Monday, February 28, 2011

Rand Paul on David Letterman, Part 1

No one wants to pay their taxes except David Letterman. Thank goodness he isn't running for office or that would become an untenable position for him to hold. David Letterman's political leanings are weakened by his desire to keep his show less political except in jest.

Rand Paul doesn't want to pay his taxes but he wants to balance the budget. You see, shrinking government is the way to make our economy work better because private citizens know better how to spend their money. The government wastes it. Therefore we should shrink our government. While this is a working theory conservatives have been working under since President Ronald Reagan it is given in response to Letterman' s question as to why we should keep the tax breaks for millionaires while firing teachers and other government workers (mostly composing the middle class). The answer vaguely adresses the question in ideological terms but utterly fails when it comes to specifics.

Again, most of the budget is composed of apparently non-negotiable items such as interest, entitlements, tax breaks (if that can be termed a budget item) and defense. Why are Bush's tax breaks non-negotiable? Rand Paul's basic response is that everyone agrees we are overtaxed. This general response seems to be popular but if the Republicans had been in power for say 8 years and they have gotten the nation further into debt, when do we pay for all of this? Since the time of President Reagan, Republicans have been arguing the same thing Rand Paul is arguing, yet, the part of the budget we pay for interest on our debt is substantially worse. And we still have to pay for it. Instead we cut taxes? What is the tea party saying that hasn't been said and not acted on by the Repbulicans. Is the Tea Party really just saying, "NO, trust us, not Republicans. It's different this time."

Rand's best and specific argument was this: “If you look at the taxes, if you look at the income tax, the top one percent pay about a third of the income tax. The top 50 percent -- those who make $70,000 and above -- pay 96 percent of the income tax, so the middle class and above are paying all of the income tax.” David Letterman's reply was "I think there’s something wrong with those numbers. I don't know what it is exactly, but I'm pretty sure there’s something wrong with them. Because you’re talking about [applause]-- thank you, you're applauding my stupidity. God bless you." His response was humorous, self deprecating and true in that David Letterman is not a political or economic pundit.

The problem is that the obvious question is how skewed is it that this statistic is true?  The median income is roughly what Rand Paul said it was, if I have any memory at all, which is debatable. That means that 50 percent earn more and 50 percent earn less.

To make this easy for me with my old math, let's do this by example, assume 10 people earning 10 different incomes, the median being 5.

The first person earns 1 dollar, the second 2 dollars. etc.  Then let us assume there is a flat tax, non progressive absolutely fair in every way the anyone could think of. Let's do 30 percent tax rate..

Lower half
Person 1-  income $1, tax ($.30)
Person 2 - income $2, tax ($.60)
Person 3 - income $3, tax ($.90)
Person 4 - income $4, tax ($1.20)
Person 5 - income $5, tax ($1.50)

Upper half
Person 6 - income $6, tax ($1.80)
Person 7 - income $7, tax ($2.10)
Person 8 - income $8, tax ($2.40)
Person 9 - income $9, tax ($2.70)
Person 10 - income $10, tax ($3.00)

Total tax paid = $16.50
Total paid by lower half = $4.50
Total paid by upper half = $12.00
Percentage of tax paid by lower half:  27.2%
Percentage of tax paid by upper half : 72.7%

Holy heck, can that be right?  Based on Rand Paul's best logic the fairest possible tax on an evenly distributed sample makes it look like we should be tax cutting the upper half and certainly not the lower.

That's not the real problem though. Because we owe more than $16.50 (remember we have borrowed in the past and are currently running a deficit) we surely can't afford a tax cut to help those poor rich guys paying 72.7% of our taxes.

But let's do it anyway. Let's give 'em an across the board tax cut, make it "fair" and give everyone an across the board 10% tax cut. Oh, holy mackerel, the upper half gets 72.7% of the tax cut. (President George W. Bush style, head 'em up move 'em out, rawhide! Hyah, RAWHIDDDDE! HYah...Sorry, got a little parenthetically carried away.) Oh no, now we are deeper in debt and the economy is tilting towards disaster. Should we pump money into the economy, (Oh heck yes, says President George W. Bush in the biggest ooops moment in history) Well, duh, yeah.  But how do we pay for that pumping of the money which makes our debt even higher. Cut government. Ummm.. but not defense, and of course, interest..., oh heck. I'm getting tired of explaining this.. let's go to Wikidpedia.
There are two types of government spending — discretionary and mandatory. Discretionary spending, which accounts for roughly one-third of all Federal spending, includes money for things like the Army, FBI, the Coast Guard, and highway projects. Congress explicitly determines how much to spend (or not spend) on these programs on an annual basis. Mandatory spending accounts for two-thirds of all government spending. This kind of spending is authorized by permanent laws. It includes entitlements like Social Security, Medicare, and Food Stamps — programs through which individuals receive benefits based on their age, income, or other criteria. Spending levels in these areas are dictated by the number of people who sign up for these benefits, rather than by Congress.
1/3 of the government spending can actually be touched, even when we include military. Actually it's closer to 38 percent according to this chart from the Congressional Budget Office for FY2008:

Non-defense discretionary spending, all we can hope to cut, is roughly 18%, or statistically insignificant enough to round it down to almost "none" (being the opposite of "all") using the Rand Paul rounding process.This same rounding process was used by House Republicans so they could say they kept their campaign promise by cutting $61 million instead of $100 million. (Only when rounding up to the closest 100 million, as Rachel Madow so humorously stated it.)

How much of the FBI do you think we should cut? hmmm

Time to tax more? Nope, the Tea Party is a tax revolt." Less taxes, less taxes" or we could say "deeper into debt, deeper into debt." While David Letterman is lampooned on Tea Party sites for not knowing specifics while Rand Paul was giving him an "economics lesson," please, for the love of our children, let's look upon snake oil salesmen a little suspiciously even if we aren't sure what's in the children's cough medicine we are buying.

Thanks Dave. Sometimes you just need to put them on the air and say "huh?"

Sunday, February 20, 2011

Counting our Coins from Tax Cuts Instead of Sheep

"Even if Congress eliminated all of the nation's nondefense, discretionary spending and defunded domestic Cabinet departments, it would save only about $500 billion, leaving an operating deficit this year of $1 trillion."   - L.A. Times
Of course, we cannot raise taxes, or drop tax cuts, or cut entitlements, or defense... all this ado about the miniscule in the House of Representatives is a dreamworld for the wooly brained sleepy eyed folks. Yawn... Then there is the growing piece of the shephard's pie we will never be able to cut out of our expenses --the amount we pay in interest payments on all this borrowing, borrowing that is really only necessary to make sure we will not awaken from our dreamy slumber.

Yawn.....I'm sheepy, ummm sleepy, good night. 
Awaken me when the inflation comes around to shear my coins.
Stretch...yawn, oh we'll just blame that on Obama, and I'll just catch a few more winks then.....these late nite congressional sessions are killer......zzzzzzzz

Friday, February 18, 2011


Produce Truck on the Island of Madeira Portugal
Soon, in May, I will be going back to Madeira on a Disney Cruise. Hurray!! This picture is from our last Disney Cruise. I'm retaking the cruise because it was the best value for the money with only one person cruising. Wanda never has the amount of vacation time I do. I have a cushy job in that respect. I'm always more relaxed the second I visit a place so I'm sure I'll enjoy every minute of it, well at least as much as is possible without my wonderful wife by my side.

Thinking about other things, I'm sure there are sports hooligans all over the world but thanks to a professor from Tuskegee, who comes into my workplace and who happens to study risk management, I see the future risk to our planet in juxtaposition to the seemingly ridiculous antics of sports fanatics. He said that water shortages would the big challenge for the future. He quoted some forecasts that were startling.  He contrasted this with people who fill their lives with sports fanaticism and equally irrelevant reality shows, to him at least. He loves learning and scholarship. And I love this guy. No person who has ever come to use our computers has ever done as much extensive research as this guy has. It is always a good day when we exchange pleasantries and ideas. It is a highlight.

Here is a recent article about the current 2011 food shortage from Slate, hidden as it is from the great American thinkers who poison trees:

This coupled with a number of other related problems I have been reading about mean we will probably have an above average inflation rate coming up for this year, thinking of from an American point of view. The years to come will probably have an even higher inflation rate as we finally begin incurring the expense of the taxes we don't pay and the borrowing we do make. We'll pay these debts off by inflation, which will eat away at our debt in quite a different way. Money being worth less, we thus have less debt. Think of the tax cuts for millionaires and billionaires (and other expensive problems not recognized nor acted upon) as being a missed stitch in time, as we burst our 9 other stitches with higher prices on everything.

One of the smart investors portrayed in The Big Short by Michael Lewis (my top choice so far for books on the financial crises), Michael Burry (a short seller who recognized early on the impending doom in the subprime mortgage market and had almost a 500 percent return during the years most Americans lost their shirts) is currently buying farm land with water supply on property for his next investment strategy. Hmmmm.

Thursday, February 17, 2011

Auburn, Alabama

I'm not who I was.

I have worked in Auburn, Alabama for almost 10 years. Not only have I accepted Auburn as my home, I have felt a deep bond with the people here who took me in right away. Auburn is growing fast, and you don't have to look too hard to find people who feel that the expansion is much too fast  to keep things in line with what they remember from their childhood.

After living in Auburn for a few years, I had a distinct feeling that the current Auburn was more like my historical childhood Montgomery than is the current Montgomery. Today in Montgomery, things go well beyond the few minor growth pangs they have here. In Auburn things seem a lot more innocent and sweet. People are still friendly where ever you go. It was new to me when I moved here from Montgomery, but I had the same old feeling I remember from my childhood in Montgomery. In that sense, things have been nicely familiar.

About a year ago, I decided to see what was left of my old neighborhood in Montgomery. The apartment complex I grew up in had few buildings left and those were boarded up. My particular building was long gone. It really signified my final little goodbye to Montgomery as I looked at the crumbling foundation where our apartment had been. The neighborhood was now ghetto.

Nine years earlier I had felt the same kind of "so long to all that" moment when I left my job in Montgomery. I had notified them early because they were obligating themselves to pay for classes that I was soon scheduled to take. I wanted them to know sooner rather than later that I wouldn't be taking those classes. This backfired spectacularly as the vindictiveness of the people in charge set in. I had not had a vacation in years and years. This is another epic story, so I'll leave that until later. Suffice it to say that I had a vacation coming that had been on the books for a year. We had plans made, time was officially granted on the calendar at work, hotels reserved, for a nice vacation down in Walt Disney World. The vacation was immediately canceled by my boss while the cool breeze I met with in the director's office was distinct throughout my remaining time there. As with any job, when you leave, don't tell them until the very last minute. Of course it took at least a year to build up enough time in my new job to take a vacation. Now I take them twice a year, if possible.

When I moved to Auburn, things seemed so wonderfully casual. I found myself surrounded by smart people with views that were remarkably diverse. Strangely, sports wasn't even on the list as popular topics of conversation most of the time. The topic came up here and there (and certainly came up during this last year a bit) but overall I was among people who marveled at the oddity of sport's fans. We were people who warned each other "Watch out for that game traffic." Recently, where I work, all the "employees of the month" for the year were honored at a luncheon, and I was honored to be an employee of the month. I sat at a table and we mainly talked about sports. I honestly thought, "This is truly strange."  I hadn't had such an in depth discussison about sports since I got here.

Yet because of the composition of the members at my table and the exciting events of the moment, sports was the favorite topic. However, the topic took on a metaphysical bent. It wasn't sports itself that was being discussed but more about how sports related to the city. It was about hotels and merchants who had prospered because of Auburn's University's national football title. It was about how the icy weather had effected some events leaving some merchants with less than the full bag they expected. It was about other events that luckily happened and the merchants were blessed. It was about things that mattered as well as those that were just a little fun.

When I came here to Auburn, the city welcomed me with open arms just as my backside was still smarting from my exit from Montgomery. I grew to love the city. I now live in Opelika nearby, having sold my house in Auburn for a very nice profit, and live far enough away that we feel we live a slightly more peaceful existence. The quiet at home is better for old folks. :)

To me, sports are a tourist attraction, sports are Olympic athletes who train here and I converse with and then watch them in the Olympics, sports are the blimps that pass over our new house in Opelika (we seem to be fairly near their landing field and when they pass over the house, we know it because they are flying low), sports are the runners we see running down the road at all times of day to stay in shape. Whatever sports seem to be is definitely not hateful, at least in my limited view of things.

People here wear University of Alabama shirts in abundance, while not in the same numbers as Auburn University shirts, quite a few of them are around town, especially considering we're in a town named Auburn. They were particularly striking after the big rivalry game between Auburn University and the University of Alabama. Alabama lost and the Alabama shirts were just as well represented after the game as before. It's just part of the fun of living here. People are friendly.

As for people poisoning our trees and yelling "Roll Damn Tide" to brag to the world exactly who it was and what they had done, I'm not really there yet. I don't get you folks. I have to say, when we first went to the stadium to just walk around and watch the crowds, I remember telling my wife Wanda "I like it all, the crowd, the excitement, except for that 'War Damn Eagle' thing. They could skip that." We have been to a few games since we came here when the tickets were offered free. A stadium full of people at sunset is just an awesome sight. And those athletes are incredible.

I had been to Toomer's corner once a long time ago. It was in the early 70's that I visited a friend in Auburn more than a few times a year. He had been a good friend in Montgomery and had moved on to college at Auburn. Once after a football game he took a group of us a few blocks from his boarding house to Toomer's corner where this event happened that few people attended except mainly the students. They rolled the tree, and chanted cheers. The game was an away game so there was no huge crowd in town, just us. There were maybe 100 people I guess, certainly not the crowds of today, the tourists that are so important to our city.

I'm 53 now and I was probably 15 then. I have bonded with the city of Auburn throughout my lifetime without knowing it. As I have said before, one of the things people come to study here is agricultural, or horticultural in nature. They take this knowledge with them and grow food and do awesome things in the world. Talking to some of them makes me respect them all the more. The nicest guy, and certainly the most polite guy, I have ever met in my entire life, and I'm not exagerating, raises horses around here. We all agree, this is one great single young guy, girls. But apparently people like him are not as respected to some as the lawyers who advertise on television trying to get you to realize you really were physically hurt beyond measure by that little fender bender. Auburn is the "cow college." Hint to those who might be better grounded in the reality of our planet's current woes: it's a term of derision.

Poison the trees? Yes, I suppose you can do that to trees as well as grow them. Perhaps we could litigate if the more idiotic of Auburn U's own fans weren't the other half of the problem.

My faith in humanity has twilighted with the loss of the trees as I have found myself twilighting into my older years. Years of time have taught me other people's human values appear to be declining just as my own have grown. But I do know that tragedy often grows something good, despite it all. I hope that's true this time, because I love Auburn now and I never want to leave. Those trees actually meant a lot to me. They were kind of a symbol of the place I love, part of my first experiences here.

Wednesday, February 16, 2011

Toomer's Corner's Trees Poisoned

There is too much hatred in sports and in life, as I said before in a post here. The same people who give you winning at all costs in football games, now give you terrorism. It's all one and the same. Either people have humanity and values or they don't.

I seem to have a talent for predicting catastrophe. Every time we went by those trees I pondered the fact that no one had bothered to poison them. They seemed so unprotected to be so important to us. It seemed like perhaps I was wrong about humanity. Perhaps people were basically good and there was no need to worry. (As I thought "Perhaps these investment banks are right about our economy." Before the crash.)

It is a solemn and sad day in Auburn.

Saturday, February 5, 2011

Invasion of the Body Snatchers

Coffee klatsches, hmmmm..... the 1950's version of a tea party?? Thank goodness we have Starbucks now to keep those coffee klatsches from forming. 

 I'm thinking that the treatment of doctors depicted in the film (who go where the money is as their main objective instead of helping sick people) might be too good for one millionaire doctor I have known who callously ignored testing me for osteoporosis (that I did have*) because I was a man (and therefore unlikely to get it) and because she had so little time to treat me in my 5 minute window on her assembly line of treatment offices created for milking the most money out of her practice. First, grab her SUV and then put her family in the back of  a 1950's vegetable truck, yes. But don't take her somewhere else to misdiagnose others and milk insurance companies, our health care co-op, so to speak.

I also enjoyed the evil vision of socialism at the end of kids doing calisthenics. I'm not sure... wouldn't socialism be worth it just to get kids away from video games and outside getting some exercise? This is thought provoking.

And I'm a little surprised they missed the idea of editing in some sound when they added Obama's picture. Some evil sounding crescendo would be awesome.  Dum dum dum......Perhaps that would be just a little to kitsch for these tea party klatschers.

People actually virally forwarded this email to warn against the evils of everyone having health care. The level of thought today apparently hasn't changed much from the 50's. Much of the 50's had to do with keeping people in their place. No socialism was apparently needed to keep "Negroes" separated off from those white folks depicted in the video deserving rights and freedom of choice and freedom of health care. It was a great time for white folks. They still had vinyl records.**  :) 

* At a health fair sponsored by my government employer, a screening test was done for osteoporosis on my heel. The tester warned me that the results were dangerously low. My doctor thought, because I was a man, that I didn't need the full test. She said "You don't have osteoporosis. Those screening tests are notoriously unreliable." Two years later, when I switched doctors because of other crap she had done to me, I wanted to be tested  and was. The test said I was very close to osteoporosis, then the next time I was tested, despite the treatments, I had full blown osteoporosis. Two years of time where I could have been treated were wasted because the doctor made a snap judgement in the 5 minutes she had with me. I had trusted her and the system.

 ** The forces of capitalism got together in monopolistic fashion later to make sure we all had to buy CDs and made sure that vinyl records would disappear. They organized the record stores to get vinyl off the shelves. They actively controlled the marketplace to make their dream happen (without socialism). Their dream? That all of us would rebuy our collections on CD which we already had on vinyl. Too bad cd's became so easy to copy... oops.