Wisconsin, Simple Math, Simpleton Politicians

As most of you probably know by now, there have been some rather large demonstrations going on in Madison, Wisconsin by public employee union members who are upset that the new Republican governor and legislature are about to pass a bill that would eliminate collective bargaining for certain public employee unions and require union members to contribute to their pension and medical benefit costs. The reason for this legislative action is that the state is faced with a looming budget deficit of $3.6 billion and the Republican lawmakers believe that this is only way to effectively close that deficit.

Now, I was struck by the idiocy of a lawmaker who was supporting the protesters on the news by saying that that wealthy in Wisconsin should be taxed more and that the unions should not be required to do any givebacks to save the financial solvency of the state. That got me to doing a little math to see if the math was simple in this case or the politician was simple:

• To support a previous post in this blog I went and found out how many Americans earn how much money as reported to the IRS. Thus, these are official Federal government numbers, they are not Fox News numbers, Tea Party numbers, Republican numbers. These are 2008 final, official IRS numbers, the last year which this data was available to this detail
• I also checked out the results of the 2010 Census which showed that Wisconsin was home to 1.82% of the nation's population.
• For 2008 IRS filings, 321,294 households nationwide earned over as million dollars. If you assume that the number of millionaires are spread throughout the country in the same proportion as the population, then we would expect Wisconsin to have about 5,847 millionaire earners in the state, 1.82% of 321,294.
• If this lawmaker wanted the "rich' to pick up the state budget shortfall, then each of those 5,847 state residents would have to pay a whopping $615,700 to eliminate the shortfall ($3.6 billion divided by 5,847 people).
• I would venture a guess that there are even fewer millionaire earners in Wisconsin than the 5,847 estimate above, making the budget reduction burden for Wisconsin millionaire earners even greater. Other, richer  states (New York, California, Texas, New Jersey) probably have more millionaire earners relative to their population than Wisconsin.
• If you ever did such an insane move you can be sure that shortly afterward there would be no millionaires living in Wisconsin.
• Since we know that the average American household spends almost 30% of its annual income on income taxes, sales taxes, Social Security taxes, Medicare taxes, property taxes, gasoline taxes, excise taxes, etc., and Wisconsin is already one of the most heavily taxed states, many of these Wisconsin millionaires would not be able to pay their $615,700 share since after taking more than 30% of their earnings via other taxes and paying for food and other basic necessities, they would not have enough left over to cover their $615,700.

Simple math, simpleton politicians. The government debt burden has gotten so high in this country that even if you confiscate all of the earnings from the richer Wisconsin families, you still might not be able to cover the budget shortfall. Does not the political class understand this simple math fact of reality? You can no longer tax the rich to pay off the bad financial management of the simpleton politicians.

Last year we did a similar analysis for the national debt. Fortune magazine annually publishes its list of the richest Americans along with an estimate of their worth. If you added up the richest 400 Americans from their last analysis, you found that their total net worth was about $2.7 TRILLION. Thus, if you confiscated all that these richest Americans owned, (bonds, cash, boats, houses, cars, furs, property), you would not come close to paying down just the deficit that Obama, Reid, and Pelosi rang up over the past four years. You cannot tax the rich enough, even if you take all that they own, to cover the shortfall. Simple math, simpleton politicians.

Want more examples? Last year, my home state of New Jersey was looking at a state government expense stream of about $30 billion and a revenue stream of about $20 billion, leaving a budget shortfall of about $10 billion. What were half of the New Jersey political class worried about? Was it the $10 billion? No, it was the fact that the governor refused to raise the income tax on the highest earners in the state by 2%.

By the outcries from the state employee unions and the state Democrats, you would have thought that this single action was responsible for the $10 billion shortfall. However, if you did the math, you would have found that raising the income tax 2% for that small percentage of earners would have raised far less than $1 billion, still leaving the state more than NINE billion dollars short. Rather than attack the underlying root causes of the problem, the politicians were intent on arguing and politicking over a nit that would not have made any significant difference in the overall crisis. Simple math, simpleton politicians.

That is what is so disconcerting about the Federal government's skyrocketing national debt. It seems most of the political class do not understand simple, logical math and the simple reality that goes along with it. And even the small percentage of politicians that might get the simple math, they are too busy continually running for office to make a stand for sanity. Let's review the looming financial crisis at the Federal level once again for the simpletons in D.C., I will try to speak s...l...o...w...l...y:

1. We are about to hit a national debt level of $14 TRILLION.
2. With about 115 million households in the country, that comes out to a debt burden of about $122,000 per household.
3. In the best of all economic worlds, if Obama has his way, his budgets will add another $7 TRILLION to the national debt in the next ten years, making the household burden in excess of $182,000. This debt will eventually have to be paid off by us and FUTURE generations of Americans, our kids and our grandkids.
4. Very soon, within the next few years, American taxpayers will pay more on interest on the Federal debt than they do on all other discretionary areas of the Federal budget combined, meaning less money for transportation, education, etc.
5. By paying so much to cover the national debt, Americans will be less free to spend their earnings on things they want such as charities, better schooling for their kids, their own businesses, and their own lives, resulting in a sustained and deep loss of freedom.
6. Speaking of freedom, the Chinese now own almost $1 TRILLION worth of our debt, restricting our freedom in the international arena, i.e. do not tick off one of your largest bond holders regardless of what compromises you have to make on human rights.
7. Smart Americans from across the political spectrum recognize and understand the problem and most have come up with ways to eliminate the problem, with the one exception being the American political class. These partisan and bipartisan Americans include, but are not limited to, the Cato Institute, Obama's own debt reduction comimission, the Concord Coalition, the National Taxpayers Union and the U.S. Public Interest Research Group.

Simple math, simpleton politicians. Simply a travesty. 




Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment