There is an article in the Salt Lake Tribune this morning that states that the charitable deduction on your income taxes is in fact the same thing as any other transfer payment...where your taxes are used as a form of public welfare assistance. This is in fact, a stretch of the truth.
The reason for the charitable deduction on your taxes is to encourage people of means to give to charities. This can be tithing to your church, a donation to the United Way or a gift to the Road Home or some other type of donation. It is believed that if the Government encourages people to give to charities, there will be fewer people coming to Congress with their palms skyward. This is not a transfer payment, because it is tax money that the government will never collect. If you never get the money in the first place, how con it be transferred? It is much like your local Fresh Market offering you a $10 discount on your grocery bill if you donate some of the cans of tuna you purchased to the local food bank. The $10 discount is not, in fact, a cost to the store as it never becomes revenue. The are simply offering a discount to people who are willing to donate to a worthy cause.
Therefore, the income tax deduction and public welfare are two different entities. Now, the article mentions congressional candidate Carl Wimmer and his desire to reduce public welfare payments. There are those who believe that people become dependent on public welfare assistance and never get off. I will admit that this is painting with a broad brush. Most people will have a time in their lives when they will be out of work or suffer some sort of financial crisis in their lives. Some people will in-fact take unemployment and other welfare assistance to get through these tough times. Other people rely on their savings, work second jobs and have assistance for extended families during such times. For some this time in their lives will last only a few weeks. For others, they may never see good times again.
For me, this has happened four times. The first time, it took 2 months to find work again. The second time, it took 8 months. The third time, it was 2 years. And the fourth time it was 3 weeks. In my experience, it was not a function of the overall economy, but a question of how well the skills that I brought to the job market matched what was in demand. So the question is, how does one bridge that gap? Welfare payments, without any accountability on the part of those who receive them are not the answer. You can't yell, "get a job" to someone who does not have the skills that employers are looking for. To cut people off of public assistance will simply leave them begging in the streets. And you think that we have a panhandling problem now?
In my 2-year issue, for six of those months I was unemployed and living with family. That could not be a permanent situation. I took a job that paid 30% over minimum wage and worked hard at it. We had food stamps and medicaid as well and I went back to school. Eventually, after about a year and a half, the company moved me to a position that was closer to the type of work and pay that I had two years earlier. It was at that point that I no longer required public assistance. And that is where I have built my career since. I consider myself fortunate that these opportunities came my way and am grateful for them.
The problem is that most people who are life-time welfare recipients do not know how to work their way out of assistance. It is not that they do not work hard, but it is that they do not know where to turn to improve their lives. Many people still believe that once you reach a certain age, you get a job and work as hard as you can and learn to live off of what you make. Here is the problem. The poverty level in the US is at 22,350 per year. Working at minimum wage will net you 15,080 per year. It is estimated that 58% of Americans will spend at least one year of their lives earning below the poverty level.
If you are single and have no children and a room-mate or two, it is a livable level. A young married couple, with both newlyweds working at minimum wage, they are above the poverty level and doing well for themselves, until children come along. But here is how to escape poverty.
How to escape poverty...
1. Get an education. In 2010, the average starting salary for a college graduate was 48,661. Some make more and some make less out of college, but it is still better than a married couple where both are working minimum wage. It is never to late to begin to get an education, never to late to finish if you started. It is also wise to consider a community college if a four year college is out of the question. These are not degrees to nowhere, especially if you are no where now.
I am not saying that everyone needs a college degree. I am saying that everyone needs training beyond high school. If college is not for you, something else is, and you can make a good living without a degree. There are many programs at your local trade tech school that lead to a rewarding career.
2. Avoid becoming a single parent. I know that this is easier said than done, but the numbers are on your side if both partners in the marriage are working and if they stay married. Consider marriage carefully. Stay married. Wait until you are married to have children.
Now, we are all animals at heart and our basic instincts include those that reproduce our species. Therefore, people will make mistakes. Single parenthood does not have to lead to poverty. There are ways out of that trap, but they are not easy. If you know someone who is a single parent, become part of their support system and make their pathway out of poverty a bit easier.
3. Continue to explore new opportunities. Job security is a thing of the past. It used to be that the price for employee loyalty was job security, but those days are gone. Your loyalty to your employer will buy you little. You may like your boss, but the company you work for does not have the power to love you back. At any time, your shop can close it's doors, even if it is doing well. The owner of the business could retire, could sell the company. Age may make you less effective. A number of things could happen. It does not mean that you change jobs at the drop of a hat, but it is OK to consider new opportunities when they arise.
4. Live on less than what you make. Use debt carefully. Save for the future.
5. Watch for signs of impending layoffs and take action before the final shoe falls. Companies will usually take other steps to cut costs before they cut people. They do not want to lay people off, believe it or not. People are hard to replace. When the company appears to be cutting costs, it is the time to update your resume and put out feelers. Your unemployment will be shorter if you do.
6. Build and maintain a network. This is where Facebook, LinkedIn and other social media can help.
7. Maintain your health. Nothing can take you down like health problems. Take care of your body so that you can continue to earn money.
8. Keep your skills current. Often, the difference between a short layoff and a long layoff if whether or not your skills are current. Go back to school whenever possible and update your knowledge.
These steps out of poverty are not something that you will get from your welfare counselor at the state welfare office. Their job is finished once you make enough money to no longer qualify for assistance. This is where charities and your church can help you. Remember, a person who makes enough not to qualify for public assistance may still get earned income credit and at the federal level may still take away more than they give. But there is not a big bureaucracy needed to make that happen. The goal of any public assistance program should be to get a person, a family to the point where they not only no longer need assistance, but to where their tax payments are greater than the sum total of government assistance. Then we can really reduce the size of the bureaucracy that manages our great public welfare system.
Monday, October 31, 2011
Saturday, October 22, 2011
The most irresponsible quote from the 2012 primaries, yet.
The most irresponsible quote from the 2012 primary was not uttered by Reverend Jeffords, or by Bill Maher. It was uttered by a candidate. Not Michele Bauchmann or Sarah Palin. Not Mitt Romney or Jon Huntsman. It was said by Ron Paul, and I quote.
"It is no coincidence that a century of total war has coincided with a century of central banking."
If Mr. Paul is correct, we have had constant total war from October of 1911 to today. Guess my history books are wrong. First of all, how does the Honorable Ron Paul define total war? It may even be a stretch to say that we have had a century of rumors of wars. We have also not had a century of central banking.
The US Federal Reserve was established December 23, 1913. The first world war began about a year and a half later. The war was triggered when a Serbian Nationalist assassinated the heir to the throne of the Austro-Hungarian empire. Other nations joined in due to the alliances between nations and the war even spread to their colonies. First, Austria-Hungary invaded Serbia, then Germany invaded France, then Russia invaded German and then the English got involved. The US got involved when it was discovered that Germany promised to help Mexico invade the United States and German submarine activity sank a passenger ship off the coast of Ireland. But if you are a student of History, you know all of that.
The formation of the Fed happened in response to the panic of 1907. There was doubts about the liquidity of bank assets after the stock market lost 50% of it's value from the previous year. There were many runs on banks and trusts. A further recession was halted when banker JP Morgan pledged much of his own money to shore up his bank and encouraged his follow bankers to do the same. After this, Congress decided that a central bank was needed to ensure this type of panic did not happen in the future.
Of course there were the problems that led to the Great Depression and the Fed has failed to prevent other problems. In some cases, such as the era of stag-flation in the late 1970's and early 1980's, monetary policy may have made problems worse than better...by fighting energy-cost inflation with higher interest rates.
The cause of our latest recession was not really the Fed, but a lack of oversight by the Central Bank. It was assumed by a lot of people that real estate prices would continue to rise, and hence backing up securities with mortgages seemed like a good idea. As we know, it was not. The bottom fell out of the real estate market and all of America and the world has been paying the price. We have over-reacted to this problem and are not over-regulating and freezing business in it's track. But that is not the fault of the Fed or any central bank. These laws and regulations come from Congress.
But it is an irresponsible stretch to blame the wars that followed World War I on central banks. It is also irresponsible to state that we have experienced a century of total war, because we have not. After World War I, we tried to get involved in the Russian Civil War, but America did not have the stomach for it. As a result, Lenin and Stalin were able to hold on in Russia and organize the Soviet Union. That war was the longest off-shoot of World War I. It ended in 1923. The Russian Civil war was not started by a central bank, but began when Tsar Nicholas II abdicated. His problem was not just a consolidation of banking power, but of all government power. He was an autocrat who could not delegate power.
The world was at relative peace until the Chinese Civil War which began in 1927. The Japanese got involved in 1937 and the two parties united to defeat Japan. This war bled into the Second World War. The Chinese Civil war ended in 1949. The official Second World War began when Germany invaded Poland in 1939. Japan Bombed Pearl Harbor in 1941 bringing in US involvement. After Japan surrendered in 1945, the Chinese began fighting each other again. This war ended in 1949 or 1950 when two Chinas formed. The People's Republic of China, or Red China or Mainland China and Taiwan or the Republic of China. No central bank was responsible for the Chinese Civil War, the second Siano-Japanese War or the Second World War.
Another major war during this time frame was the Spanish Civil war. This was a conflict between Nationalist Spain, led by Franco and Republican Spain, led by the Government that succeeded the Government that came to power with the abdication of another ruler. The Spanish Central Bank used gold reserves to pay the Soviet Union for weapons used by the Republicans during the conflict. So banking was involved, but not a cause of the war. No central bank, and the Spanish Nationalist coup would have won years earlier and lives could have been spared...is the argument that some would have used. But all wars can be ended with a lack of funding.
After the Second World War, the Cold War began. This lasted from 1946 to 1990. It ended when the United States Military outspent the Soviet Union. There were two warm offshoots of the Cold War. The Korean conflict from 1950 to 1953. The war in Vietnam began in 1955 and ended in 1975. The United States was involved in Vietnam from 1961 to 1973. If there is hard evidence that the Fed could have exacerbated US involvement in these any wars, I would really like to see it.
After the end of the cold war, there was the Persian Gulf Conflict that began when Iraq invaded Kuwait in 1990. That was really continued when the US invaded Iraq again in 2002 and will end later this year. But, there was not a lot of action in that conflicts from April of 1991 to 2002. It was probably not banking that caused or allowed these wars to take place. Mr. Paul's argument is that without the Central Bank, it would have been more difficult for Congress to authorize these actions. But that is again a weak argument. The US got involved in Afghanistan after the Twin Tower Bombings of 2001.
There have been about 100 minor conflicts around the globe since World War I, the US has been involved directly or indirectly in many of them, but they do not count as total war.
Total war in the past century can be enveloped within these conflicts.
1914-1918--First World War
1917-1923--Russian Civil War
1927-1950--Chinese Civil War (Second Siano-Japanese War, Second World War)
1946-1990--Cold War (Korean War, Vietnam War, etc)
1990-1991--First Persian Gulf War
2001-Present--US/Afghanistan War (The War on Terror...Second US/Iraq War)
Which of these wars could have ended sooner without the involvement of central banking systems?
We have had relative world peace during these eras...
1898-1914--Between Spanish/American War and outbreak of World War I
(US involvement in WWI began in 1917 and ended in 1918)
1923-1927--Between the end of the Russian Civil war and the beginning of the Chinese Civil war
(US involvement in WWII began in 1941)
1945-1946--End of World War II to the beginning of the Cold War
1990-1991--End of the Cold War to the Invasion of Kuwait
1991-2001--Cease fire in Iraq to the bombing of the Twin Towers in New York
In the last 100 years we have had 81 years of war and 19 years of relative peace in the world. The United States has had 59 years of war and 41 years of relative peace.
"It is no coincidence that a century of total war has coincided with a century of central banking."
If Mr. Paul is correct, we have had constant total war from October of 1911 to today. Guess my history books are wrong. First of all, how does the Honorable Ron Paul define total war? It may even be a stretch to say that we have had a century of rumors of wars. We have also not had a century of central banking.
The US Federal Reserve was established December 23, 1913. The first world war began about a year and a half later. The war was triggered when a Serbian Nationalist assassinated the heir to the throne of the Austro-Hungarian empire. Other nations joined in due to the alliances between nations and the war even spread to their colonies. First, Austria-Hungary invaded Serbia, then Germany invaded France, then Russia invaded German and then the English got involved. The US got involved when it was discovered that Germany promised to help Mexico invade the United States and German submarine activity sank a passenger ship off the coast of Ireland. But if you are a student of History, you know all of that.
The formation of the Fed happened in response to the panic of 1907. There was doubts about the liquidity of bank assets after the stock market lost 50% of it's value from the previous year. There were many runs on banks and trusts. A further recession was halted when banker JP Morgan pledged much of his own money to shore up his bank and encouraged his follow bankers to do the same. After this, Congress decided that a central bank was needed to ensure this type of panic did not happen in the future.
Of course there were the problems that led to the Great Depression and the Fed has failed to prevent other problems. In some cases, such as the era of stag-flation in the late 1970's and early 1980's, monetary policy may have made problems worse than better...by fighting energy-cost inflation with higher interest rates.
The cause of our latest recession was not really the Fed, but a lack of oversight by the Central Bank. It was assumed by a lot of people that real estate prices would continue to rise, and hence backing up securities with mortgages seemed like a good idea. As we know, it was not. The bottom fell out of the real estate market and all of America and the world has been paying the price. We have over-reacted to this problem and are not over-regulating and freezing business in it's track. But that is not the fault of the Fed or any central bank. These laws and regulations come from Congress.
But it is an irresponsible stretch to blame the wars that followed World War I on central banks. It is also irresponsible to state that we have experienced a century of total war, because we have not. After World War I, we tried to get involved in the Russian Civil War, but America did not have the stomach for it. As a result, Lenin and Stalin were able to hold on in Russia and organize the Soviet Union. That war was the longest off-shoot of World War I. It ended in 1923. The Russian Civil war was not started by a central bank, but began when Tsar Nicholas II abdicated. His problem was not just a consolidation of banking power, but of all government power. He was an autocrat who could not delegate power.
The world was at relative peace until the Chinese Civil War which began in 1927. The Japanese got involved in 1937 and the two parties united to defeat Japan. This war bled into the Second World War. The Chinese Civil war ended in 1949. The official Second World War began when Germany invaded Poland in 1939. Japan Bombed Pearl Harbor in 1941 bringing in US involvement. After Japan surrendered in 1945, the Chinese began fighting each other again. This war ended in 1949 or 1950 when two Chinas formed. The People's Republic of China, or Red China or Mainland China and Taiwan or the Republic of China. No central bank was responsible for the Chinese Civil War, the second Siano-Japanese War or the Second World War.
Another major war during this time frame was the Spanish Civil war. This was a conflict between Nationalist Spain, led by Franco and Republican Spain, led by the Government that succeeded the Government that came to power with the abdication of another ruler. The Spanish Central Bank used gold reserves to pay the Soviet Union for weapons used by the Republicans during the conflict. So banking was involved, but not a cause of the war. No central bank, and the Spanish Nationalist coup would have won years earlier and lives could have been spared...is the argument that some would have used. But all wars can be ended with a lack of funding.
After the Second World War, the Cold War began. This lasted from 1946 to 1990. It ended when the United States Military outspent the Soviet Union. There were two warm offshoots of the Cold War. The Korean conflict from 1950 to 1953. The war in Vietnam began in 1955 and ended in 1975. The United States was involved in Vietnam from 1961 to 1973. If there is hard evidence that the Fed could have exacerbated US involvement in these any wars, I would really like to see it.
After the end of the cold war, there was the Persian Gulf Conflict that began when Iraq invaded Kuwait in 1990. That was really continued when the US invaded Iraq again in 2002 and will end later this year. But, there was not a lot of action in that conflicts from April of 1991 to 2002. It was probably not banking that caused or allowed these wars to take place. Mr. Paul's argument is that without the Central Bank, it would have been more difficult for Congress to authorize these actions. But that is again a weak argument. The US got involved in Afghanistan after the Twin Tower Bombings of 2001.
There have been about 100 minor conflicts around the globe since World War I, the US has been involved directly or indirectly in many of them, but they do not count as total war.
Total war in the past century can be enveloped within these conflicts.
1914-1918--First World War
1917-1923--Russian Civil War
1927-1950--Chinese Civil War (Second Siano-Japanese War, Second World War)
1946-1990--Cold War (Korean War, Vietnam War, etc)
1990-1991--First Persian Gulf War
2001-Present--US/Afghanistan War (The War on Terror...Second US/Iraq War)
Which of these wars could have ended sooner without the involvement of central banking systems?
We have had relative world peace during these eras...
1898-1914--Between Spanish/American War and outbreak of World War I
(US involvement in WWI began in 1917 and ended in 1918)
1923-1927--Between the end of the Russian Civil war and the beginning of the Chinese Civil war
(US involvement in WWII began in 1941)
1945-1946--End of World War II to the beginning of the Cold War
1990-1991--End of the Cold War to the Invasion of Kuwait
1991-2001--Cease fire in Iraq to the bombing of the Twin Towers in New York
In the last 100 years we have had 81 years of war and 19 years of relative peace in the world. The United States has had 59 years of war and 41 years of relative peace.
Friday, October 7, 2011
The Occupiers and their protests
In cities all over America, the occupiers are camping out to protest corporate greed in America. The target of their protests are not the men and women who sit in America's boardrooms. They are gunning for political change. It is their belief that there is more than enough money in corporate America to give European-style benefits to Americans and put all out of work Americans to work.
I myself an a victim of corporate greed. I lost my job back in July. The company we worked with chose another vendor based in India. Fortunately, 5 weeks later I was back at work. Because of the severance package I received, I never collected any unemployment. I realize that I was fortunate. I empathize with those who have been unemployed for a long time. I have high hopes that we can get most of America back to work and soon.
The reason why my unemployment was so short this time is because the skills that I possess as a network security engineer are in demand right now. I was able to find a position that I am a good fit for. I had a referral from a friend, and I am grateful for it. If it was not for these two factors, I would be collecting unemployment and likely living with my folks.
But I would not be protesting with the occupiers. The methods they employ will not gain the attention of corporate America. They will still dive past all of the occupiers while riding in the back seats of their limousines and the only reason that they will even know they are there is that they are mentioned in the papers. If you can not find a way to affect the bottom line of a company, you will never get their attention.
Never!
Here is the funny thing...the campers had to purchase the equipment that they are using from someone. Some corporate pig somewhere is lighting his cigar right now with the dollar profit made from the sleeping bag that some occupier slept in last night.
The way to get the attention of the Corporate hot dogs is to reduce the number of dollar bills that they stuff in their mattress every night. A boycott is better than a protest. Here is what the occupiers should do instead.
1. Sell your car and use public transportation. If you absolutely need a car, purchase one with the money in your savings account and do not borrow to pay for it.
2. Make your food, clothing and other purchases from locally-owned businesses. And purchase store-brand or white label products. If none are available, then purchase the brand name you least recognize.
3. Do not eat out or even buy pre-packaged meals. As much as you possibly can, make meals from scratch, including breakfast.
4. Live all-cash. Do not go into debt for anything.
5. Use a credit union instead of a bank.
6. Finally, use a small internet provider and VOIP for your phone.
Doing these steps will take your cash from the big companies to smaller companies. Corporate America does not care what you vote for in the ballot box, nor do they care about protesters. When people vote with their wallets, their hard-earned cash and their feet, they listen.
If you really want to punish the evil corporations....move out of the city, buy a farm and become completely self reliant. Grow your own food and your own fuel and make your own clothes.
In the long run, the occupiers and their protests are about people venting their anger and frustration. They are also about exercising their constitutional rights to peaceably assemble and to have a redress of their grievances. I am all for peaceful assembly and thing that everyone has the right to be heard. But this is not the right way to get corporate America to listen. And if this does turn into rioting, then those responsible will get what is coming to them and what they deserve.
I myself an a victim of corporate greed. I lost my job back in July. The company we worked with chose another vendor based in India. Fortunately, 5 weeks later I was back at work. Because of the severance package I received, I never collected any unemployment. I realize that I was fortunate. I empathize with those who have been unemployed for a long time. I have high hopes that we can get most of America back to work and soon.
The reason why my unemployment was so short this time is because the skills that I possess as a network security engineer are in demand right now. I was able to find a position that I am a good fit for. I had a referral from a friend, and I am grateful for it. If it was not for these two factors, I would be collecting unemployment and likely living with my folks.
But I would not be protesting with the occupiers. The methods they employ will not gain the attention of corporate America. They will still dive past all of the occupiers while riding in the back seats of their limousines and the only reason that they will even know they are there is that they are mentioned in the papers. If you can not find a way to affect the bottom line of a company, you will never get their attention.
Never!
Here is the funny thing...the campers had to purchase the equipment that they are using from someone. Some corporate pig somewhere is lighting his cigar right now with the dollar profit made from the sleeping bag that some occupier slept in last night.
The way to get the attention of the Corporate hot dogs is to reduce the number of dollar bills that they stuff in their mattress every night. A boycott is better than a protest. Here is what the occupiers should do instead.
1. Sell your car and use public transportation. If you absolutely need a car, purchase one with the money in your savings account and do not borrow to pay for it.
2. Make your food, clothing and other purchases from locally-owned businesses. And purchase store-brand or white label products. If none are available, then purchase the brand name you least recognize.
3. Do not eat out or even buy pre-packaged meals. As much as you possibly can, make meals from scratch, including breakfast.
4. Live all-cash. Do not go into debt for anything.
5. Use a credit union instead of a bank.
6. Finally, use a small internet provider and VOIP for your phone.
Doing these steps will take your cash from the big companies to smaller companies. Corporate America does not care what you vote for in the ballot box, nor do they care about protesters. When people vote with their wallets, their hard-earned cash and their feet, they listen.
If you really want to punish the evil corporations....move out of the city, buy a farm and become completely self reliant. Grow your own food and your own fuel and make your own clothes.
In the long run, the occupiers and their protests are about people venting their anger and frustration. They are also about exercising their constitutional rights to peaceably assemble and to have a redress of their grievances. I am all for peaceful assembly and thing that everyone has the right to be heard. But this is not the right way to get corporate America to listen. And if this does turn into rioting, then those responsible will get what is coming to them and what they deserve.
Wednesday, October 5, 2011
The messieness of the congressional redistricting process.
The Utah Legislature adjourned their special session for two weeks without settling on congressional district boundaries. This is unfortunate. It shows that the plan which was forwarded by the redistricting committee was a bad plan. I have problems with it. Let me list a few.
1. District boundaries should not be set to protect seats are to remove a representative out of office.
2. The plan forwarded by the committee was a one issue plan...public lands. That ignores many of the other reasons we send representatives to Washington.
3. Salt Lake County has such a high percentage of Utah's population, that we can not hope to avoid splitting it. But we should not split cities. There is no reason to split a county other than Salt Lake County.
4. To meet the needs of rural Utah, most of Utah's rural counties be in just one district. The donut-hole plan comes closest to this. Utah is so urbanized that it is impossible to create a rural district.
5. Most of the liberals in the state are in northern Salt Lake County. It would be difficult to create one liberal district. No matter what you did, there were still be enough moderates and conservatives to trump the vote. Jim Matheson appears to be moderate enough to win over middle-thinking voters, but what happens when he decides not to run again? If I was a liberal, I would want the best chance to win in all four districts, not have one carved out for me. If you carve out one liberal district, the other three are bound to be so conservative that you do not have a prayer at winning them. Remember when Utah had 2 democratic congressmen?
1. District boundaries should not be set to protect seats are to remove a representative out of office.
2. The plan forwarded by the committee was a one issue plan...public lands. That ignores many of the other reasons we send representatives to Washington.
3. Salt Lake County has such a high percentage of Utah's population, that we can not hope to avoid splitting it. But we should not split cities. There is no reason to split a county other than Salt Lake County.
4. To meet the needs of rural Utah, most of Utah's rural counties be in just one district. The donut-hole plan comes closest to this. Utah is so urbanized that it is impossible to create a rural district.
5. Most of the liberals in the state are in northern Salt Lake County. It would be difficult to create one liberal district. No matter what you did, there were still be enough moderates and conservatives to trump the vote. Jim Matheson appears to be moderate enough to win over middle-thinking voters, but what happens when he decides not to run again? If I was a liberal, I would want the best chance to win in all four districts, not have one carved out for me. If you carve out one liberal district, the other three are bound to be so conservative that you do not have a prayer at winning them. Remember when Utah had 2 democratic congressmen?
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