Payroll Tax Cut

Here is an idea, lets have congress bring bills to the floor for vote that;

  • are no longer than one page
  • that have one single idea, plan, provision
I am super sick and tired of bills that contain so much extraneous stuff that its impossible to pass.

Example is the payroll tax cut winding its way through the house on its way to the senate has a canadian oil pipeline construction attached to it.  WHAT!

C'mon congress.  Really?  What does a pipeline have to do with a payroll tax cut?  Arrrgggghhhh!


Rich Poor Divide Growing

I just read a bloomberg article which states the gap between rich and poor is widening across most developed economies as skilled workers reap more rewards and well, less skilled workers fall behind.  No kidding.

The study was done by the OECD (Organization for Economic Cooperation and Development) and states that the average income of the richest tenth of the population is now about nine times that of the poorest tenth and the gap has increased about 10 percent since the mid 1980s.

The US, UK, Mexico and Israel are among the countries with the biggest divide between rich and poor, while Denmark, Norway, Belgium and the Czech Republic are among those with the smallest gap. The earnings multiple is 14-to-1 in the U.S. and Israel, compared with about 10-to-1 in the U.K., Italy and Japan and 6-to-1 in Germany and Denmark.

They use the Gini Coefficient or Index in this study and if you don't know about it, check it out on wikipedia and while you are there, donate if you can, its a great resource.  Gini rose in every major country around the world and while this maybe unfair, its totally expected.

Bottom line is that this shouldn't be a surprise.  It takes money to make money and as our societies mature, it stands to reason that those with wealth will only get wealthier.  Sure taxing at different rates may slow the rate of disparity but in the end, its a natural occurring economic phenomenon.


The difference between debt and deficit

The DEFICIT is the difference between what the government takes in and what it spends, period.  Historically, the US spends more than it takes in.  For a while in the late 1990's, we had a surplus, not a deficit which meant the government receipts (taxes, fees, etc) were actually more than what we spent.

DEBT is a financial term.  Companies, municipalities, cities and countries issue debt.  When a bank issues debt, its usually a CD.  The USA sells debt in the form of treasury bills and treasury notes and anyone can buy them, you, me, China, etc.  Remember those old posters from WWII era to buy war bonds, that was debt.  Parents used to buy savings bonds for their kids, that was debt.  When an entity issues debt, they are obligated to pay back the principal and interest.

Currently the USA enjoys a very high credit rating for its debt which means the government can issue debt at a very low interest rate and this is a sign of strength.  The deficit is a political football with both sides offering up solutions from cutting spending and increasing revenue (taxes).


Euro Bonds Are The Answer

The only solution to the problem in Europe is the issuance of Euro Bonds.

This will mean that the weaker nations can get the capital they sorely need to get over the hump.  Sure that will mean more debt but at a much more reasonably interest rate than what they would otherwise be forced to pay as singular countries.

Politically, this is a no brainer too, weaker nations can get the money and liquidity they need and the stronger nations can look like heroes.


Super Committee is a Super Flop

Did anyone really expect a different result?  The so-called super committee with an equal number of republicans and democrats was supposed to come up with a combination of cuts and revenue totaling $1.2 Trillion.

This was over a 10 year span in which time the CBO estimates our total budgets will be $44 Trillion.

What a failure.  This will obviously affect the stock market which affects all of us, either directly or indirectly.

Moody's, the rating agency said that this dysfunction is no surprise and was counting on the super committee to achieve nothing.  What does that say?

The fact that the politicians who represent us are unwilling to put aside politics to get something BIG done is pathetic.

We sorely need a third, fourth and fifth political party so that its not an either or decision.  Either you are with us or against us.  It does not need to be this way.


Congressman Need To Have Blind Trusts

The President of the United States has to have his assets in a blind trust.  What this means is that they do not know how there assets are being invested thus 'blind'.

Congressman and women do not have to have blind trusts.  You can see the conflict of interest without me bringing it up.

  • Former Speaker of the House Denny Hastert was worth a few hundred thousand dollars when he was elected to Congress. Despite a Congressional salary that topped out at $212,000, he left Congress a millionaire many times over.
  • Current Speaker John Boehner bought healthcare insurance stocks right before the public option in President Obama's healthcare plan was killed. Those stocks took off after the provision was defeated.
  • Former Speaker Nancy Pelosi bought into the Visa (NYSE: V) IPO despite the fact that the House was working on legislation affecting the credit card industry.
  • During the financial crisis in 2008, Chairman of the House Financial Services Committee Spencer Bachus was in a closed door meeting with Federal Reserve Chairman Ben Bernanke that was so secretive cellphones and blackberries were confiscated. The next day, Bachus bought investments that would rise if the market fell.
Ron Paul reported that he has owned gold stocks while voting on spending bills which if not passed would likely increase the value of gold.  Paul has indicated wanting to return to the gold standard and that's fine, what isn't fine is owning gold stocks the entire time.

C'mon people, really?  Just do the right thing.  All congressman and women should have to have all assets outside of bank accounts in a blind trust.