Math Behind Bernie

Obviously we can easily afford a minimum wage of $15 dollars an hour… Even without sweetening the pot with tax credits like we did on Obamacare, where we phase in a deduction to balance the cost of that extra initial expense, we could still easily afford it.

But if you personally were making $15 dollars an hour after college degrees and years of experience, and then some kid taking your fast food order was making the same as you, you might feel frustrated over how all the past years of your life spent in a Republican economy kept you down, when all you had to do, was strike and demand you should be paid just a little more…

Wage inflation does occur when jumping minimum wage from $8.25 to $15… It starts with those covered under the passage of the law and expands outward through each increase of income level….

This job, requires some math.

The number of America’s full time employees is around 121 million. with another 30 million working part time … 

For our rough calculation we will use 40 hours per full time and 30 hours for part time…

 

So just to see its effect, we will assume a calculated increase from the $8.15 to $15.00 knowing full well the impact will be less than what we predict, since many Americans are currently  already above the $8.25 level

So.  40 hours per week times the increase of $6.75 …is a gain in income per person of: $270 per week… YOW!!  And part time at 30 hours.  $6.75 times 30 equals…$202.50 extra per week.

(These numbers will be big.)
Across one year, full timers would yield $270 X 52 or $14, 040 additional dollars per year. Part timers get an increase of $10,530.

So at 121 million full time workers and 30 million part timers, the gross full timer impact would be $1.7 trillion a year…plus $315 billion for part time workers..to a total of $2.15 trillion a year.

Again, this is assuming the same expansion occurs in every single full time person who is now working, (of an additional $6.75 an hour)… which we all know is quite a stretch. (The actual cost will fall far below these theoreticals we are in the process of determining…)

Point being that if these inflated theoreticals are financially feasible, the actual plan will be as well. There will be no surprises.

So across America employers will have to spit up $2.15 trillion more a year in actual wages. Of course Social Security and Medicare taxed at 7.65 %  each for employee and for employer should also be considered.  Which means that an additional $160 billion should be added on to employer’s costs and deducted from employees benefit when measuring full impacts later   (For the record that would be a total impact of $2.3 trillion to employers and a total net gain of roughly $2 trillion to employees. ..)

Currently the personal income for America is close to $15 trillion dollars.. This expansion would add $2 trillion on top making America’s personal income total  now $17 trillion dollars.

The at-a-glance benefits.

• $2 trillion into the American retail economy per year.
• Boost of $260 billion into Social Security per year extending its life.
• Boost of $61 billion into Medicare per year.
• At an average income tax rate of 15%, boost of $315 billion with no rate changes

And next.

At what price.?

Across $6.160 trillion in Corporate profits per last four quarters we have data…. The price for this is that they lose 2 T’s, and get to keep 4….

At 4 trillion per four quarters, they would need to hold at the 1000 (billion) level or 1 Trillion per quarter.   We first reached that level in 2005. We dropped below in one quarter of the recession.

For most of our history, we have been underneath $4 trillion.. US Corporations only making $4 trillion isn’t going to hurt anyone. And as anyone can see from this chart, when corporate profits are lower, the middle class does better.  When they rise, the middle class does poorer.

Some may bring up the argument that with less profit there is less investment… The math discounts this… While profits were at 6 trillion per year, physical capital investment lagged at 3.1 billion. That can continue unabated at a level of 4 trillion.

Before discounting the loss of $2 trillion in profit, it is important to remember what profit is.  Profit is simply the money left over after all expenses have been paid. Profit is then divided into shares and goes out as dividends to all those who own shares of the corporation.  It is quite possible for a company to run well without making a profit.  Losing profit is not the same as going in the red. Losing profit just means you have less money after your expenses have all been met.. Going in the red means you can’t meet your expenses.

So in a nutshell, America can readily absorb raising minimum wage to 15 dollars an hour. It can even afford giving every American a $6.25 dollar an hour raise for doing what they do.

As for the gloom and doom prognostications of what this would do to the economy, the truth is it would only take us back to level existing as of 2005.

That is how much money that used to come to us…. now isn’t…  Which is why a lot of angry people are supporting Donald Trump …. If they knew enough about economics, they’s switch to Bernie Sanders.

I wish I could predict how much higher those corporate profits go when that $2 trillion hits the economic market place… but there is no precedent, so I can’t…. But in my option,  since we run with much lower profits whenever a depression or big recession hits, it makes greater sense to do it sometime before that moment, and therefore head it off by creating an explosion of real growth.
So not only is Bernies plan affordable, it is very much desired.

 

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This Wouldn’t Have Happened With Romney

The U.S. economy continues to strengthen. Last week, we learned that 209,000 jobs were created in July. This increase represented the sixth consecutive monthly payroll gain of more than 200,000—the longest such stretch since 1997. Over the past 53 months, our private sector has produced nearly 10 million new jobs. The unemployment rate has fallen nearly four percentage points from its peak of 10 percent in October 2009, dipping to a six-year low of 6.1 percent in June… With real GDP having grown at a strong 4 percent pace in the second quarter, the economy is now 6.6 percent larger than it was before the Great Recession.

As we know, the economy is not great yet. One of the major reasons can be see by the lack of demand for large base items that comes from the lack of spare change among many people resettled into new jobs now paying less than their old jobs.

Take recreational boats… It does not make sense to increase production of boat building when those extra boats will not be sold because there are not enough people with enough money to buy them… There are plenty of people; just not enough with the sufficient funds they once had left over to pay for that boat on the lake…

As you can see, despite the positive job data, we have a distance to go before we reach the esoteric heights where Americans are confident enough to spend money on items requiring additional manufacturing jobs to be created…

Essentially people need to be paid more so they can buy more.

So how do we go about that? Write wages in stone? That doesn’t work, it’s been tried. If wages are not marketable, then they become an entitlement. If I can’t sell myself to a higher bidder, then my personal expansion is out of the question. Likewise, I may be very productive, and that covers my coworkers who are not productive at all. If one gets paid for only showing up, over time, that is all some will do. So writing wages in stone as a policy is out.

Economic graphs made across history show us an interesting trend. Wages were flat though the 1800’s. 100 years of flat wages. When the income tax went into effect, the first rise began. When it was cut, the wages declined. Then with the New Deal, with its increased rates, they again soared. When income taxes reached near 100%, national unemployment was in the negatives because of the very high number of people working two jobs. Only when taxes were cut in ’88, did wage rates begin to fall, to rise when taxes were raised in ’92, climbing all the way until the W. Bush Tax Cuts went in, and they’ve been declining ever sense…

Why? It is debatable because it is a task so huge, that mining data is impossible. But we tracked. It happened. As is the usual human tendency, even when it is something we don’t understand such as patting Betty Grable’s pin up’s bottom every time you fly up to engage the enemy, each time we are successful, we keep doing it…

In theory, if you have money as an employer, which is about to be taxed and handed over to Uncle Sam, putting it into your business makes more sense than handing it over carte blanche. At least in your business, you still have control over it and can steer it in directions you desire. That includes paying ones people. “Hey, Boss? I’ve got a baby on the way, and my wife can’t work. I’ve done a lot for you, can you spare more money a week?” “Might as well,” he says, “I don’t get to keep any of it; Uncle Sam takes everything extra I make”..)…

Which explains why the economy only began to really grow, after January 2013, when the Bush tax cuts on the top .5 of one percent were pushed up to 40% from Bush’s 35% rate…. That extra 5% was the catalyst for the growing economy we see now.

Compare what would have happened if Obama had lost in 2012…..

Romney’s budget plan would lead to a net loss of 554,000 jobs by 2014

A budget revenue-neutral, would lead to a net loss of 1.9 million jobs over the next two years, largely because of deep spending cuts, the report found.

The weaker job growth and outright job losses under the Romney plan are driven by his proposal to cap government spending at 20 percent of gross domestic product (GDP), a move that implies very large cuts to overall spending.

And just to put a finger on how well this really is? Here is the growth outlook posted by economic think tanks leading up to the election of 2012. One must bear in mind they are probably going to be politically inflated considering when they were announced….

“The budget plans put forward by Barack Obama would lead to increased employment of about 1.1 million jobs in 2013 and 280,000 jobs in 2014, relative to current policy.”

Where as actually, we outdid that. 2.2 million new jobs in 2013…. and so far as of July 2014, this year has already grown…1.6 million brand new private sector jobs…

Those calculations, once poo-poohed by Republicans as being pie in the sky and based on myth, have simply been crushed…

Raising taxes on the top earners… works.
Tax Cuts Don’t (just ask Kansas, Wisconsin, Pennsylvania, Florida, and Tennessee.)

How Conservatism Is Destroying The Core Of America

The lack of Federal funding is eating the heart of America. We see it with the 495 bridge… No inspectors, no one just driving by and saying, “hey, why is there dirt piled there”; those people all missing due to budget cuts. Simple things that could save tons of money, not being done because there is no money to pay for them.

This should not be… Profits are a good thing, like a personal savings account is a good thing… But no one is foolish enough to put more money into his saving account by shorting his power company, his water company, his house payment, his insurance policies…

But the Tea Party and Republicans have done just that. They say we are spending too much, so cut, cut, cut,… As a result, we cut what we need to live on… There is a point where we have to stop.

We need to rebuild our infrastructure. We need to spend more on special education. We need to get jobs into our inner cities. We need to educate our children with an 11:1 student teacher ratios… We need more construction jobs.

Money is just sitting in the accounts of the top 1%… A good plan gone bad, has robbed our economy of necessary resources and put it into accounts, locked away from our use.

I used to think a 40% rate was acceptable. But we have 14 more years of neglect to redo. I now believe that level has shifted upward to a 50% top marginal rate. If half of every dollar earned by the top echelon was reinvested back into the economy, we would all again support the wealthy making themselves wealthier. The problem is not with the rich getting richer… That is to be admired. It is just when they get richer only at the expense of the poor, that doing so becomes morally bankrupt.

The longer we wait, the higher the rates may have to go in order to undo the damage growing every additional day….

We are sequestering too much money. And the Republicans want to sock away even more… They voted two weeks ago for a $270 billion tax cut just to the 1%… and raised the deficit. Fortunately Democrats in the Senate stopped it from going forward…

Our problem is in Washington, DC. It is financial. It is our Federal tax rates, which in fact are too low for the amount of wealth we lock away. It is all due to one party in control of one branch of government who won’t spend available money on necessities,

There is a bright future for America but only if we tax those who have benefited greatly these past 14 years, and use their resources to remake an America ready for the next Century; there is no future when pinching every penny we created over the last century, in order to put into a savings account no one is allowed to use…

We’ve lost the vision of how great America can be; that should never happen.

When Monopoly Stops Being Fun

I’m sure most of you have played Monopoly. With several people playing it is fun for a while.. After a point it stops being fun, and you just hang in. After another point, those people who have left the game seem to be having more fun than you and your competitor. Finally one of you goes bankrupt….

The American economy is the same way. While people think they have an opportunity to get better, the playing is fun. As long as they believe everyone can win, the play by play is mesmerizing.

Hope is missing from today’s economy. Most Americans have been shut out of the game… They are on the sidelines binge watching Netflicks’ episodes… Fewer and fewer players are left making riskier and riskier moves.

What is needed is to get a majority of Americans back into the game. If we were discussing the Monopoly board, changing the reward for landing on “GO” from a palty $200 dollars to $200,000 would be a step in that direction. That way if you land on Park Place you can have a chance at starting over and continuing…

And that is what has to happen to America. We need a chance to make a change and get compensated well for doing so. It takes a catalyst. That catalyst would be to change the tax rates to where money now, not used, could then be returned to the economy for investment. Money now being arbitrarily thrown into additional hotels and houses, just on the hope someone may one day land there and be forced to pay, should instead be put back into players’ hands, who can also buy hotels and houses and get money back when the rich guy lands on their property…

There is only one winner in Monopoly. Monopoly is a game, played with no consequence in a shortened time span. It does not work in real life. Therefore, we need to change the player’s rules of our current system. We need a system with more than one winner. That can only happen when We, the People, elect representatives who stand up against ALL corporations, instead of kowtowing to their every wishes…

Basically, eliminate Republicans, and the game is fun, again.

Prediction: Hemp Will Save The Small American Farm

You heard it here first.  More on this later, but first all need to work to make hemp completely legal…  Hemp  is God’s gift to America, and I don’t mean when it goes up in smoke.  I am speaking of  fibers…

Begin educating those who won’t vote for hemp legalization….

The hemp plant is a renewable resource..

Hemp enriches the soil it grows in. …

Hempseeds and hemp oil are highly nutritious and delicious…

Hemp is the only plant that contains all of the essential fatty acids and amino acids required by the human body… (stop over-fishing).

It is an excellent option for vegetarians.

It’s quite high in some essential amino acids, including gamma linoleic acid (GLA), a very rare nutrient also found in mother’s milk.

Fishermen sprinkle hempseed on the water as an effective bait..

Songbirds will pick it out of the mix as they prefer it over other seeds.

Hemp is becoming a common ingredient in lotions and many other skin, hair, and cosmetic products.. (compared to toxic chemicals).

Hemp is an ideal material for making paper. It regenerates in the field in months (unlike trees which can take 30 years or more to become harvestable after planting.)…

It makes a fine quality paper that is naturally acid free and does not become yellow and brittle or disintegrate over time like conventional paper.

Hemp is also excellent for making rugs and other textiles.  Levi Strauss’ original denim jeans were made of hemp.

Hemp is the traditional rope making fibre due to its flexibility, strength, and resistance to water damage..

Hemp oil can be used to create biofuels to replace gasoline for diesel engines. Unlike fossil fuels, biofuels are renewable and produce less of the greenhouse gas carbon dioxide.  Diesel built his original engine to run on hemp oil.

Alternatives to plastic can be made from hemp… Hemp based materials can replace wood and other materials used to build homes and other structures including foundations, walls, shingles, paneling, pipes, and paint.

Hemp may look like marijuana, however it does not contain the active chemicals that cause mind-altering effects.  Politics have kept this gift from us.  When Dupont made nylon, it influence was used to suppress hemp production….

“58,000 tons of hemp seeds were imported into America for paint products in 1935″ — Sherman Williams Paint Co.

Hemp produces the same amount of oxygen while it’s growing that it would use in carbon dioxide if burned as a fuel. Also, due to it’s leaf/root ratio (this can often be 10% roots vs 30% leaves), hemp can produce between 20% – 40% more oxygen than will be polluted.

Thomas Jefferson himself said, “Hemp is of first necessity to the wealth and protection of the country.”

The draft of the Declaration of Independence was made on hemp paper….

The first American Flag was made of hemp.

If hemp cross-pollinates with marijuana, it creates a lower THC marijuana, not a smokable hemp… Illegal growers will not grow near hemp farms because it practically destroys the effectiveness and marketability of their product.

Fabrics made of at least one-half hemp block the sun’s UV rays more effectively than other fabrics..

The US Drug Enforcement Agency classifies all C. sativa (hemp) varieties as “marijuana.”  Hemp was grown commercially (with increasing governmental interference) in the United States until the 1950s. It was doomed by the Marijuana Tax Act of 1937, which placed an extremely high tax on marijuana and made it effectively impossible to grow industrial hemp…

While Congress expressly expected the continued production of industrial hemp, the Federal Bureau of Narcotics lumped industrial hemp with marijuana…

Because of its low lignin content, hemp can be pulped using less chemicals than with wood…

It is naturally resistant to most pests, precluding the need for pesticides. It grows tightly spaced, out-competing any weeds, so herbicides are not necessary. It also leaves a weed-free field for a following crop…

Today it is clear that these beginnings of “the war on drugs” were pushed into being by the newspaper, cotton, and petroleum industries, all of which had much to fear over being competitive with hemp…..

Finally, a word of wisdom from our founding father…. “Make the most you can of the Indian Hemp seed and sow it everywhere.” — George Washington 1794

 

 

 

 

Time To Pay Your Loan, Mr. 1%

You should be irate every time you hear a rich person complain about his paying of taxes… “I pay so much taxes ….”  Immediately you should add “because you got all our money.” For that is exactly where it is…

For example, let’s take Ronald Reagan’s tax rate: 50%…. and compare to the Bush W rate of 35%…… Follow up with 1980 versus 2013… as short span of one third of a century….

Chart Courtesy of dshort.com

Raw Data 1980 (Theoretically Averaged)
0-20%——$12,000     (Times X) 50% = $6000
21-40%—–$15,000     (Times X) 50% = $7500
41-60%—–$25,000    (Times X) 50% = $12,500
61-80%—–$30,000    (Times X) 50% = $15,000
81-100%—-$38,000    (Times X) 50% =   $19,000
{95-100%–$68,000   (TimesX) 50%    =  $34,000}

Total —————————————= $59,500…

Raw Data 2013  (Theoretically Averaged)
0-20%——$12,000    (Times X) 35%  = $4560
21-40%—–$26,000    (Times X) 35%  =,$9100
41-60%—–$50,000   (Times X) 35%  =,$19250
61-80%—–$76,000   (Times X) 35%  =,$26,600
81-100%—-$178,000  (Times X) 35%= $62,300
{95-100%—$317,000 (Times X) 35%= $110,950}

Total ——————————————$121,810…

(This exercise is theoretical. It is designed only to show the mathematical properties underlying our nation’s problems.  There are many other factors not included here which either promote or work against these results… So don’t get bogged down on these results not being real.. Those effects wash out and are not part of what we will show here.)

Below are the across the 33 year  plus-or-minus changes in the theoretical tax burden of each quintile.

0-20%——-$ (-1,440)
21-40%——$1,600
41-60%——$6,750
61-80%——$11,660
81-100%—-$43,300
{95-100%—$64,950}

 

Now if you take the theoretical amount of today’s top income, and instead tax it at 50%, you get this figure… $158,500… That is what todays top people averaged IF rates stayed at Reagan’s level of many years ago (compared to $110,950)…  The difference from that and actual is $47,850…. which if you look at the bottom showing the difference from 80 to now, would cover all of the four lower quintiles contribution…  (-1440+ 1600+ 6750+ 11600= 22,570)

So the tax revenue which we need, and have lost, if fairness is to be an issue, must come from the top 1% first and then, and only then, after they have paid back what they’ve earned from less taxes first, then begin to think of raising taxes on the other 4 quintiles…

Unequivocal proof we need to raise taxes on the top 1% as soon as possible..  There are a lot of other reasons of course, but just math theory dictates that to grow America and stop its backwards slide, the top 1% need to pay more.  There is one obstacle … The Republican Party that thwarts any progress for the other 80% of us, just because they won’t budge on opening the door (increasing the top one percents’ tax rate) and let us pass through into prosperity again…

Furthermore:  this put a nail in the coffin for all those arguing “a flat rate”….

For those arguing a flat rate, obviously you can’t take any from the lowest level (its negative) which makes the flat rate argument completely moot because the whole idea of a flat rate is that it is exclusive. As soon as you start picking and choosing, what you are doing becomes progressive and it is not a flat rate anymore…  Throw that out completely.  You can’t tax negativity….

We, the 80%, through our misguided politicians in the 80’s, loaned the rich our money to get rich by.  Now, when we ask for our first installment payment, they say, no, it’s…. their money?  I don’t think so…..

Carney Votes For $10.10 Minimum Wage

Just so all know he ain’t all bad.

It still didn’t pass, 230=193 with 5 Dems siding with the majority…

Zero Republicans Voted for the Increase in minimum wage…

Almost like they are daring you to vote Democratic, isn’t it?  As my grandmother always said, you can tell Stupid if it votes Republican.

Remember this below when you hear stupid say: “we need jobs…”

2014 Job Creation Faster in States that Raised the Minimum Wage

 

 

States Raising Minimum Wage This Year Have More Job Growth Than States Who Did Not

More evidence for a national wage hike. Raising wage rates creates demand and demand creates more jobs. Although it is not possible to establish a direct correlation, it does show that the naysayers who predicted doom and financial collapse, were wrong. Again…

All this time we’ve been afraid of raising wages… Only thorough tireless efforts by our restaurant employees has this finally hit the front burner… Raising wages is good for demand and demand is good for business….

By the way. those business who had to raise their wages in those states, are posting higher profits, despite wage increases… Proving those who say the minimum wage hike cost jobs, were completely wrong…

We cannot be wrong in 2014…. Do what you can to make sure those who continue holding us back with Conservative policies and who, by refusing to put the key in the economy’s ignition despite every passenger’s entreaty, prevent that key from being turned..

Past time to switch drivers….

Guess Which Economic Policies Are Designed To Keep You From Making More Money

If you are a results-person, the image above showing poverty levels related to State Legislature Control by One Party, is daunting. And they want to make all of America succumb to the level of their respective states….

Just look. Understand we are moving opposite of where they want to take us… When someone is purposefully paddling the opposite way from the rest of the crew, it is past time to maroon them somewhere and move on…

Pro-business polices don’t work. We don’t like what they are offering….. We live and die by results.

Why Did The US Bounce Back

Today the US is the strongest economy in the world. 6 months of over 200,000 hiring, lowest unemployment since 2008. So why are other nations not bouncing back?

Several reasons all show we had the right party in the White House at the right time. The opposite party proposed all the exact opposite policies of what actually worked….

Here is what is credited for our bounce back economy….

An Aggressive Central Bank. The Federal Reserve acted sooner and more aggressively than other central banks in keeping rates low,

Stronger Banks. The United States moved faster than Europe to restore its banks’ health after the financial crisis of 2008-2009.

A More Flexible Economy. Some economies have restraints placed on wages, unemployment, retirement, and favoring certain businesses over new innovators.

Less Budget Cutting Weighed down by debt, many European countries took an ax to swelling budget deficits. They slashed pension benefits, raised taxes and cut civil servants’ wages. The cuts devastated several European economies…

A Roaring Stock Market The Fed’s easy-money policies ignited a world-beating U.S. stock market rally. Higher stock prices would then make Americans feel more confident and more willing to spend — the so-called wealth effect.

Raising Taxes On Top Incomes: The Stock Market began it unparalleled climb, beginning the second week after the tax rates rose in January 2013 upon Obama’s inauguration, and has never since looked back….

The opposing party at each venture, argued for taking every exact opposite approach…. policies similar to that which Europe, Japan, and China followed. We would still be luckluster like those nations now had we a Republican running things instead of President Obama…..

It is important for these same policies to continue; so important that for this 2014 election, we need to do what we can to make sure these same successful policies can move ahead faster… Our nation’s economy would gear up a faster, if we just take off the parking brake… which by now does not even need to be called by name. We all know who they are…….