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).