TARP Was A Brave, Noble, and Foresightful Act

Like him or not, the TARP plan was an amazing success. At a cost of $422 billion, it paid taxpayers back $433 billion… It made money!

Remember the other side…. The one that said “let everyone fail”? Yeah… They are pretty quite now, aren’t they?  Cockroaches under a log.

At times, government needs to intervene…. anyone who says otherwise needs voted out of office….

Promises, Promises, Promises…. from Delaware’s 2009 Inauguration Address

So 5 years later, how are we looking?

“I believe there are millions of dollars of waste and inefficiency to eliminate from government. We will find it.”

What do you think?  Knowing the details of school budgets I’d say we found it, with some help from a recession that sort of forced our hand a little.

That means cutting back on many government functions and services

Yep, that happened.

I see beyond the gray clouds, to a brighter Delaware.

Clouds were gray today; all day.

A Delaware where every child can grow to his or her full potential. Where every worker has the opportunity to earn as much as possible. Where every family has the health care, housing, and heat they need to live a decent life.

As far as fulfilling the minimum, Delaware is one of the best in the US.

A Delaware that is the best place in the world to go to school, to raise a family, and to start a business.

Not there yet because we are not taxing enough. Our infrastructure looks poor and rundown compared to our neighbors who tax at higher rates and make sure tax dollars get spent into their economies.

We want to start by using the anticipated federal stimulus money not just to build short-term jobs but to create future growth in energy infrastructure and a greener economy,,

Although not green, both Bloom Boxes and the Delaware City refinery are  up and running now, in part to the stimulus money.

 The basis for that economy is education, and we must make Delaware’s education system the best in the world. We currently rank near the top in the nation for education spending per student. It’s time we rank in the top for education results for students.

Reminder: scores went backwards this past year.

We will spend smarter. We will demand accountability from top to bottom. We will retain, recruit, and train the best teachers in America – and we will reward them for carrying out the most valuable job in Delaware. We will demand the performance, promote the innovation, and provide the flexibility to make every school in this state great.

TFA?  Really?

By creating a 21st-century workforce development system that trains workers for the jobs employers need, we will make the term “Delaware workforce” a high-quality credential that employers trust.

See above:  Educational scores went backwards.

We will expand our efforts to promote entrepreneurship, financial literacy, and asset-building. The ultimate goal of all these innovations will be to promote people-centered, community-based development that makes virtually every individual an economic resource rather than a financial responsibility.

Don’t think we are there yet.

Our commitment to supporting Delaware families will not waver. We will work with the federal government to finally bring affordable health care to every Delawarean.

This is happening as I speak.

We will develop a Public Safety Plan to keep every street in Delaware safe.

Needs to become your first priority. Far more than education.

And we will start by opening up state government itself: I pledge that my administration will be more transparent and accountable than any that have come before.

What do you think?

Some might call this agenda ambitious. Some might even call it “audacious.” But audacity is exactly what this day demands. To brave the raging storm, to dare upon the roiling sea, and still to reach for the further shore: My fellow Delawareans, that is our challenge. That is our charge. That is our task. And this is our time.

Since the turnover of staff beginning in 2013, the Governor has become cautious and now plays things safe.  The ambition, audaciousness, and audacity he extolled back then, is burnt out now.

When the torch was passed to a new generation – and, against great odds, like those before them they carried it higher. Let us be that people. Let us be remembered as that generation. Let us seize these times.

Still waiting.

Alert: The Crises Is Real….

I apologize to all. i too was lulled by press reports that led me to think we could coast two months without resolving the fiscal cliff. I just read data otherwise. I did not know that the debt ceiling fell on December 31. I have been lulled into thinking it wasn’t until February that it became due.

That is because the press assumed that since we got through two months of stopgaps last time, we can do it again.

There is the possibility that we can. But what scares me are the scenarios which portend we will not.

The debt ceiling crises is like a cancer. The United States of America is the patient. We know that at some point the cancer will be so advanced it will be untreatable; after which it will become too pervasive and it will win. We could walk into the cancer center right now, and say “let’s get this started”, and know that we will come out ok. Although we don’t know for sure, the predictions are that our point of no return is at the end of February. If we are wrong, and the cancer unbeknownst to us is too rampant, it will win.

Our huge problem is that we need a consensus to get ourselves into the cancer treatment center. And one party whose vote is required, will not vote yes, because they believe only in medicine proscribed by witch doctors. They will not consider to committing the patient for medical treatment, until a witch doctor has been brought in from deepest Africa to perform his rituals…. That one small contingent believes in mystical witchcraft so much, they refuse to allow medical treatment.

Of course when the line of death approaches and all others remain adamant that saving the country is more important than proving the existence of witchcraft, we assume they will give in….

The real question is whether or not we can get them to commit before it becomes too late….

If not, the Tea Party contingent of the Republican Party of the United States of America, will have signed our nations death warrant.

I know a lot of people raise hell over every crisis in order to promote their argument. I’m always the cool headed one. Simply put, we are now in a minefield because all markets are maxed out, because leverage is off the scale, because the treasury can’t help, so that if the markets were to fall because of the threat of a credit downgrade, there will be no bottom. The financial system as we know it, will be no more….

Today’s Tea Party in the House of Representatives is the metaphorical equivalent of putting 4th Graders in control of our nuclear arsenal… There is still a good possibility that they will act rationally and all will go ok; nothing catastrophic will happen.. But should they not, the results will not be a little minor blip….

Republicans Surrender Economic War: Concede Defeat

Anyone who has read this blog over time, knows I’m all about the numbers. If it comes down to what people say, versus numbers, I’ll always take numbers and I’ll always be right. Of course sometimes you have to probe the numbers of the other side, to be sure the other side didn’t (erroneously) switch a minus sign, or divide when they should have added, but if anyone were to analyze past writings of mine, they could only concur, that numbers speak volumes…

In the Bush years I called out that the numbers weren’t matching up; we were headed for a gigantic meltdown and we did. I called for all (who listened and got out in time) to get back into the stock market at 6600 because it would reach bottom the next day and bounce upward, and it did. I called out that our economic well being was based upon removing the upper tax cuts, keeping the lower ones, and we instead, we got the Tea Party because some nuts out there still don’t read this blog.

So, as everyone knows, if given enough time, and pointed in the right direction, a person with one leg can hop towards and eventually reach the finish line. Basically the set back caused by the Tea Party Republicans, has caused us to have to complete the second half of the Obama years, on one leg….

Now, we are seeing Progress that will continue, unless the Tea Party is able to knock out our other leg….. The Romney/Ryan budget does exactly that on a macro scale. (One would expect that from someone who grew up in a little town and has never learned there are other ways to do things.)..

One of the most credible sources out there these days, is the Federal Reserve of St. Louis. Consisting almost entirely of Republicans, when they say things are going well, I will tend to believe them. And they are excited by the latest returns. I borrowed these from the Business Insider, but just seeing them in sequential order, is like art, a beautiful thing for a numbers person to behold…..

Yes, to change the lyrics off a CCR song, ” I see a GOOD moon a’rising….” The only thing that can derail this economy off its tracks, is any major Republican victory in November… Barring that, we are on our way…..
Obama and the Democrats did pull us out of the worst Recession (it would have continued as a Depression if Republicans had been in power) since the Great Depression…..

Trust the numbers: only with continued Democratic leadership, will the money keep coming back…..

If Wishes Were Fishes….

If wishes were fishes…

I’d go catch me one…..

 

What would I wish for?  A great economy. That would take care of so many problems.

The issue within the economy that gets the most attention, is jobs.  Not enough people are working. And the reason not enough people are working is because not enough money is getting spent, to add on additional help.

What we need is to get more money spent, and then add on extra people to assist with that increase of business.  So, how do we do that?

 Here are the old tried and true was trotted out long ago.

1) The government can hire. Those people spend money into the economy.

2) The government can award contracts.  Those people now working, spend money into the economy.

3) The government can dole out more tax cuts.  If people get more in their pocket they will spend more.

We’ve tried that, but the amount the government needs to spend to cover the salaries of 16 million people, would be (at $50,000 each per year)  would be $800 billion.  (Does TARP come to mind?)  That is just a too big job for government to handle by itself…

Who on earth has $800 billion.  Are we doomed?

No, corporate America makes almost $2 trillion of profits per quarter. By now all of you should know that is every 65 working days.  

 

So who do YOU think should be hiring all these unemployed workers?  The government that is in debt ($16 trillion) up to its eyeballs, or…. corporate America that after all expenses, has a new $2 trillion every 65 days to play with? 

I hope you said Corporate America.  We now know the cost: $800 billion/year. We now know the profit: just under $8 trillion per year (four quarters). 

So the cost to Corporate America of putting all these unemployed back to work, is in percent: 10%. So instead of making a full dollar in profit, Corporate America makes 90 cents on the dollar.

If that seems like a lot, keep in mind we are not discussing an expense here.  That is not a 10 % cost incurred that the business has to scramble and find some method to compensate. Historically profits are not this high. In fact, they never have been this high in the history of the United States, at least according to the records kept today of long ago.  So these very high profits are a new phenomena… They are probably occurring because business just aren’t hiring; 

Remember: profit is what is left over after everything has been paid off.  So having businesses take ten percent of their “profits” and put people to work, doesn’t cost them anything. They just don’t record dream level profits anymore.  Instead, they just have healthy profit levels..

So let us review.  We have 16 million unemployed and out of work, who for just $800 billion could be working at $50,000 a year.  That would give us zero unemployment. And we have Corporate America making $8 trillion a year earning profit that is so much, they have no idea or way to spend it.  

So, all we have to do is make, force, impose, compel Corporate America hire 16 million people. 

But wait.  Wasn’t everyone up in arms over forcing, imposing, and compelling Corporate America to pay for health insurance?  Saying things like the government “can’t make anyone do anything?”  Didn’t a whole bunch of patriots emerge from the woodwork with that philosophy in mind?

Justice Roberts opened the door.  And he showed Congress the way.  Raise taxes on Corporate America; its legal; Congress can raise taxes. . Raise taxes and take their money… But, if you want to be sporting, you can allow them to not record profits as high as they have.  You could also allow them to write off the amounts they invested in building new plants, establishing budgets for R & D.  Hey, they could even pay you more.  Better to have you a happy camper than give that money to the IRS…..

So you see, if we just raise taxes, the economy takes off.  And raising taxes is really just a trick with words.  All we are really going to do is raise the tax rates.  The amount of taxes a corporation actually pays will stay the same or maybe be less, because their profit (by their choice) will go down and so though they will be asked to pay a higher rate, it will be on far less “income”.  And where does that money go?  If they act in their own selfish interests and choose to invest the money in themselves so they don’t have to fork it over to the FED’s, .. all that money goes to new jobs.  16 million of them.

The solution is plain as the words on this page.  Raise the tax rates, watch corporations reinvest in themselves here in America, watch the hiring begin en masse, and watch the economy get roaring again.

It is nothing new;  it is the way it always was, up until the Bush Tax Cuts were passed.  How many of you remember old Delaware, where around the middle of December, Dupont’s tax division presented the data to the chairman, “this is what you gotta spend”; and building contracts came flying out of 1007 N. Market Street.

We should have never stopped the gravy train, but we did.  It’s time we return to reality and raise those Federal Tax rates.  It wouldn’t hurt to remove every Republican from office while we are at it………

I think I just caught me a wish…….  

 

 

 

 

 

The Economy IS Better Than You Think……..

Here are the charts to prove it…..

Private employers have added 3.7 million jobs over the last 23 months. Businesses are ratcheting up investments and boosting productivity. Exports, from agriculture to manufacturing, are growing. Meanwhile, the cost of the government’s emergency response to the financial crisis is dramatically lower than anyone expected, which is welcome news for taxpayers.

All one can say after viewing these charts, is thank heavens the American People, wisely chose Obama over the Republican John McCain….

And as a trivia point…. see if you can spot the “Tea Party Dip” in the recovery…

Proof again that Republican Policies for whatever reason, … simply do… not…. work….at…. all…..

Lolly, Lolly, Lolly, Get Your Tax Breaks Here…..

Can you guess which company had the lowest tax percentage?

If you guessed Pepco Holdings, which own Delmarva Power, you guessed correctly… They paid a tax rate of -57.6% over a three year period. Pepco, the electricity utility that serves Washington, D.C. Pepco reported profits of $882 million in 2010, and negative taxes of $508 million — earning that negative tax rate of -57.6 percent.

That means unemployment, education, vital construction, and jobs, all got cut, to swell Pepco’s profits 57.6% higher than they would have been naturally.

In 2010, Verizon reported an annual profit of nearly $12 billion. The statutory federal corporate income tax rate is 35 percent, so theoretically, Verizon should have owed the IRS around $4.2 billlion. Instead, according to figures compiled by the Center for Tax Justice, the company actually boasted a negative tax liability of $703 million. Verizon ended up making even more money after it calculated its taxes.

That means unemployment, education, vital construction, and jobs, all got cut, to swell Verizon’s profits $703 million higher than they would have been naturally. (They then turned around and cut their workers pay and benefits, creating the strike that occurred during September).

Perhaps most famously, General Electric raked in $10.5 billion in profit in 2010, yet ended up reporting $4.7 billion worth of negative taxes…..

That means unemployment, education, vital construction, and jobs, all got cut, to swell General Electrics profits $4.7 billion higher than they would have been naturally.

Here is Eric Cantor’s Republican philosophy in a nutshell. And since he is Republican you might as well get back at him by blaming every Republican you see.. for it.

Americans must pay more themselves. More for insurance, more for pensions, more for health care, more for gas, more for electricity, more for water, more for state taxes, more for local taxes. They must do that while earning less. What used to come out of the $6.2 billion in corporate profits, is now coming out of the consumer.

This is EIC for billionaires. It is as if we said,.. we feel you didn’t make enough so we are giving you back money from those Americans who do pay taxes, so you can live within your means…..

This is why there are Occupy Demonstrations by hard working Americans in almost every city, county, and state across this union….

All America needs is to increase the taxes on the 1%…
That is all it will take to turn this nation into the America we’ve always dreamed of…

How To Grow Jobs….

Raise top marginal rate to 40%.

Remove all existing tax credits for corporations. Keep current corporate rate at 35%….

Hire 35,000 additional accountants for the IRS….. Just do it.$35,000,000,000.

Allow dollar for dollar, a one time tax credit over these next two years, for every dollar spent on new construction here within the boundaries of the United States. A small business making $60 million this year, .. times the corporate rate of 35% stands to pay $21 million in corporate Federal Income tax. But with the “kavips deduction”, it instead decides to build 4 new locations with a start up cost of $5 million each…. and pay NO FEDERAL TAXES that year.

Those four new locations, each pump $5 million into their respective economies, which as it changes hands, gets taxed over and over and over again. If each unit has sales over $2 million, at a 30% payroll cost, they over the course of a year, pump an additional $660,000 into each local economy… As that $660,000 changes hands, it gets taxed over and over and over again as well….

So what do we have?

Whereas we had no investment under Republican Tax plans, (all that free money was going to Chinese investment since they worked for $1 a day), now under the kavipsian tax plan, we have in the first year, $21 million invested domestically, and a combined $2.6 million each year in brand new jobs, flowing out through the economy……

That $2.6 million if all in one state with a top rate of 5%, puts $131,000 into the state treasury that was not already there. At 2.5%, it puts $65,000 back into local government…..

If the corporation choses to do the same for a second year… then, those amounts get doubled!

Now, here’s the beauty of the kavipsian tax plan…. Imagine, every business, corporate or private, doing this exact same scenario simultaneously…

Ironically, by raising the rate on the amount of taxes we take from the wealthy and/or corporations, but allow them to deduct dollar for dollar what they spend that year on physical capital (something that gets built) we force businesses to choose between giving the Federal Government more of their money…. or keeping it themselves.

We all benefit when they keep it .. themselves…

But Where’s The Money Going to Come From?

In April, May, and June, corporate America accumulated 1.7 Trillion in just corporate profits.

All that money could simply disappear, and it would have no effect on the day to day running of the economy. Loss of corporate profit? Job levels stay the same. Loss of corporate profit? Banks still solvent. Loss of corporate profit? Income levels don’t change…

Corporate profit is just another name for money left over after all expenses have been fufilled…

It’s extra, it sits on the outside of the economy, it is meaningless..

Let’s put that money into jobs, into business loans, into raising income levels… all which do have a benefit to the economy…

Then, once the economy is roaring, and everyone is again working, is spending freely, has more money than they can possibly use, then profits will be going through the roof…

When a business fails, the usual trend is for it not to pay it’s bills, accumulate and pocket all incoming cash it can, and then say… “Oops, sorry. We’re bankrupt….”

Allowing obscene profit during this economic depression is just as equally insane (except of course for those thieves legally skimming off the top before the upcoming inevitable collapse.)

The Simple Solution……..

“But the big dilemma is how to deal with national debt. If governments spend more, they increase the debt. If they cut back, they slow the economy further. “I don’t know how it’s all going to end,” says Ron Simpson, managing director of global currency analysis for Action Economics..

The answer is rather obvious. You take it from those who have it… Long before modern civilization, that used to be the king and you took it from him by force; then, it evolved to the wealthy class and you busted monopolies,, then to the top echelon and you taxed, and now, it is appropriately named “the top 1%….”

You TAKE it from THEM……. Over the evolution of man and society, we have learned that it is a lot more effective to use benign forms of taxation, giving them options on how they wish to pay back, than storming the castle and killing all inside… and then looking around at each other, and saying …. “ok, so now what?”

Simply raise taxes on all profit until the debt crises has abated. But, be sure to give ample tax breaks, to the point that taxes can be completely written off, on every penny that is invested into physical capital in that country under question… That includes the United States…..

Move away from income tax… and more to profit tax… Which is essentially what the United States Income Tax System has now become.. and probably must now stay…

Instead of how much do you earn: we’ll tax that… our mantra is how much do you have after a minimum level of expenses have been surpassed.

Here in America it takes $56,000 for a family to live comfortably and have a 10% buffer. That is about where our income tax begins to take money and put it into the Treasury.

We’ve even evolved to where if you are a functioning adult, making a contribution to society and are under a poverty minimum, we will pay you money for your contribution.. (EIC)

This philosophy seems to work well.

WE, the People, just need to insist that it also applies to corporations and the top 1% as well…

Hell, during war we do it all the time… Hello, Mr/Mrs. We’re under attack. WE need to borrow your son/daughter for a while, maybe forever…

So why not: Hello, Mr/Mrs. 1 Percenter. We’re in a financial crises. WE need to borrow your excess profit for a while… just one year or two… Benefit to you, is that you will be twice as big and ready to double your income, as soon as that profit ban is lifted……..