off, money, recession, spirituality, summer, tax returns, taxes, unemployment, vacation, worry

FIXING AMERICAN ECONOMY

Ella Moss — Mon, 27 Oct 2008 21:01:03 +0000

Like all of us, I’ve been listening for weeks now of how the presidential candidates are proposing to fix our economy. This morning, McCain came out with all his financial advisers with the statement on how he would do it.
Well, his proposal scares me. But Obama’s take on the economy does not make me feel any better either.
As I was washing dishes and doing laundry, I came up with the following thoughts:

1) HOUSING CRISIS has been long overdue. Only a simpleton would think that real estate prices would always go up and never come down. The market rules apply here, as everywhere else. Since most of the housing market caters to middle class, as soon as it reaches unaffordability level for middle class, it has to go bust. That is called “Market Correction”, and that is what happened. In any capitalist society, these corrections must be allowed, otherwise it would hurt somewhere else.
Both presidential candidates are proposing eliminating or severely decreasing capital gain tax. But once Reagan decreased capital gain tax, speculation in real estate and taxes went rampant, contributing to the sad state of affairs we find ourselves in now.
2) FINANCIAL CRISIS was brought on by derivatives trading, made illegal in 1907 and made legal again in 2000 (?!), as well as by indiscriminate lending (mortgage and credit cards alike) – that can be brought under control by government intervention and better rules and regulations of financial industry – which is underway. But some market correction should be allowed as well, otherwise the problems will continue.
When your tooth aches, you should take a painkiller. But if you are not going to fix it, painkillers would hurt you further with side-effects.
I would be glad to see that any credit is substantiated by income tax returns and is based on actual ability to pay it back. But I would also update usury laws, making it illegal to charge more than 15% for any type of loan.
3) RECESSION has been brought on by squeeze of the middle class as much as by anything else. Besides housing prices going down, medical, tuition and everyday living (food, transport, etc.) costs went up, while income stagnated or went down. Squeeze the middle class’ discretionary income, and you would get automatic recession.
Any capitalist economy depends on the financial health of the middle class, and that is where all economic fixes must start.
Since medical expenses are almost universally a major problem, I would go with universal health care.
But it should not hurt small business with extra taxes or mandates, as Obama proposes. That is like amputating the head when you’ve got a headache.
In fact, small business (which is also middle class) already suffers from too many taxes and mandates.
Why would I hire an employee, if that means I have to add 50% expense to the employee’s wages via payroll tax, work-comp insurance, liability insurance, etc.??? I’d rather get me an independent contractor, who would do the same work for the same wage amnt, and save me $, paper-work and headache.
So how the universal medical insurance would be paid? Well, so many states already have good working models: Vermont, New York (health plus), etc.
On top of it, we have SSI model. So why not add Universal Medical Insurance to the income tax, and collect that tax in the specific UMI fund?
Moreover, as the main insurer, the government would be able to keep prescriptions and other costs down.
Granted, this would create a medical industry crisis. But I would rather take out the rotting tooth than kill my liver by constant intake of painkillers.
I would also do the same income tax special funds for unemployment and work-comp insurances and make them optional. Let it be the employee’s choice, rather then the employer’s problem.
In fact, I would eliminate social security altogether, and, instead, create livable pension fund where people are able to retire at the age of 70 keeping the same annual income level as shown on their last income tax return, and I would pay for it via the same optional contribution to the special Pension fund, collected via income tax. This way, our pensions will be our own responsibilities, and no employer will go bankrupt on that account. But we all would feel so much safer, knowing our retirement does not disappear in the bear stock market.
On the other hand, if one does not contribute to those optional funds, and something goes wrong – tough! It should not become the society problem.
I would also do the same with college tuition fund, doubling the taxable amount with each additional child. Then I would expect my child to be able to attend any college that accepts him based on his grades without extra tuition costs that may bankrupt me.
I would do the same with school tuition with the state income tax, and would add universal after-school care fund to that. This way, all public schools in a state would get equal funding, and there would be no additional costs for babysitters, extra-curriculum classes, etc.. Now, if you don’t have children, or your children have grown, you don’t have to contribute to that fund. I would, because these costs are now crippling my personal economy.
There should also be mandatory but separate funds within income tax for
defense
law & order
infrastructure
emergencies
general upkeep
foreign debt
etc
Then we would know where our money goes, and hopefully then such funds as foreign debt would become unnecessary (as we would not stand for that).
Am I proposing huge income taxes?
Actually, no, if you would consider how much business expense and personal expense would be spared instead, while huge financial risks are eliminated.
For example, the government gives me now something like $3,000 child credit for my son, but, in reality, he costs me no less than $12,000/ yr (that is without any college tuition savings, since I cannot afford them right now). Most of this money goes to babysitters and extra-curriculum classes.
If there was an universal after-school program in my state, it would cost the government less than $3,000 per child. The state would simply keep existing school buildings open till 7PM, and schools would hire a few extra-curriculum instructors (music, tennis, chess, etc.) – that would cost the schools significantly less, if payroll tax, work-comp, etc. become employees’ responsibility.
So I am not going to get my $3000 child credit. But I would save $7000 instead and use this $ to support the economy via my discretionary spending. I would not have to save this money for my retirement, because I would contribute to my pension via income tax fund. I would also save at least $4,000/ yr on my medical insurance. Overall, I would have a little more or the same discretionary income, but I would feel so much safer regarding my retirement, my child education, medical emergencies, etc.. On top of it, I would know exactly where my taxpayer money goes, and my say on account of government spending would have more effect.
Actually, in real numbers my fantasy proposal would look like this:
Let’s take a guy in minimum tax bracket who makes $36,000/ yr. He actually nets only $24,000. On top of it, he contributes to his medical insurance $220/mo.
His small business employer shells out $65,000 for the honor of keeping this guy as an employee:
He pays him $36,000, pays $18,000 in payroll tax, and the rest in work-comp, liability and medical insurances.
If my proposal ever saw the light, the employer would pay my guy $48,000 and shell out $2,000 on top in liability insurance. The worker would $24,000 in taxes, but would net the same amount. He would save additional $2,500 on medical insurance. So he would be $2,500 richer. The employer saves $15,000. So it is $17,500 going into supporting economy via spending.
Besides enriching economy by $17,500, both guys feel more secure regarding their future (medical problems, retirement, disability, unemployment, etc).
This taxation method would also have effect on ILLEGAL IMMIGRATION issue. Because then we would not care how people got into the country, as long as they pay income taxes and do not strain our economy.
I would also eliminate welfare altogether, and substitute it with unemployment and disability benefits instead. All those who have never been able to work can be subsidized in the same way they are now through the income tax disability fund I have suggested.
Other well-talked about issues are ENVIRONMENT and OUR DEPENDENCY ON FOREIGN OIL. They actually go hand-in-hand. I actually see the solution to both as a rather easy one:
I would have the government tax businesses that produce, import, or use the oil itself or any devices that must use oil, and use this tax money to give tax credit to all businesses that produce and develop clean technology, and devices able to use the clean technology. Money is always the greatest motivator. So, for instance, gas stations that sell only gasoline are taxed, and those who sell natural gas are given credit. You would see many gas stations then switching to natural gas, with car engines switching immediately following. That is what they do on most of the Caribbean Islands already: they import a car and fix the engine right away so it can operate on natural gas. But then they can fill up the tank with natural gas on any gas station there. We cannot. That’s why we still use gasoline.
But I am happy that oil is so expensive now: so the incentive to develop and use the alternative is so much greater.
The same applies to heating oil. Russia is much richer than the U.S. in oil, and much colder. But it uses steam to heat the houses.
If we could produce cheaper and cleaner electricity via nuclear technology, why should not our tax dollars pay for it? We would get our money back by paying less for utilities each month.
Yes, an accident at a nuclear facility is scary. But, honestly, it is such a remote possibility. And that guy from Texas – what’s his name?- who wants to build wind turbines also makes much sense to me.
Give him the tax credit! And tax the oil companies instead with the special oil + dirty energy tax!
I would also eliminate the present farm subsidies and subsidize the organic farms instead.
As to spur our economy on right now, please, start re-pairing roads, levies, and other infrastructure A.S.A.P.. Not only bridges fall down and whole cities get flooded because we have been ignoring our infrastructure for too long, think how many so needed jobs would be created if we get on with it now.
Jobs mean money to spend, that feeds businesses, which create more jobs in turn. Healthy economy means more taxes collected, less foreign debt, etc.
Most importantly, re-building infrastructure means jobs here in America and not in India or China.
Unfortunately, we will continue to invest into those nations’ employment (read: economy) instead of ours if businesses here would continue to pay 50%+ extra for each employee than the employee’s actual wages.
Well, too bad I am not running for office )
But if I make any sense to you, please pass my musings along.

Tagged: after-school program, college, disability, economy, economy solutions, employment, environment, extra-curriculum activities, financial crisis, foreign oil dependancy, health care, immigration reform, jobs, McCain, Obama, pension, politics, real estate, taxes, tuition, universal health care

IT’S THE ECONOMY, STUPID!

Ella Moss — Mon, 15 Sep 2008 19:00:33 +0000

In this post, I am going to deviate a bit from the main theme of the blog in order to put in my 2 cents as to what is going on this Monday, 9/15 – which is surely to become a historic date with Lehman Brothers declaring bankruptcy, AIG struggling to hold on and begging for government to save it, and Merryl Lynch being bought out by surely overextended Bank of America that just gobbled up Country-Wide and another bank.
This is American economy tearing up at the seam.
In fact, it is in the contracting stage that may take us into black hole of true depression.
It goes like this:
Fuel + Energy go up -> food + other consumer goods go up -> discretionary income goes down -> affluent consumer dependent businesses go down -> unemployment rises -> discretionary + necessary income evaporate -> housing market that is undergoing righteous correction dips further -> more banks go down -> credit tightens further ->new ventures and investment in start ups go down ->market stagnates at the bottom
Is there a way out? GOVERNMENT MUST STEP IN to reverse this chain of events, but not by bailing out greedy investors or by expanding social welfare system.
When businesses begin to fail and unemployment rises, the government should increase its payroll and spend on infrastructure, and energy R & D. Then unemployment goes down -> discretional spending goes up -> more business thrive -> more people are employed -> more $ for everyone.
None of presidential candidates talk about the U.S.’ failing infrastructure. In fact McCain wants to rein in the government spending. THIS IS NOT THE TIME TO DO IT. Let our deficit grow, let us borrow money to keep the economy going, or the big U.S.A. can also become bankrupt. THIS IS VERY POSSIBLE!
In fact, as an astrologer, I certainly look at 2010 – 2011 as the time of economic earthquake of huge magnitude in this country.
I have business education, and have been in business all my adult life. My common sense and my experience both say that tightening of credit during economic downturn is the recipe for disaster.
One fact is particularly scary: McCain’s main adviser on economy is the mastermind of chopped up and repackaged mortgages – the investment instrument of “financial destruction” that got our economy into hot water in the first place.
Even though I stand by my prediction that McCain is going to be our next president, I do not favor him. He is planning to continue the Republican party economic policies, which, essentially boil down to trickle-down-economics theory.
This theory does not work because in reality it works like this:
With global markets and labor pools wide open, outsourcing lowers the wages ->the middle class and poor grow poorer -> the pool of unemployed and desperate rises -> more people would take low paying hard jobs ->the rich may lower the wages and demand more-> the rich grow richer -> the poor grows poorer.
If you don’t believe it, go back to history books: that’s how it has been throughout history, which has always had trickle-down economy. The middle class rose to empowering numbers in this country during the middle of the twentieth century only, and only thanks to FDR’s policies set to end depression – which was exactly what I advocate: spending government money, lowering credit and putting people to work.
Obama does not have the right solutions to problems of American economy either. But, at least, he is planning on spending. He also wants to tax the rich, while bringing welcome relieve to the middle class.
I don’t know how about you, guys, but I am voting for Obama as for lesser evil!
P.S. Hail to the Chief! After 8 years of stripping the country of much of its democracy, getting us involved in the war on 2 fronts, ruining economy by allowing unprecedented speculation in real estate mortgages, he now refuses AIG the bridge loan it needs to survive. AIG’s demise would send such ripples through the world economy, that would send American economy over the tipping point. SOS!
P.P.S. 9/16
Well, here we go: McCain just announced that he would create a special commission that would study the current financial problems. As we don’t know what got us into the hole. But it would certainly create another 2 years of government inaction. By that time, we all are going to be in the poor house, because McCain also thinks that AIG is expendable (just when they finally found a semblance of a brain in the White House and are considering helping AIG to stay afloat).
The reason we all are heading into the poor house once AIG sinks is because it insures and underwrites many, many other banks and such entities as NY state and NYC!…
And, just think, I have once considered voting for McCain! Shame on me for giving Bush the Third a benefit of a doubt…
Honestly, I don’t think this country’s economic infrastructure could take another 4 years of no brains at the top…
P.P.P.S
So the White House has borrowed the brains and lent AIG staggering amount of $$$. It also looks at owning 80% of AIG. So it would become insurance Fanny or Freddy… And then, maybe, it would be able to pay its debt to China )