When The Debt Bubble Bursts Nothng Else Matters, Part 2

Americans are worried and upset about a lot of issues these days. Politicians, lousy job opportunities, stagnant household income growth, who is allowed in what bathrooms, terrorism, high taxes, bad schools, crumbling infrastructure, etc. But all of these issues, while seemingly important, are trivial vs. the only big issue that matters: a Federal government (and many local and state governments) that is hurtling towards fiscal disaster and insolvency. 

If and when the fiscal integrity of the United States crumbles, and that possibility grows larger and larger every day, no one is going to care what the local bathroom policy is, why little Johnny is not getting educated, etc. because it will be a matter of basic survival in a collapsed economy that is the only concern.

Given that the Obama administration and legacy has almost doubled the national Federal debt from about $10 TRILLION to almost $20 TRILLION, this is the current Federal debt burden in the United States:

• Debt per household - just under $159,000
• Debt per every man, woman and child - abut $62,500
• In other words to wipe out just the Federal government debt, every household, on average, would have to write a check for about $159,000. 
• Every person, including kids and infants.would have to pony up about $62,500 to wipe out just the Federal government debt. 
• A family of four would have to write a check for about a quarter of a million dollars.

Given that we have previously written on studies that show over 40% of Americans would have a hardship paying off an unexpected household expense of $400, it is obvious that American households and individuals cannot pay out $159,000 or $62,500 to help bail out the incredibly deep spending hole that Washington has dug.

Now, some liberal readers I know are thinking, tax the rich, let them pay off the debt. Let me give one example why that is such an ignorant thing to say. Bill Gates has a net worth of $86.4 billion as of February 24, 2017 according to Forbes. 

For this example, rather than just raise Mr. Gates taxes on his annual income, let’s confiscate everything he owns, liquidate his assets, and apply that $86.4 billion to the national debt. In this case, his entire fortune would pay off .4% of the current national debt. Not 4%, only .4%. Since we are not going to confiscate his entire fortune, just having a higher tax on his income, in reality not even this paltry .4% would ever be attained.

Let’s take this theoretical example one step further. Since the government spends about $10.4 billion a DAY, Bill Gates entire fortune would operate the Federal government for a little over eight days, just over a week, never mind paying off a $20 TRILLION national debt.

Yesterday, we took this national debt theme deeper into analysis with other terrifying economic and fiscal numbers. Today, let’s look at some other government debt situations at the local and state government levels since the debt burden on Americans is not just the $20 TRILLION at the Federal level. Politicians across the country have gotten us even more debt holes, holes that are already causing government financial crises and bankruptcies. 

Many of these local and state debt situations have already been discussed here but we will repeat them, along with new debt crises,  to show the more complete picture of how bad things are:

• The city of Detroit has already declared bankruptcy because of the mismanagement of that city’s finances over the past several decades.
• The debt and financial situation is so bad in Illinois and the political class there is so dysfunctional that the state government has been unable to payout the winnings to citizens who played the state lottery and were winners, causing them to file lawsuits to force the state to pay what they won. However, the state continues to sell lottery tickets even though it knows that it currently cannot pay the winners.
• In fact, Illinois is in such overall bad financial shape that in 2011, the state government doubled both the personal and corporate income tax rates to try and fill in the debt hole they they themselves had dug. 
• But that backfired when employers and businesses left the state to get away from the onerous tax increases which reduced the business tax base and which increased unemployment which reduced the personal income tax base.
• And since then things there debt-wise have not gotten any better as state comptroller Leslie Munger told the Chicago Business publication and Illinois politicians earlier this month: “…the state increasingly is doing what a cash-strapped family would do: letting the bills pile up. We can’t go bankrupt and we can’t print money. Taxpayers are going to have to pay this bill.”
• Which means that the state will have to again hit up taxpayers, personal and corporate, with even higher rates which will cause more businesses to leave the state and cause more unemployment, both of which will decrease the tax base and the debt death spiral is now fully underway.
• In addition to Detroit, Stockton, California has already had to declare bankruptcy and go to court to get relief from their financial obligations.
• Scranton, Pennsylvania is teetering on the brink of bankruptcy.
• Richmond, California is likely the next California city to go belly up financially, having already cut city jobs, reduced street repairs, and closed libraries: ”Richmond has cut about 200 jobs — roughly 20 percent of its workforce — since 2008. Its credit rating is at junk status. And in November, voters rejected a tax increase that city leaders had hoped would help close a chronic budget deficit. I don’t think there’s any chance we can avoid it,” said former City Councilman Vinay Pimplé, referring to bankruptcy. 
• One possible contributing factor to the mess in Richmond is that the politicians have been focusing on and touting efforts and accomplishments that have nothing to do with running a fiscally sound city, as illustrated by quotes from former Mayor and current Council member Gayle McLaughlin’s page on the city’s website: “Gayle’s focus on environmental justice led the city to move forward as a leader on many environmental initiatives….Thanks to her efforts advancing solar installation, Richmond was noted as leading the Bay Area for solar installed per capita…Richmond also received countless awards for its model green job training program…”, all of which means nothing if the city goes bankrupt.
• I do not think that the citizens of Richmond really care much about McLaughlin’s prideful “green” achievements and priorities if their libraries are closed, their roads are falling apart, and the city is bankrupt.

Many states (e.g. Hawaii, New Jersey, California) are also in deep financial troubles as are other cities, (e.g. Chicago). The debt problem in this country is not just the $20 TRILLION national debt. It is the trillions more in debt that local and state politicians have caused. So as we said yesterday, other issues that you may think are important really do not matter because when the government debt bubbles across this country burst, those other issues will pale in comparison.

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:

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.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

When The National Debt Bubble Bursts Nothing Else Matters, Part 1

Americans are worried and upset about a lot of issues these days. Politicians, lousy job opportunities, stagnant household income growth, who is allowed in what bathrooms, terrorism, high taxes, bad schools, crumbling infrastructure, etc. But all of these issues, while seemingly important, are trivial vs. the only big issue that matters: a Federal government (and many local and state governments) that is hurtling towards fiscal disaster and insolvency. 

If and when the fiscal integrity of the United States crumbles, and that possibility grows larger and larger every day, no one is going to care what the local bathroom policy is, why little Johnny is not getting educated, etc. because it will be a matter of basic survival in a collapsed economy that is the only concern.

Given that the Obama administration and legacy has almost doubled the national Federal debt from about $10 TRILLION to almost $20 TRILLION, this is the current Federal debt burden in the United States:

• Debt per household - just under $159,000
• Debt per every man, woman and child - abut $62,500
• In other words to wipe out just the Federal government debt, every household, on average, would have to write a check for about $159,000. 
• Every person, including kids and infants, would have to pony up about $62,500 to wipe out just the Federal government debt. 
• A family of four would have to write a check for about a quarter of a million dollars.

Given that we have previously written on studies that show over 40% of American households would have a hardship paying off an unexpected household expense of $400, it is obvious that American households and individuals cannot pay out $159,000 or $62,500 to help bail out the incredibly deep spending hole that Washington has dug.

Now, some liberal readers I know are thinking, tax the rich, let them pay off the debt. Let me give one example why that is such an ignorant thing to say. Bill Gates has a net worth of $86.4 billion as of February 24, 2017 according to Forbes. 

For this example, rather than just raise Mr. Gates taxes on his annual income, let’s confiscate everything he owns, liquidate his assets, and apply that $86.4 billion to the national debt. In this case, his entire fortune would pay off .4% of the current national debt. Not 4%, only .4%. Since we are not going to confiscate his entire fortune, just having a higher tax on his income, in reality not even this paltry .4% would ever be attained by "taxing the rich."

Let’s take this theoretical example one step further. Since the government spends about $10.4 billion a DAY, Bill Gates entire fortune would operate the Federal government for a little over eight days, just over a week, never mind paying off a $20 TRILLION national debt.

Hopefully these examples, numbers and realities give you an idea of how bad the debt and fiscal situation is in this country. But if you want to be scared even more, consider some debt realities in an article written by Peter Suderman in the April, 2017 issue of Reason magazine (and some simple population and household calculations we added):

• Within 10 years, on the current spending and budget path of the Federal government, the Federal government debt will increase by about 64%.
• Last year the interest on the debt was $241 billion or about $1,900 for every U.S. household.
• This is $1,900 that cannot be spent on a new car, vacations, movie tickets, dinner out, and other healthy economic activities to help grow the economy.
• This is $1,900 that cannot be spent on better schools, fixing crumbling infrastructure, or helping the less fortunate. 
• Interest payments on the debt, under Federal government current spending paths, will grow 196% in the next ten years, the fastest growing component of the Federal budget.
• This growth translates to an annual interest payments of $712 billion a year in ten years, up from $241 billion in 2016. 
• This $712 billion translates to a debt burden of about $5,600 a year per household.
• And this assumes that interest rates do not jump higher than expected since every percentage point above the current government projections would add another $1.5 TRILLION in debt.

A number of things to take away from all of these numbers:

• The Federal government debt hole is gigantic and getting deeper every day by the out of control spending by the Washington political class.
• Taxes diverted to pay for debt is wealth that cannot be spent by those that earned it or by government to fix what needs to be fixed in this country, it is a dead weight expense.
• You cannot come close to paying off this debt by increasing everyone’s taxes since that amount of wealth that would need to be taxed to pay off the debt simply does not exist.
• You cannot come close to paying for this debt by taxing the rich, only significant drops in government spending can help tame the debt burden.
• And the situation could get worse if interest rates go higher than expected.

One more debt fact to scare you. A recent Businessweek blurb announced that the entire net worth of every company, in the the S&P 500 stock index, if added together would be just over $20 TRILLION. In other words, the Federal government national debt is now roughly equivalent to the TOTAL worth of the 500 companies listed in the index. If this does not say government is out of control, nothing does.

So as the political class divides us up and pits citizen against citizen on a whole slew of issues, they continue to spend like there is no debt crisis at all. But when the debt bubble bursts, when your savings and assets crash, when your Social Security and Medicare benefits are slashed or evaporate, and possibly the need to survive and eat is a day to day struggle (see current day Venezuela), who uses what bathroom, why is Johnny not getting educated and other issues will become unimportant and trivial. 

This whole mess reminds me of an old Peanuts Sunday comic from long ago. Snoopy goes out for a jog on a very cold morning and before you know it every part of his body is complaining. His knees hurt and complain, his feet hurt and complain, his ears are getting frost bite and complain, his stomach is hungry and complains when his brain questions why they are out jogging on a cold day when all of the body parts are complaining and do not want to be out. 

At which part the heart speaks up and says the reason they are out jogging on a cold morning is to keep the heart healthy because if the heart goes, everything else is secondary. When the ever inflating debt bursts, everything else is secondary.

Tomorrow, to add to the horror, we will discuss bad situation at the local and state government level.

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:

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.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

July, 2016, Part 2, Political Class Insanity: A Four Year Old On the No-Fly LIst, a TRILLION Dollar Plane, A Mountain of Debt, and More

It is the beginning of another month which means it is time again to review the latest political class insanity from the American political class. Each month it takes us multiple posts to cover the wasteful spending, incompetent government organizations and employees, government programs that usually make a problem worse than resolving it, inane and idiotic politician comments, etc. In fact, last month we set a record, needing ten full posts to cover it all.

To review past posts on this insanity and idiocy, just click on the first few posts in each month listed to the right of this page. After reviewing just a handful of these insanity posts we think you will agree that we are currently being served by the worst set of American politicians ever to hold office in our entire history.

It looks like our politicians have been especially insane over the past month or so let’s get started with the latest insanity from today’s American politicians:

1) Reason magazine is a great magazine if you treasure freedom. The first several pieces of insanity today come from recent issues of Reason starting with a gun control related piece. A lot of Democrats, liberals and Obama are all hot to trot again for more gun control after the Orlando night club terrorist shooting. One of their inane ideas is to make it illegal/impossible for someone on the Federal government’s “no-fly” list to legally buy a weapon.

Now, a lot of people are against this rule for a number of very rational reasons. First, there has never been an incident where someone on the no-fly list purchased a weapon legally and went on a rampage. Thus, this is a solution looking for a problem. Second, just because someone is on the no-fly list in the future, who wants to go on a terrorist rampage, does not mean he could not purchase a weapon illegally. Criminals and drug cartels are more than happy to sell weapons and make a profit doing so regardless of what the no-fly regulations are.

But the best reason not to adopt this proposal is the serious flaws in the no-fly list itself. It is almost impossible to get off the list once you are placed on it and it is unclear what the procedures and processes are for putting someone on the list. In theory, once this idea was law, Obama could put everyone on the list and accomplish his goal of shredding the Second Amendment. 

Don’t believe me that this list is a farce? Consider the plight of a four year American boy from Alameda, California. For the court records he is referred to as “Baby Doe.” He is one of many Americans who have gone to court to get their names off of the no-fly list. Baby Doe is a prime example because he is, get this, four years old, and he has been on the no-fly list since he was seven months old. Thus, for over three years his family has been trying to get him off the list since, obviously, he is not a terrorist but have not been successful. 

Thus, the Federal government interviewed and tracked the Orlando night club terror shooter at least twice before he shot up the night club and came up with nothing and let him go on with his life but they place a four year old toddler on the terrorist no-fly list. We are doomed.

2) Veronique de Rugy, writing for Reason in their August, 2016 issue, pointed out one of the worst examples of Federal government spending EVER: 

• Lockheed Martin started the development of a nuclear capable jet fighter, the F-35, in 2001, 15 years ago.
• Today, in 2016, the jet is still not fully operational despite already going over its developmental budget by 100%.
• Its development is likely to cost over $1.5 TRILLION, that’s trillion with a “T” in front of it.
• However, the F-35 has turned out to be slower than an F-14 from the 1970s, has less than half the range of a 40 year old A-6 jet, its sustained turn performance is comparable to a 1960s F-4 jet, and its performance was embarrassed when it went head to head with a decades old F-16 in a mock dog fight.
• Thus, on average, every American household spent $8,600, about $570 a year for 15 years, of its own wealth to finance this single failed Federal government operation.

Well over a TRILLION dollars and really nothing to show for it. Want to bet that no one anywhere in the Federal government got fired, demoted, or reprimanded for such waste? This is what happens when you get to spend, and waste, over people’s money, there is no accountability.

3) Besides the F-35 debacle, Ms. de Rugy’s article also talked about how out of control our annual Defense Department spending is. According to her, we currently spend about $585 billion a year just on the Defense Department. This is more than the military budgets of China, Russia, Saudi Arabia, France, Britain, and India ...COMBINED. On average, this comes out to over $5,000 per U.S. household per year.

I will let you decide whether or not you are getting over $5,000 a year’s worth of value for from the Defense Department. Given how we have previously reported on how our armed forces personnel are cannibalizing existing weapons and planes and helicopters just to keep their machinery operating, I would certainly say no, we are not each getting $5,000 worth of value. Maybe it is time save money and stop stationing hundreds of thousands of U.S. troops around the world, many of whom are fighting with inferior equipment despite an annual budget of $585,000,000,000.00.

4) The same issue of Reason magazine pointed out how insanely out of control government spending has been over the years, so much so that our Federal government national debt is over $19.2 TRILLION. Some sad facts about this overwhelming pile of debt:

• On average, every American is on the hook for $59,400 worth of Federal government debt.
• You would have to confiscate and liquidate Bill Gates entire fortune and then multiply that amount by 240 times to pay off the $19.2 TRILLION, a reality that is obviously impossible.
• If the current debt was frozen at $19.2 TRILLION and then paid down by a dollar per second, it would take over 600,000 years to pay it off.
• The Federal debt is about equal to about 105% of the nation’s annual GDP, a troubling rise just in the past seven years ago since when Obama came into office the debt was only about 60% of the annual GDP.

The numbers are insanely mind boggling. What is also mind boggling, we as a society and nation have very little to show for this out of control spending. Our nation’s infrastructure is breaking down, our public schools do not educate, our military does not have enough spare parts to function at peak efficiency, our borders are not secure, etc. A lot of debt and not a lot to show for it.

5) The following instances of government out of control are from around the world but they aptly illustrate how politicians everywhere, including this country, promise roses but usually end up only delivering expensive thorns. Reason took a look back at previous Olympic games countries and cities to see what happens to these government/taxpayer funded and politician endorsed spectacles after the athletes leave town. The results are not good:

• For the Olympics in Athens, Greece went 60% over budget, it is considered by many as the precursor to the near collapse of the Greek financial markets and economy, Greece lost 70,000 jobs in the three months after the Olympics ended, and 21 of the 22 Olympic venue sites are either abandoned, in a state of disrepair, or underused.
• The Olympics in Sarajevo,Yugoslavia went over budget by 173% and the entire Olympic infrastructure was wrecked during the Bosnian War with the ski venues still littered with landmines, the podium used to award medals became useful for executing enemy combatants, and all of their Olympic venues are also in disrepair.
• The Olympics in Montreal were heralded by the city mayor at the time with the quote: “The Olympics can no more lose money than a man can have a baby.” The mayor did not realize at the time, or maybe he did, that the budget for those Olympics in 1976 would come in almost ten times higher than promised, $2.3 billion vs. $250 million, and that the debt and costs incurred to put on those Olympics in 1976 were not paid off for thirty years in 2006.

Yes, politicians are the same everywhere, either economic dunces who do not understand the realities of the world when it comes to budget or con men that lowball government expenditures fully knowing that they are bogus from the start. In either case, the taxpayer always gets stuck paying more than promised and get less than promised.

That will do it for today’s insanity: political Olympic promises that cost much more than promised, out of control debt, a TRILLION dollar jet, and a four year American toddler on the no-fly list. More original insanity tomorrow.

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:

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

July, 2015, Part 4, By The Numbers: A Hopeful Set Of Numbers Vs. Politician Induced Numbers

On a semi-regular basis, and for the past three days, we have revisited the theme "by the numbers" just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: "There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme, devastate politicians’ opinions by looking at the right numbers.

So for the past three days we have taken a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

Today, we will take a slightly different look with a set of good numbers that show good things and good numbers can happen when the government and the American political class are NOT involved in our lives. But before we do that, let’s look at just a very small set of examples of financial mismanagement of the American political class that we have previously discussed in this blog and why the less money given to politicians, the more good society reaps:

• Through mismanagement and outright criminal fraud, the Federal government wastes or is cheated out of about $200 billion a year via the Social Security, Medicare, and Medicaid programs.
• The IRS sent over 600 bogus tax refunds to the same mailing address...in Ireland.
• The U.S. Navy spent about $300 million to build two Navy ships almost to completion and then spent another $10 billion of taxpayer money to dismantle the ships before they were ever used.
• The Clinton State Department spent $40 million to build a U.S. consulate in the hinterlands of Afghanistan and then abandoned the project when they realized it could not be defended against a terrorist attack.
• The Obama Care process was recently shown to be giving out billions of dollars in tax subsidies that were not deserved. 

We could go on for a very long time with other examples of mismanagement by the political class and the government functions they operate but you get the idea. For other examples of such nonsense, just review any of our political class insanity posts that start off each month or enter the search phrase, “why no American” should pay another penny in taxes in the search box above.

Okay, we go through that set up to review a recent Forbes article that listed out which 24 people/married couples had given the most to charities in 2014. The article was based on a list compiled by the Chronicle of Philanthropy.

Bill and Melinda Gates donated the most to charity in 2014, in excess of $1.5 billion. While worth $78.7 billion, according to Forbes‘ calculations, the Gates and Warren Buffett formed the Giving Pledge in 2010, inviting other philanthropists to join them in promising to give away more than half of their fortunes during their lifetimes. So far, 128 people have joined the pledge. I would assume that some of those 128 people are also included on this 2014 Forbes list:

1. Bill Gates, At least $1.5 billion, The Bill and Melinda Gates Foundation Trust

2. Ralph C. Wilson Jr. (deceased), $1 billion (bequest), Ralph C. Wilson, Jr. Foundation

3. Ted Stanley, $652.4 million, Broad Institute and other groups

4. Jan Koum, $556 million, Silicon Valley Community Foundation

5. Sean Parker, $550 million, Sean N. Parker Foundation and Sean Parker Foundation Donor Advised Fund at Fidelity Charitable Gift Fund

6. Nicholas and Jill Woodman, $500 million, Silicon Valley Community Foundation

7. Michael Bloomberg, $462 million, Arts, education, environment, and public-health groups, and programs aimed at improving city governments around the world

8. Rachel Lambert (Bunny) Mellon (deceased), $411.3 million (bequest), Gerard B. Lambert Foundation and other groups

9. Sergey Brin, $382.8 million, Brin Wojcicki Foundation

10. Paul Allen, $298 million, Paul G. Allen Family Foundation; Allen Institute for Cell Science

11. John and Laura Arnold, $218.4 million, Laura and John Arnold Foundation and other groups

12. Pam and Pierre Omidyar, $180 million, Omidyar Network, Humanity United, Ulupono Initiative, HopeLab, and other groups

13. Larry Page, $177.3 million, Carl Victor Page Memorial Foundation

14. Marc and Lynne Benioff, $154 million, University of California at San Francisco Benioff Children’s Hospital and other groups

15.T. Denny Sanford, $150.5 million, Sanford Health Foundation, South Dakota Community Foundation and other groups

16. Kenneth Griffin, $150 million, Harvard University

17. Ernest and Evelyn Rady, $121 million, Rady Children’s Hospital of San Diego, University of California at San Diego, Rady School of Management

18. Sidney and Caroline Kimmel, $115.5 million, Sidney Kimmel Foundation

19. Connie and Steve Ballmer, $110 million, Harvard University, University of Oregon

20. Fred Eshelman, $103 million, University of North Carolina at Chapel Hill Eshelman School of Pharmacy

21. Gert Boyle (tie), $102 million, Oregon Health & Science University Foundation

21. John P. and Tashia Morgridge (tie), $102 million, University of Wisconsin at Madison, Wisconsin Technology Initiative and other groups

23. Irwin and Joan Jacobs, $101.6 million, Joan and Irwin Jacobs Fund at the Jewish Community Foundation of San Diego, University of California at San Diego Jacobs Medical Center, High Tech High Foundation and other groups

24. Herb Kohl (tie), $100 million, Greater Milwaukee Foundation

24. Dennis and Carol Troesh (tie), $100 million, Loma Linda University Health

Just these 24 top donors gave out over $8 billion to charities, universities, and worthy humanity causes in a single year. Now, ask yourself: would you rather tax these people more and have those additional taxes get into the hands of Washington politicians who have proven that they cannot run efficient social programs, that they build unnecessary Navy ships and consulate buildings, that they fraudulently send taxpayer wealth to Ireland and who knows what other locations around the world, and waste our wealth and tax dollars in thousands of other ways or would you rather keep tax rates the same, or lower, so that Americans can contribute more and directly to the humanity causes they want to support? 

The numbers make this choice a no brainer. Direct contributions directly to needy causes as we see above are far more effective than general tax contributions to the Federal government bureaucracy that shows no ability to spend efficiently or effectively.

That will do it for this month’s “by the numbers” update. Hopefully, the good numbers of today offset the depressing set of numbers from the previous three days.

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:

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

May, 2015, Part 2, Why No American Should Pay An Additional Penny In Federal Taxes

Hundreds of times we have shown in this blog how the Federal government and the Washington political class have wasted untold trillions of dollars of taxpayer wealth over the years. This has left the taxpayers nothing in return to show for their money except a whopping $18 TRILLION national debt. Many times the money was spent on one time, wasteful projects:

• The Navy built two new ships almost to completion at a cost of $300 million only to spend another $10 million to junk them immediately.
• Hillary Clinton’s State Department spent $40 million to build a U.S. consulate in the hinterlands of Afghanistan only to find out after spending the money that it had to be abandoned because it could not withstand a terrorist attack.
• The TSA purchased hundreds of millions of dollars of equipment for airport security in order to get a bigger discount but ended up not using a high percentage of the equipment anyway, leaving it stacked in a warehouse never to be seen or used.
• The National Science Foundation has spent millions and millions of dollars on such inane projects as building a video game to simulate prom week, studying when dog became man’s best friend, determining of dating sites were racist and other equally useless projects.

But many of these one time wastes of money pale in comparison to the money that is consistently wasted in the same manner year in and year out:

• Medicare and Medicaid lose upwards of $100 billion every year due to inefficiencies and outright criminal fraud.
• Social Security loses upwards of $100 billion every year due to inefficiencies and outright criminal fraud.
• Other welfare programs such as Federal housing support and food assistance lose billions and billions of dollars every year due to inefficiencies and outright criminal fraud.
• The IRS loses billions of dollars every year to identity theft in the income tax filing system every year.
• The IRS is so inept that it admits that it fails to collect almost $400 billion a year from tax evaders.
• The President’s debt reduction commission easily identified $100 billion a year that could be removed from the Pentagon’s annual budget without endangering national security.

Thus, it is pretty obvious that no American, no matter how rich or poor, should [pay a penny more in taxes given that the Federal government and the Washington politicians that operate it easily waste or fail to collect a whopping $800 billion or so EVERY YEAR.

But this reality is apparently lost on a Georgia Congressman. 

Hank Johnson recently stated that when it comes to taxes, “we [Washington politicians] don’t have enough [taxes] to do what the government - and do what the country needs the government to do and that’s the problem.”

The Congressman went on: “If everyone is paying their fair share of taxes than we certainly should and can live within our means. But our problem now is that taxes are being paid by the middle class. The rich, the wealthy and the corporations are not paying their fair share and so therefore we don’t have enough to do what the government and do what the country needs the government to do and that’s the problem.”

Note: before you consider whether the Congressman’s position has any merit, remember that this is the same Congressman who claimed in public:

• That the island of Guam might tip over in the middle of the ocean if too many U.S.military resources were placed on the island. That’s right, he actually stated in a Congressional committee meeting that an island could tip over.
• He also lamented the possibility that there would not be enough helium gas to blow up birthday balloons if Congress stopped funding a Federal storage facility for helium.

Yesterday we focused on how much the Federal government and the Washington political class wastes of taxpayer money every day of every year and how inane and out of touch politicians like Hank Johnson are when they ignorantly claim that more Americans need to pay more taxes. 

We reviewed any number of credible sources and analyses that constantly show that a very small percentage of people in this country pay a very high percentage of the Federal tax bill. And with more and more of these wealthier people renouncing their citizenship every year and moving away, taking their tax payments with them, that means that the rest of us will end up paying more and more in taxes unless our politicians finally get a handle on wasteful spending.

But the odds of that happening are probably pretty slim, given that they have no even tried despite being shown where the wasteful and useless spending is within the budget. Obama actually commissioned a blue ribbon commission to identify the waste, which they did and which he promptly ignored. 

Today, let’s explode another Congressman Johnson fantasy by showing that no matter how much you tax the high earners and the wealthy in this country, it will make absolutely no difference in the quality of life for every citizen or the financial chaos of the Federal government.

Our proof of this last assertion rests on some simple logic and math:

• The Federal government spends about $4 TRILLION a year.
• Let’s round it off and assume that the Federal government spends about $11 billion a DAY.
• According to the latest Forbes analysis, Bill Gates is the richest American with a net worth of about $81 billion.
• Congressman Johnson and other politicians want to tax people like Bill Gates more.
• But let's assume that Johnson et al get the ultimate politician wish and do not just raise taxes on a wealthy person’s income but that they confiscate EVERYTHING that the wealthy person owns.
• In the Gates case, if the Washington political class took everything Bill Gates owns, it could use that wealth to operate the Federal government for a grand total of … about seven days, just over one week.
• It could pay off only .45% of the national debt, less one half of one percent.
• Not only that, whatever Federal income tax Gates would have paid in the following years would now be equal to zero since it is doubtful he would ever work again, knowing that the Federal government could come along and take everything he owns. This would force the rest of the taxpayers to make up the difference.

Taking everything the richest American owns could support the Federal government bureaucracy for only a week or so. So taking less than that, something that Congressman Johnson and others would like to do would be even far smaller. 

How much smaller? Let’s assume that Bill Gates earns $8 billion a year, a totally made up number, 10% of his current net worth. And that Johnson raises his Federal income tax rate by 10% which yields an additional $800 million a year to the Federal government. In this case, taxing Bill Gates income at a 10% higher rate could result in tax revenue that could operate the Federal government for...about an hour and 45 minutes. This would pay off .004% of the national debt.

Don’t these politicians ever do any simple math before opening their simple mouths? You cannot fix what is wrong with this country by raising taxes, there are not enough rich people to get it done.You have to cut spending, starting with the hundreds of billions of dollars wasted every year by Washington.

Let’s take this imaginary confiscation example and extend to other rich Americans, first assuming that the Washington political class took EVERYTHING they earned and somehow turned it into cash:

Bill Gates $81 billion - could operate the Federal government for just over 7 days.

Warren Buffet $67 billion - just over 6 days.

Larry Ellison $50 billion - about 4 and a half days.

Charles Koch $42 billion - just under 4 days.

David Koch $42 billion - just under 4 days.

Christy Walton $38 billion - about 3 and a half days.

Jim Walton $36 billion - about 3 and a quarter days.

Mike Bloomberg $35 billion - not even 3 and a quarter days.

Alice Walton $35 billion- not even 3 and a quarter days.

Robson Walton $35 billion - not even 3 and a quarter days.

Mark Zuckerberg $34 billion - just over 3 days.

Sheldon Adelson $32 billion - just under 3 days.

Larry Page $31.5 billion - just under 3 days.

Sergey Brin $31 billion - just under 3 days.

Jeff Bezos $30.5 billion - about 2 and three quarters day.

Total - $620 billion which could operate the Federal government for only 56 days, less than two months, about eight weeks or pay off only 3.6% of the national debt.

As with the Bill Gates example above, you cannot make this work even if you take EVERYTHING the richest 15 Americans own in their lives. You could only operate the government for two months in only one year because in the following years these people would have nothing to contribute Federal tax wise. Which means that everyone else would have to make up the difference.

If we continue the Gates example with the 15 richest Americans, than that $620 billion becomes $62 billion which could not operate the Federal government for even a week. And, if you used that money to operate the government, you still have not paid off any part of the growing and dangerously high national debt.

No matter what people like Hank Johnson say, taxing the wealthy even more cannot overcome the out of control spending and government waste of people like Hank Johnson. All this kind of rhetoric does is divide America, waste more wealth, allow the debt to soar, and get nothing accomplished. And remember, this economic wisdom is coming from a man who was worried a Pacific island would tip over take anything he says with a huge grain of sand.

Note: we have already shown how to take trillions of dollars out of the Federal government’s budget without negatively impacting government operations and returning trillions of dollars to pay down our debt and pay back taxpayers. That analysis can be seen at:

http://loathemygovernment.blogspot.com/2012/12/day-7-eight-days-of-logic-and-sanity.html

The analysis was developed by someone who knows that Pacific islands cannot tip over.

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:

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

March, 2015, Part 2, By The Numbers: Out Of Control Spending By Washington and Its Economic Ignorance

On a semi-regular basis we revisit the theme ”by the numbers” just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme is devastate politicians’ opinions by looking at the right numbers.

So let’s take a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

Today we finish up our discussion on “by the numbers” today using the latest analysis of government numbers and other numbers as done by the Heritage Foundation:

1) Anyone with a smidgen of math and number analysis abilities already realizes that government entitlement programs such as Social Security and Medicare are growing much faster than the economy. Simple number analysis show us that as the Baby Boomers retire and start using the promised benefits the political class promised them long ago relative to retirement income and retirement medical care, the cash crunch on the Federal government gets more and more unbearable and unpayable.

Using government data from the Congressional Budget Office and Office of Management and Budget, and assuming that the Federal government’s tax revenue stream will be equal to the long term average of 18%, by 2013, just 16 years from now, government entitlement programs and the interest that has to be paid on our $18 TRILLION national debt (which is growing every day), will be equal to the Federal government’s revenue stream.

This means that before the national defense is funded, before the EPA is funded, before the Departments of Energy, Transportation, Commerce, Education, and dozens of other government entities are funded, the Federal budget is already accounted for. And the situation gets worse after 2031 with government revenue failing to cover the entitlement and interest payments.

Sources: Congressional Budget Office and Office of Management and Budget.

The numbers do not lie: unless radical changes are made to the national debt and the promises embedded within the Federal government’s entitlement programs, there will be an unprecedented budget crisis very soon: the Federal government and the national economy cannot withstand business as usual in Washington.2) As we showed yesterday with Bill Gates wealth, there is no way to overcome the national debt hole that the Washington political class has dug for us. The Federal government spends too much, it does not tax too little. The above number analysis and the impending 2031 doom verifies that reality. But let’s get away from Bill Gates and talk about the debt burden on average Americans. Heritage did another analysis to show what the national debt burden is today and in the future for every American if each one took responsibility for a fair piece of that debt:

• Just for the public part of the country’s debt load, a child born today will have a debt burden at birth of about $41,000.
• By the time that child is 18 years old, their share of the national debt burden will more than double to $91,000.
• Just six years later, their share of the national debt burden will be up over 50% to $142,000.
• And these depressing numbers include only the so-called “public debt.” As non-public debt is converted to public debt, which has to happen at some point in the future, these numbers are much too low to capture the total and real devastating debt effects on future American generations.

Really depressing numbers for today’s youth. They get to pay off the wasteful and fraudulent spending of today’s politicians without any of the benefits from that debt. This is the number legacy we are leaving for our kids and grandkids unless we take immediate and drastic action to get Federal government spending under control.And make no mistake, the current set of Washington politicians are the most culpable. Our total national debt is up about 80%, eight TRILLION dollars just since Obama took office six short years ago. And that will be his numbers legacy to our kids, our grandkids and our history going forward, uncontrolled spending with no societal benefits in return.

PUBLIC DEBT PER CAPITA



Sources: Congressional Budget Office, Office of Management and Budget, and U.S. Census Bureau.

3) We have previously pointed out several examples where state politicians raised tax rates on the highest earning state residents, fully expecting to see those higher tax rates result in higher state government tax revenue.The most classic example was written up in the Wall Street Journal relative to the state of Maryland. That state raised the tax rates on the state’s highest earning residents but ended up getting LESS revenue from the same higher earning residents than prior to the tax rate.What happened with this line of reasoning? In all likelihood those state residents, faced with paying more in taxes, simply moved out of state to avoid the higher Maryland tax rates. Thus, rather than seeing the tax revenue stream increase when tax rates were raised, the state ended up with less overall revenue despite the higher rates. People are not stupid, they will make the decisions that give them the most freedom, economic and political.Which gets us to the final number analysis from the Heritage Foundation. Over the past 50 years, the top Federal government income tax rate has varied from 91% to 28%. However, despite the wide range, Federal income taxes received as a percentage of the nation’s GDP has remained relatively constant. For example, according to IRS data, in 1990, the top Federal income tax rate was 28% which resulted in Federal income tax revenue to be equal to about 79% of the country;s GDP. In 2014, the the top Federal tax rate had jumped up to 39%, about 40% higher than in 1990, but the percentage of GDP was about the same, a smidgen higher at only 8.0%. Thus, despite Obama’s obsession with soaking the rich with higher tax rates, the bottom line is that there were not substantially higher tax revenues generated, as the IRS data below shows.
TOP TAX RATES AND TOTAL RECEIPTS



Source: Internal Revenue Service.

In other words, the top tax rate is inelastic economically compared to tax revenue as a percentage of GDP. Thus, why raise tax rates and reduce the economic freedom of Americans when lower tax rates results in about the same revenue as higher tax rates? Because the political class would rather try and control our lives, despite what the data, numbers, and realities tell us.That will do it for this brief, two post update under our theme, “by the numbers.” What did we learn today from the numbers:

1. Unless Washington changes its spending ways, soon the country will not be able to afford anything but interest payments on the national debt and entitlements.
2. Unless Washington changes is spending ways, a child born today will be faced with a national debt burden of over $140,000 by the time they are 24 years old.
3. Higher tax rates rarely, if ever,at both the state and Federal level, result in higher tax revenues.

The numbers do not lie, the numbers devastate opinions and spin of the political class. And unlike today’s politicians, starting in the White House, the numbers do not lie.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:

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:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w