It is a real possibility that Mitt Romney will be our next President. While I will not be happy about that, I take solace from the likelihood that my P.A. will be worth more if that happens.
However, Mitt's adventures abroad leave me wondering if he has any idea about how to conduct foreign policy. It is a big world and we need the cooperation of our allies. We cannot afford to be the policeman of the world with more tax cuts and the inevitable recession that will be created by cutting government spending as fast as the GOP wants to.
Yet, Mr. Romney continues to advocate bombing Iran, keeping the Palestinians stateless and through that latter policy, creating soldiers for terrorism. In addition, showing his corporate mentality of the boss is the decider, he has thrown out statements insulting the British, the Mexicans and who knows who else over the past 4 days.
I have no idea what President Romney will stand for and that scares me.
Tuesday, July 31, 2012
Sunday, July 29, 2012
Kaching, RedStateVT has a point
Reading the Economist today, they have a lead about how Israel needs to get the Haredim, ultra-orthodox Jews who are non-working Jewish scholars, into the mainstream of working, performing military service, and paying taxes. In s to lessening the budget burden of supporting the Haredim with welfare payments, it would also perhaps balance their militancy.
The Haredim are very anti-Palestinian and the primary dwellers in the West Bank Settlements that are an obstacle to peace. They neither pay for their military protection nor serve in the military. Yet, they are the primary obstacle to a land/border deal with the Palestinians. If they paid taxes and risked their life in military service, they would be more realistic.
RedStateVT has bemoaned the fact that many in the U.S. who do not make much money ( I think you have to make more than $40,000 before you pay any effective income tax) because they will not support tax reform. He has a point, but the working poor do pay social security tax, medicare tax, state income tax sometimes, utility, gas and sales taxes. They also pay property taxes if they own a home. So the working poor do pay a lot of taxes relative to their income. All those that I listed add up to between 15% and 25% of income depending on your state and home ownership status.
The problem in the U.S. is that none of those taxes, with the exception of state income tax and property tax, are that obvious to the payer.
And despite RedStateVT's belief that, if these people pay another 5% of their income in income taxes, they would vote for GOP to reduce their tax rate, I believe they would still vote for the Democrats who believe in the government services that help people who make too little to save anything and every working person should be saving something.
The issue in the U.S. tax system is fairness. If I am successful in my new job, I will pay 15% like Mitt Romney because my income will be from "carried interest". That is the law, but I am not doing anything differently than I did in my last job when I paid 39% on my marginal income. That is not fair. There are literally 100's of tax rules that create unfairness. That is what needs to be fixed. And perhaps if everyone paid a little income tax, we would generate a reasonable discussion around this.
I fear, however, that until the GOP is willing to raise revenues to pay for to pay for 25% to 35% of the deficit reduction, we will not get the reasonable discussion that we need.
The Haredim are very anti-Palestinian and the primary dwellers in the West Bank Settlements that are an obstacle to peace. They neither pay for their military protection nor serve in the military. Yet, they are the primary obstacle to a land/border deal with the Palestinians. If they paid taxes and risked their life in military service, they would be more realistic.
RedStateVT has bemoaned the fact that many in the U.S. who do not make much money ( I think you have to make more than $40,000 before you pay any effective income tax) because they will not support tax reform. He has a point, but the working poor do pay social security tax, medicare tax, state income tax sometimes, utility, gas and sales taxes. They also pay property taxes if they own a home. So the working poor do pay a lot of taxes relative to their income. All those that I listed add up to between 15% and 25% of income depending on your state and home ownership status.
The problem in the U.S. is that none of those taxes, with the exception of state income tax and property tax, are that obvious to the payer.
And despite RedStateVT's belief that, if these people pay another 5% of their income in income taxes, they would vote for GOP to reduce their tax rate, I believe they would still vote for the Democrats who believe in the government services that help people who make too little to save anything and every working person should be saving something.
The issue in the U.S. tax system is fairness. If I am successful in my new job, I will pay 15% like Mitt Romney because my income will be from "carried interest". That is the law, but I am not doing anything differently than I did in my last job when I paid 39% on my marginal income. That is not fair. There are literally 100's of tax rules that create unfairness. That is what needs to be fixed. And perhaps if everyone paid a little income tax, we would generate a reasonable discussion around this.
I fear, however, that until the GOP is willing to raise revenues to pay for to pay for 25% to 35% of the deficit reduction, we will not get the reasonable discussion that we need.
Why are so many GOP supporter's closed minded?
I had an interesting electronic interchange with someone this week that left me wondering about the headline question.
I commented on a Washington Post article about how foreign countries generate a better health care outcome for their population overall while spending less.
Link to Story
My comment not surprising was that Republicans would never support the Singapore program of mandatory savings on the part of every worker equal to 36% of annual income to go into a personal savings account to pay for their own retiree income and health care expense because (i) it is mandatory and (ii) you would have to raise taxes to pay for the transition. Singapore started with that program and had no transition to finance.
That generated the comment from someone.
"well why haven't you been saving 36% of your income to pay for your expenses?
do you need the government to order you to be responsible? "
Why does this person assume that I have not been saving? Why do they assume that because I support policies that deal with reality that I am a sponge on the government? It can only be because they are close minded.
For the record, I have always tried to save between 20% & 25% of my income not including Social Security and medicare contributions. I also have purchased a Long Term Care Policy so that neither my wife nor I will end up on Medicaid because of dementia. I wonder if that critic has been so prudent, but alas I will never know because of the anonymity of internet commentary.
But what allowed me to do that was an income level that placed me in the top 5% for over 20 years and a personal desire to have savings in retirement so that we could enjoy a certain life style. Unfortunate early retirement has reduced that future life style but we will be able to sustain ourselves.
However, I have earned a social security benefit and access to a group insurance plan like Medicare because I have paid into that insurance system for over 30 years. It is part of my retirement plan and if a contract with the government is not honored, then the political system is morally bankrupt and will not be respected by the people. That does not mean the government cannot change the benefit to maintain a sound fiscal condition, but the basic rules cannot be changed.
However, I digress from my main point. The critic assumed that because I support the individual mandate and other forms of group insurance for individuals, I am somehow irresponsible. I know RedStateVT does not think I am irresponsible, so why would anyone assume blindly that people with an opposing view are irresponsible. How can such people expect to convince me that they are correct, when they make false assumptions about me?
I believe every human being deserves respect for what they are and access to certain basic things. The government must provide some of these, but while doing so, encourage people to become self-supporting. While that works for people before retirement age, it does not work after retirement age. After retirement, government can fiddle with the benefit, but not change the system.
Debate that with me, not whether I have become a sponge on the government.
I commented on a Washington Post article about how foreign countries generate a better health care outcome for their population overall while spending less.
Link to Story
My comment not surprising was that Republicans would never support the Singapore program of mandatory savings on the part of every worker equal to 36% of annual income to go into a personal savings account to pay for their own retiree income and health care expense because (i) it is mandatory and (ii) you would have to raise taxes to pay for the transition. Singapore started with that program and had no transition to finance.
That generated the comment from someone.
"well why haven't you been saving 36% of your income to pay for your expenses?
do you need the government to order you to be responsible? "
Why does this person assume that I have not been saving? Why do they assume that because I support policies that deal with reality that I am a sponge on the government? It can only be because they are close minded.
For the record, I have always tried to save between 20% & 25% of my income not including Social Security and medicare contributions. I also have purchased a Long Term Care Policy so that neither my wife nor I will end up on Medicaid because of dementia. I wonder if that critic has been so prudent, but alas I will never know because of the anonymity of internet commentary.
But what allowed me to do that was an income level that placed me in the top 5% for over 20 years and a personal desire to have savings in retirement so that we could enjoy a certain life style. Unfortunate early retirement has reduced that future life style but we will be able to sustain ourselves.
However, I have earned a social security benefit and access to a group insurance plan like Medicare because I have paid into that insurance system for over 30 years. It is part of my retirement plan and if a contract with the government is not honored, then the political system is morally bankrupt and will not be respected by the people. That does not mean the government cannot change the benefit to maintain a sound fiscal condition, but the basic rules cannot be changed.
However, I digress from my main point. The critic assumed that because I support the individual mandate and other forms of group insurance for individuals, I am somehow irresponsible. I know RedStateVT does not think I am irresponsible, so why would anyone assume blindly that people with an opposing view are irresponsible. How can such people expect to convince me that they are correct, when they make false assumptions about me?
I believe every human being deserves respect for what they are and access to certain basic things. The government must provide some of these, but while doing so, encourage people to become self-supporting. While that works for people before retirement age, it does not work after retirement age. After retirement, government can fiddle with the benefit, but not change the system.
Debate that with me, not whether I have become a sponge on the government.
Friday, July 20, 2012
No Surprise, Everyone Fears the NRA
Despite the Batman Movie Theater tragedy, neither Presidential candidate dared state the obvious.
So I will say it.
What appears to be a mass killing with an automatic weapon would be less tragic if such automatic weapons were outlawed as unnecessary for hunting and self-defense. Police would be safer and children would be safer, and hunters and self-defenders would be no worse off.
So I will say it.
What appears to be a mass killing with an automatic weapon would be less tragic if such automatic weapons were outlawed as unnecessary for hunting and self-defense. Police would be safer and children would be safer, and hunters and self-defenders would be no worse off.
Wednesday, July 18, 2012
LIBOR Scandal is a Difficult Civil Suit to Value
This does not mean that shareholders will not suffer, but it does offer some hope that money outflows will be contained; which is why I bought a little more JPM.
For all the complaining going on about this, the fact remains that LIBOR is an average of some number of banks which is determined by throwing out the 4 lowest and 4 highest submissions. Who knows where any one bank's submission stood in that process on any given day?
Then, who was damaged by this? Municipalities are complaining that they paid too much in interest because of these submissions, but if LIBOR was set too low by the erroneous submissions, then they paid less than they should have. The same goes for any borrower who paid a LIBOR based rate on their debt. Investors in floating rate notes might have been damaged but to prove damages they will have to know which banks submissions were too low, what days they specifically contributed to the actual setting of LIBOR, and then match those days to the exact days that the coupons were set on their security. And they will have to produce proof that they owned these securities for specific time periods.
Derivative holders will be in mix, but most derivatives holders have a mix of long and short positions. Again finding out the exact value of damage will exceedingly tedious and time consuming and may well prove to not be worth the effort.
It is clear that when a systemic crisis hits the banking system, the flaws in the LIBOR setting mechanism become apparent. But the original purpose of LIBOR was to make sure that loan pricing covered the banks' funding costs. Submitting too low a funding cost actually harmed the banks that did so because they were understating their exact cost. The banks were harmed. And it is not clear what legal obligation there is between the banks' LIBOR process and the securities/derivatives where harm may have been caused because LIBOR is simply used a reference rate. Only the Judicial System can determine if that creates a legal obligation.
I wish the authorities well in creating a more transparent reference rate, but I wonder how they will do so and not create another method for manipulation.
For all the complaining going on about this, the fact remains that LIBOR is an average of some number of banks which is determined by throwing out the 4 lowest and 4 highest submissions. Who knows where any one bank's submission stood in that process on any given day?
Then, who was damaged by this? Municipalities are complaining that they paid too much in interest because of these submissions, but if LIBOR was set too low by the erroneous submissions, then they paid less than they should have. The same goes for any borrower who paid a LIBOR based rate on their debt. Investors in floating rate notes might have been damaged but to prove damages they will have to know which banks submissions were too low, what days they specifically contributed to the actual setting of LIBOR, and then match those days to the exact days that the coupons were set on their security. And they will have to produce proof that they owned these securities for specific time periods.
Derivative holders will be in mix, but most derivatives holders have a mix of long and short positions. Again finding out the exact value of damage will exceedingly tedious and time consuming and may well prove to not be worth the effort.
It is clear that when a systemic crisis hits the banking system, the flaws in the LIBOR setting mechanism become apparent. But the original purpose of LIBOR was to make sure that loan pricing covered the banks' funding costs. Submitting too low a funding cost actually harmed the banks that did so because they were understating their exact cost. The banks were harmed. And it is not clear what legal obligation there is between the banks' LIBOR process and the securities/derivatives where harm may have been caused because LIBOR is simply used a reference rate. Only the Judicial System can determine if that creates a legal obligation.
I wish the authorities well in creating a more transparent reference rate, but I wonder how they will do so and not create another method for manipulation.
Saturday, July 14, 2012
What the !@#$%^&*() is going on?
I was going to submit this to the American Banker blog that I write but things get edited well there and I wasn't sure they'd want to publish this.
We bank shareholders are getting hosed by management. As if it were not enough to have suffered through the disastrous results from the lack of management control over mortgages, now we are dealing with inaccurate LIBOR submissions (Barclays and who knows who else), inadequate control over money laundering (HSBC), manipulated risk management systems and letting someone named "The Whale" work at the firm (JPM), and at least one other headline yesterday that had something to do with something else the shareholders will pay for.
Where are the management teams of these institutions and what are they doing to preserve shareholder value? All I see them doing is destroying my wealth.
We bank shareholders are getting hosed by management. As if it were not enough to have suffered through the disastrous results from the lack of management control over mortgages, now we are dealing with inaccurate LIBOR submissions (Barclays and who knows who else), inadequate control over money laundering (HSBC), manipulated risk management systems and letting someone named "The Whale" work at the firm (JPM), and at least one other headline yesterday that had something to do with something else the shareholders will pay for.
Where are the management teams of these institutions and what are they doing to preserve shareholder value? All I see them doing is destroying my wealth.
Wednesday, July 11, 2012
This Puts Health Care in Scale
Then remind Mitt Romney that the ranks of the uninsured today are equal to the combined populations of Oklahoma, Connecticut, Iowa, Mississippi, Kansas, Kentucky, Arkansas, Utah, Oregon, Nevada, New Mexico, West Virginia, Nebraska, Idaho, Maine, New Hampshire, Hawaii, Rhode Island, Montana, Delaware, North Dakota, South Dakota, Alaska, Vermont and Wyoming.
GOP to Uninsured: Drop Dead
GOP to Uninsured: Drop Dead
Friday, July 6, 2012
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